emeGen reported 9M23 revenue of Rmb769m (+35% YoY) and net losses of Rm1.03bn, with revenue of Rmb347m (+58% YoY) and net losses of Rmb327m in 3Q23, in line with our expectation. The company's revenue growth is mainly driven by the sales ramp up of RC18 (telitacicept) and RC48 (disitamab vedotin).
Its R&D expenses reached Rmb858m (+30% YoY) and its selling expenses reached Rmb540m (+94% YoY) in 9M23. As the end of September 2023, the company has cash of c.Rmb800m on hand. We maintain our EPS forecast of -Rmb2.11 in 23E, -Rmb0.79 in 24E, and Rmb0.30 in 25E. We maintain our target price of HK$59. With 37% upside, we maintain our BUY rating.
Sales ramp up with multiple pivotal trials of RC18 in China. Now, the company has established a sales team of over 700 people for RC18, covering over 2,300 hospitals and over 23,000 doctors. RemeGen has submitted the NDA of RC18 for the treatment of RA to the CDE in this August. In addition, RC18's full clinical data for RA will be published at 2023 ACR Meeting. In addition, RC18 is now under multiple phase III clinical trials and completed the FPI in 2Q23 in China, including MG, pSS and IgAN. In terms of the development of RC18 in overseas market, it is now under a global multi-center phase III study for SLE in the US. In addition, as for the treatment of MG, the company has obtained the orphan drug and fast-track designations in the US and the phase III clinical trial has been initiated. Meanwhile, RC18 has received the FDA's consensus for phase III study for IgAN and pSS in the US.
Global trials of RC48 ongoing. As of 9M23, its oncology sales team has c.600 team members, covering over 2,000 hospitals and over 24,000 doctors. In terms of development of RC48 in China, as for UC, the company is carrying out earlier line treatments including first line, neoadjuvant and NMIBC, etc. Now, RC48's combo with PD-1 for 1L UC is under phase III clinical trial with patient enrollment ongoing. In addition, the company has completed patient enrollment of the phase II study of RC48's combo with PD-1 for MIBC. As for the GC, the company has obtained the IND approval from the NMPA for RC48's combo with PD-1 and Herceptin for 1L HER2-expressing GC. In addition, the company has submitted the IND application to the NMPA for RC48's combo with Akeso's cadonilimab for 2L GC. As for the BC, the company will focus on earlier line treatment and HER2-low expressing trails. RC48 is now under three phase II clinical trials for neoadjuvant HER2 expressing BC in China. In addition, as for the RC48's global development, RC48 is under phase III trial of RC48's combo with Keytruda for 1L UC and pivotal study of RC48's monotherapy for 2L UC.
Updates of other pipeline products. RC88 (mesothelin ADC) is under phase II trial for gynecological tumors in China. RC118 (Claudin18.2 ADC) has completed the phase I dosage escalation study for monotherapy. In addition, RC28 (VEGF/FGF) is now under phase III clinical trials for treatment of wAMD and DME in China while DR is under phase II clinical trial.
Maintain BUY. We maintain our EPS forecast of -Rmb2.11 in 23E, -Rmb0.79 in 24E, and Rmb0.30 in 25E.
We maintain our target price of HK$59. With 37% upside, we maintain our BUY rating.
Risks: R&D failure of key pipeline; rising competitions of key pipeline; lower-than-expected sales ramp-up of key products after being included into the NRDL.