Event: The company released its three-quarter report for 2023, achieving operating income of 2.38 billion yuan (+13.7%), net profit attributable to shareholders of the parent company of 200 million yuan (+94.8%), and net profit attributable to shareholders of listed companies deducting non-recurring profits and losses of 140 million yuan (+77.8%).
Q3 Performance exceeded expectations, and cypropofol continued to be released rapidly. The third quarter achieved operating income of 1.01 billion yuan (+19.4%), net profit attributable to shareholders of parent companies of 130 million yuan (+278.2%), and net profit attributable to shareholders of listed companies after deducting non-recurring profit and loss of 0.7 billion yuan (+159.5%). Cyclopofol reached a record high of 900,000 sticks in June, and Q3 maintained rapid growth. The first US phase III clinical trial for anesthetic-induced indications of cypofol injection has reached the main end point, and the second phase III clinical trial is ongoing. The third phase III clinical trial is expected to be carried out simultaneously in the US and Europe this year, and it is expected that external cooperation/authorization will be possible in 2024.
The HSK21542 (KOR selective agonist) NDA was accepted. Clinical results show that the HSK21542 injection has good safety and tolerability, and there are no morphine-like adverse effects such as respiratory depression, dizziness, and constipation. Compared with tramadol hydrochloride injections, it can significantly reduce the amount of antiemetic drugs used after surgery; compared with placebo, the analgesic effect is good, the effect is fast, and the duration of analgesia can be reduced, which can reduce the amount and proportion of analgesics used after surgery, and the satisfaction of subjects and researchers is high. The accepted indication this time is analgesia after abdominal surgery. This product is the first peripheral kappa opioid receptor agonist in the world to submit a marketing application for post-operative analgesia indications. At the same time, phase III clinical trials are being carried out for itching indications associated with chronic kidney disease, and phase I clinical trials for oral preparations are also being carried out.
Innovative drugs have gradually entered the harvest period, and commercial cooperation has filled the product pipeline. The company's R&D investment continued to increase. In the first three quarters of 2023, R&D expenses reached 370 million yuan (+7.3%), and R&D investment accounted for 27.2% of revenue. As of 2023H1, the company's nine Class 1 innovative pharmaceutical products have entered the clinical stage. Long-acting hypoglycemic drugs (HSK7653) were declared for NDA in January 2023. The HSK16149 diabetic peripheral neuralgia indication was declared for NDA in October 2022, and the marketing application for postherpetic neuralgia was also accepted in September 2023.
The NDA for post-operative analgesics (HSK21542) was accepted in October 2023. Domestic phase II clinical trials of respiratory drugs (HSK31858) and metabolic system drugs (HSK31679) are progressing smoothly.
The NDA application for riluzole oral film was submitted in May 2023.
Profit forecast and investment suggestions: The company's innovative drugs have entered the harvest period, and several indications of cypofol have been approved for listing, which is expected to contribute to greater performance elasticity. At the same time, the company has abundant reserves of innovative varieties, and sufficient momentum for long-term performance growth.
The company's net profit from 2023-2025 is estimated to be 3.1 million yuan, 4.2 million yuan and 560 million yuan, corresponding to PE 90 times, 66 times and 49 times, respectively, maintaining the “buy” rating.
Risk warning: market competition risk, drug price decline risk, new drug development risk.