Main points of investment
After 23H1 Vumetinib was included in health insurance, its revenue and net profit both increased. The company released its 2023 half-yearly report:
(1) 2023H1, the company achieved a revenue of 749 million yuan (+ 149.24%, the same increase, the same below), mainly due to the rapid release of the first-line indications of fumetinib into medical insurance; the net profit of returning to the mother was 208 million yuan (+ 678.69%), deducting the net profit of 184 million yuan (+ 3976.33%). In terms of expenses, the expenses of sales, management and R & D are 370 million yuan (+ 117.21%), 54 million yuan (+ 27.27%) and 113 million yuan (+ 27.26%) respectively, and the three major expense rates are 49.48% (- 7.30pp), 7.28% (- 6.97pp) and 15.12% (- 14.49pp) respectively. (2) 2023Q2, the company realized revenue of 472 million yuan (+ 149.52%), net profit of 174 million yuan (+ 251.02%), and non-return net profit of 164 million yuan (+ 292.75%).
The expansion of vermetini indications has been promoted efficiently, and new breakthroughs have been made in overseas clinical practice. Fumetinib, as the third generation EGFR-TKI,T790M mutation NSCLC second-line treatment indication developed by ourselves, was approved to market in March 2021, and the first-line treatment indication of EGFR-sensitive mutation NSCLC was approved to market in June 2022. At present, the two indications are included in the medical insurance. In terms of commercialization, the company's own marketing team has covered 30 provinces and cities, and more than 1000 hospitals in the core market region; at the same time, business partner Shanghai Fosun Pharmaceutical has covered more than 2000 hospitals. 2023H1 realized product sales revenue of 713 million yuan (+ 137.82%). In terms of indication expansion, EGFR-sensitive mutation NSCLC adjuvant therapy is in phase Ⅲ clinic, NSCLC second-line treatment indication for EGFR exon 20 insertion mutation is progressing smoothly, and NSCLC first-line treatment indication for EGFR PACC mutation or EGFR L861Q mutation has been approved for phase Ⅲ clinical IND in August 2023. In terms of overseas market development, the company reached an overseas authorized cooperation with ArriVent and efficiently launched the first overseas registered clinical study of vermetini.
At present, the first patient in the global Ⅲ phase registration clinic for the first-line treatment indication of EGFR 20 exon insertion mutation has been completed, and the company has made the first R & D milestone payment of 35 million yuan, making a new breakthrough in globalization exploration.
Self-research + the introduction of two-wheel drive, NSCLC field in the research pipeline differential layout. In terms of self-developed products, the company has laid out target drugs such as KRAS G12D, fourth-generation EGFR-TKI, RET and SOS1 around the field of NSCLC, which is currently in the stage of preclinical research. In terms of imported products, in March 2023, the company reached a licensing agreement with Hanyu Pharmaceutical to introduce a new generation of EGFR-TKI (ABK3376); ABK3376 can effectively inhibit the C797S mutation caused by the third generation of EGFR-TKI drug resistance, which is currently in the stage of preclinical development, and is expected to become a new generation of targeted therapy for precision treatment of NSCLC with EGFR-C797S drug resistance mutation.
Investment suggestion: after the first-line indications of vermetini are incorporated into health insurance, the volume of indications is expanded rapidly, and the expansion of indications is promoted efficiently; the layout of research pipelines in the field of NSCLC is rich. We predict that from 2023 to 2025, the company will achieve a net profit of 379 million yuan, 572 million pounds, an increase of 190%, 51%, and 28%. The corresponding PE is as much as that in 38-25-20. For the first time, give "Buy-A" advice.
Risk hints: industry policy change risk, new drug research and development risk, uncertainty risk of products under research, single product dependence risk, market competition risk and so on.