Is Junta Shibu, a leading enterprise for innovative macromolecule drugs going overseas? Junshi Biotech was founded in 2012, listed on the Hong Kong Stock Exchange in December 2018, and listed on the Science and Technology Innovation Board in July 2020. The company currently has 3 commercial products (Tuoyi, Junmaikang, and VV116), and two monoclonal antibodies have been approved for marketing by the FDA (JS016, treprilimab).
At this stage, the company has three major differences in expectations
There was a marginal improvement in both overseas and domestic revenue. 1) In overseas markets of PD-1, treprilizumab was approved for listing by the FDA. At Meinon, the orphan drug is priced high and commercialization is accelerated worldwide. The company can obtain stable cash flow through milestone revenue and sales sharing. 2) In the PD-1 domestic market, medical insurance indications have increased, approved indications have expanded, and Tuoyi is expected to expand further. 3) Increased revenue from other products: JS004 (BTLA), angoricizumab, junmaicam, and JS005 (IL-17A).
R&D and sales efficiency have improved, and losses have gradually narrowed. 1) Reduced clinical research and service fees, driving an overall reduction in R&D expenses and concentrating resources on key projects. 2) The efficiency of clinical execution has been greatly improved.
3) The execution and sales efficiency of the commercialization team is improved, and the sales expense ratio is reduced. 4) Non-return net profit for 2023Q3 was -388 million yuan, narrowing for the third consecutive quarter.
Many pipelines under development have FIC or Me-Better potential. 1) The FIC product JS004 (BTLA) combined with treprilizumab for LS-SCLC after chemoradiation therapy entered Ph3. The target patients in China were about 40,000/year. 2) JS105 (PI3Kα) targets Pik3cam breast cancer and endometrial cancer. The target patients in China are about 150,000/year. 3) JS107 (CLDN18.2 ADC) is undergoing two phase 1 clinical studies for pancreatic cancer and solid tumors. 4) The siRNA drug JS401 for mixed hyperlipidemia is the first small nucleic acid drug in China to enter clinical ANGPTL3.
The company's recent catalysts worth paying attention to are as follows
Treprilizumab: 1) Domestic: At the end of 2023, 3 new indications were added to health insurance; 2024H1, 4 SNdAs were approved by the NMPA; 2) Overseas: 2024Q2-Q3, ESCC, and NPC were approved by EMA and MHRA, and NPC were approved by Singapore and Australia. JS004 (BTLA): 1) 2023ASH, specific data on PD-1 drug-resistant Hodgkin lymphoma were read; 2) At the end of 2025, PD-1 resistant Hodgkin lymphoma submitted NDA. Angorrecimumab (PCSK9): 2024H1, approved by the NMPA.
Profit forecast: We forecast the company's operating income for 2023/24/25 to be 11.96/23.15/3,561 billion yuan, and net profit of -20.12/-11.69/-94 billion yuan. The DCF model and NPV model include Chinese revenue from 5 products (Tuoyi, Junmaikang, angoricizumab, JS004, and JS005), overseas revenue from JS004, and overseas licensing revenue from treprilizumab. The target market value is 56.359 billion yuan, and the corresponding stock price is 59.21 yuan. First coverage, giving a “buy” rating.
Risk warning
R&D falls short of expectations; health insurance negotiations fall short of expectations; risk of pharmaceutical industry policies exceeding expectations