Maintain the “Overweight” rating. 2023Q1-3 achieved revenue of $769 million (+35.1%), net profit of $1,031 million (loss increased by $342 million year-on-year), and a balance of cash and cash equivalents of $546 million. 2023Q3 achieved revenue of 347 million yuan (+58.3%) in a single quarter, net profit of 327 million yuan (loss increased by 128 million yuan year-on-year), and 2023Q3 revenue slightly exceeded expectations. The increase in losses was mainly due to increased R&D investment and sales expenses. Maintain the main business revenue forecasts of 1,242, 20.32, and 3,035 billion yuan for the year 23, 24, and 25, and maintain an increase in holdings rating.
Under the tightening of the hospital environment, the number of commercial varieties is rapidly released, and it is expected that the equity incentive target will be achieved throughout the year.
Product revenue for each quarter of 2023 was 1.68, 2.43, and 347 million yuan respectively. Despite the tightening of the hospital environment, Q3 still achieved a 35.4% month-on-month increase, mainly due to increased sales of injectable tetacip and vidicetumab, which highlighted the immediate value of products with excellent clinical efficacy. As the hospital environment gradually eases, 23Q4 is expected to accelerate volume release and achieve the equity incentive target (revenue target for 2023 is 1.25 billion yuan).
Investment in R&D continues to increase, and many products are expected to usher in a harvest period. 2023Q1-3 has R&D expenses of 888 million yuan (+29.5%), and multiple pipelines are progressing smoothly. ① The Dosage Bridging Study Trial between Tetaxip Injection (Prefilled) and Tetaxip for Injection was approved by CDE and will provide patients with a more convenient way to administer medication. Tetaxept's new indication RA has been accepted by CDE and is expected to be approved for marketing in 2024H1.
Currently, indications such as SLE, IgA nephropathy, and MG of tetamexide at home and abroad are advancing at an accelerated pace, and improvements in the multi-indication layout and administration methods in the field of self-immunity are expected to accelerate product release. ② The company is actively developing treatment plans using ADC drugs in combination with immune checkpoint inhibitors. Currently, vidicetumab combined with PD-1/CTLA-4 dual antibody cardonilizumab has initiated phase II research on gastric cancer. Registered clinical trials of overseas vidicetumab monotherapy for 2L UC and K drug treatment for 1L UC have progressed smoothly, and domestic vidicetumab UC indications have moved forward with new adjuvant and 1L to the forefront. Furthermore, positive signals have been observed for MIBC and NMIBC indications, and the development of indications has blossomed more.
Catalysts: Product volume exceeds expectations; clinical data for innovative drugs under development exceeds expectations.
Risk warning: Product development falls short of expectations, sales volume falls short of expectations, and financing falls short of expectations.