Key points of investment
Trepril was approved in the US, and sales inflection points are gradually emerging. We are optimistic about the inflection point of accelerated dosage driven by major indications of treprilizumab, revenue elasticity under commercialization of multiple product portfolios, and inflection points in performance growth brought about by international breakthroughs such as PD-1.
Performance: Commercial products are growing rapidly, triplex sales are steady in 2023Q1-Q3, achieving revenue of 986 million yuan (YOY -19.04%) and net profit of 1.407 billion yuan. The first three quarters achieved a total commercial drug sales revenue of about 892 million yuan (YOY 67.8%), of which triplizumab revenue was about 668 million yuan (YOY 29.7%), VV116 revenue was about 124 million yuan, and adalimumab revenue was about 99 million yuan. It is calculated that in 2023Q3, treprilizumab achieved revenue of about 221 million yuan (YOY about 1.4%), and achieved a good absolute sales volume even under the perturbation of pharmaceutical policies.
R&D progress: Trepril has been approved for listing by the FDA, many domestic NDAs continue to promote NDAs for PD-1 indications, and BTLA monoclonal antibody phase III MRCT is about to be launched. 2023Q3 treprilizumab for a new indication for first-line treatment of advanced renal cell cancer and first-line treatment for extensive small-cell lung cancer was accepted by the NMPA, and the first-line clinical study of first-line melanoma treatment for melanoma reached the main research end; the company's first anti-tumor anti-BTLA monoclonal antibody in the clinical development stage (first-in-human), cemtifalimab combined with treprilizumab as a randomized, double-blind, and placebo control for patients with limited stage small cell lung cancer that did not progress after chemotherapy The international multi-center phase III clinical study has been approved by the FDA and NMPA; clinical trials of anti-PD-1 and VEGF bispecific antibodies (code: JS207) have completed the administration of the first case of subjects.
Trepril has been approved by the FDA, and we are optimistic about continued breakthroughs in internationalization. October 29, 2023 Company Announcement: Treprilizumab (US trade name: LOQTORZI?) Combined with cisplatin/gemcitabine, as the first-line treatment for adult patients with metastatic or recurrent locally advanced nasopharyngeal cancer, and for adult patients with recurrent, unresectable, or metastatic nasopharyngeal cancer that has progressed during or after treatment with previous platinum-containing treatment, has been approved. Treprilizumab became the first and only drug approved for the treatment of nasopharyngeal cancer in the US. It is also the first innovative biopharmaceutical independently developed and produced in China with FDA approval. We are optimistic about the company's continued breakthroughs in internationalization and the revenue and profit elasticity brought to Triplet in overseas markets.
Profit forecasting and valuation
We adjusted the company's VV116 sales to take into account changes in global emergency drug demand. Also, considering the impact of domestic pharmaceutical regulatory policies on core product volumes, we lowered the company's revenue and profit forecasts for 2023-2025. Our model predicts that the company will continue to lose $14.15, 11.09, and $527 million in 2023-2025. We still emphasize optimism about accelerated dosage inflection points driven by major indications such as perioperative period of treprilizumab, revenue elasticity under commercialization of multiple product portfolios such as PCSK9 and IL-17 inhibitors, and performance growth inflection points brought about by international breakthroughs such as PD-1. We maintain our “buy” rating.
Risk warning
Risk of clinical failure, risk of competition, risk of product sales falling short of expectations, policy risk.