The core insulin business is growing steadily, and the company expects a double-digit increase in overall revenue in 2024:3Q23's mainland insulin preparation sales revenue increased 8-9% year over year, and overall revenue increased by only 2% year on year, mainly because some businesses were affected by external factors in the industry and geographical conflicts in Europe. Second-generation insulin sales are growing steadily: the company's second-generation insulin sales market share is currently close to 45%, and the company expects single-digit sales growth in 2023. Continued release of third-generation insulin drives revenue growth: The company expects overall sales of third-generation insulin to increase 50% year-on-year in 2023, by product: 1) Glicin insulin sales in 2023 will increase by more than 30% year on year, and target 2024 year-on-year growth rate to exceed industry growth rate; 2) Mendon insulin sales volume will exceed 2 million units in 2023, doubling the 2024 target market share; 3) Target Gan Jing and Menton's long-term market share will reach 20%. Other products: Liraglutide expects revenue of more than 100 million yuan in 2024 (RMB, same below), with Engley net contributing part of the revenue.
Accelerated product iteration: 1) A number of new hypoglycemic products will be applied for marketing/approval in 2023-25: Liraglutide is expected to be approved by the end of 2023; the new third-generation product, Liliproterol 25R, and the first fourth-generation insulin hyperactive prol have entered phase III clinical trials and are expected to be listed in 2024-25; Gansin Lysine and Decalila compound preparations will be listed one after another after 2025. 2) The field of gout/high uric acid:
THDBH130 (URAT1) has completed the phase IIa clinical trial, and the company expects to complete the trial summary report in December; THDBH151 (XO/URAT1) has completed the phase I clinical trial. 3) Differentiated layout GLP-1: Oral administration of small molecule GLP-1 THDBH110 for hypoglycemic indications IND has been approved, and the company is considering applying for weight loss indications in 2024; THDBH120 (GLP-1R/GIPR) has a long half-life and is currently exploring biweekly dosing. The company expects IND to be approved in December 2023 and enter Phase I in 2024.
Actively expand overseas markets and BD opportunities: In September 2023, the company reached a cooperation agreement with Jianyou Co., Ltd., and the main types of insulin are undergoing pharmaceutical research in the US. The company expects 2H24-1H25 to be declared for BLA in the US. On the BD side, the company is actively connecting with related projects in the field of endocrine and metabolic diseases, including but not limited to CGM and long-acting GLP-1, etc., and is expected to form synergies with existing businesses in the future.
The current cost performance ratio is high, and the buying rating is maintained. We expect the company's net profit from non-return to parent to reach 1.05 billion/1.25 billion/1.49 billion yuan in 2023/24/25. With the release of three generations of insulin, the company's short-term performance recovery is highly flexible, and the value of the long-term innovation pipeline is expected to continue to be realized. We maintain our purchase rating and target price of $14.41, corresponding to 22.9x PE/1.2x PEG in 2024.