Main points of investment
23Q3 revenue and net profit maintained double high growth. The company discloses the performance forecast for the first three quarters of 2023: the company expects to achieve operating income of 1.349 billion yuan (+ 160.52%, same increase, the same below) in the first three quarters of 2023, mainly due to the continuous volume of sales after the first-line indications of fumetinib are included in health insurance; the net profit of the mother is 398 million yuan (+ 636.61%), mainly due to the substantial increase in income and the gradual decrease of various cost rates benefiting from the scale effect. Deduct the non-return net profit of 366 million yuan (+ 1796.78%). From the perspective of Q3 alone, it is estimated that the operating income is 600 million yuan (+ 176.10%), the return net profit is 189 million yuan (+ 595.14%), and the non-return net profit is 182 million yuan (+ 1132.15%).
The expansion of the indication of vermetini has been promoted in an all-round way, benefiting a wide range of people. Fumetinib is not only used for late treatment and adjuvant therapy of EGFRT790M mutation and EGFR sensitive mutation NSCLC, but also actively develops the treatment of atypical mutation such as EGFR20 exon insertion and PACC rare mutation, as well as combined with other drugs to benefit a wide range of people. In terms of pipeline development, NSCLC adjuvant therapy for EGFR-sensitive mutations is in phase Ⅲ in China; the second-line treatment indication for EGFR 20 exon insertion mutation in NSCLC is progressing smoothly in China. The first-line treatment indication for EGFR 20 insertion mutation carried out jointly with ArriVent has been enrolled in many places, such as the United States, China, Japan and France. Indications for NSCLC first-line treatment of EGFRPACC mutation or EGFR L861Q mutation domestic phase Ⅲ clinical IND was approved in August 2023; phase Ib clinical phase IND for patients with advanced EGFR or HER2 mutation in cooperation with ArriVent was approved in April 2023, and has been approved for clinical use in many countries such as the United States, Spain, Australia and other countries. In addition, the clinical progress of combination with c-MET ADC RC108 and FAK small molecule inhibitor IN10018 is in the stage of Ⅰ b / Ⅱ in China.
The efficacy and safety of vermeinib in the adaptation of EGFR 20 exon insertion mutation are excellent. Data from Ib mid-term analysis of EGFR 20 exon insertion mutations were disclosed at the World Lung Cancer Congress (WCLC) in 2023. In terms of efficacy, the results of IRC showed that the confirmed ORR of the newly treated 240mg group, the 240mg group and the 160mg group were 78.6%, 46.2% and 38.5%, respectively, and the median DoR was 15.2 months, 13.1 months and 9.7 months, respectively. Fumetinib showed antitumor activity against EGFR 20 exon mutant subtypes in proximal ring, distal ring and helix regions. In terms of safety, vermetini was well tolerated, and the vast majority of treatment-related adverse events (TRAE) were grade 1-2. In the cohort of 240 mg, 240 mg and 160 mg, 0%, 4% and 4% of patients stopped treatment due to TRAE, respectively. The safety of 160mg and 240mg vermetini is the same as that of 80mg approved for market in China.
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 44-29-23. Maintain the "Buy-A" recommendation.
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.