Incidents:

On November 28, the company issued an announcement stating that based on the results of the phase Ib/Il clinical trial currently carried out by KC1036, the company has submitted to the CDE “a randomized, controlled, open, multi-center phase III clinical study to evaluate patients with advanced recurrent or metastatic esophageal squamous cell carcinoma with chemotherapy selected by the researchers” and obtained CDE approval. KC1036

Breakthrough in research and development, KC1036 approved for clinical phase research

KC1036 is a research and development product in the oncology field strongly dominated by the company. It conforms to the company's “new global” R&D standards. Its treatment range includes non-small cell lung cancer, gallbladder cancer, cholangiocarcinoma, gastric cancer, and leukemia. This drug is the world's first multi-target receptor tyrosine kinase AXL/VEGFR2/FLT3 novel small-molecule targeted antineoplastic drug. At present, KC1036 has received approval for the CDE phase I clinical trial. The company expects to launch phase JII clinical research on the treatment of advanced esophageal squamous cell carcinoma. As research and development progress continues to advance, it is expected that in the future, the company's product pipeline will be enriched and expanded in the field of malignant tumor treatment and other fields, enhancing the company's position in the industry.

KC1036 has invested heavily in R&D and has good clinical performance

In the first three quarters of 2023, the company's R&D expenses reached 67.2199 million yuan, an increase of 22.87% over the previous year. Up to now, the KC1036 project has invested about 235 million yuan in R&D expenses. Among more than 100 patients with advanced solid tumors during clinical phase I trials, KC1036 observed significant clinical efficacy in various solid tumors such as esophageal cancer and thymus. Furthermore, KC1036 has achieved excellent results in anti-tumor effects, clinical-specific safety, and tolerability results. During the phase I clinical trial, the current clinical study results in more than 200 subjects showed the outstanding anti-tumor activity and safety of KC1036. According to company data, the ORR of patients with advanced esophageal squamous cell carcinoma (ESCC) treated with KC1036 monotherapy was 26.1%, DCR was 69.6%, and MOS was 71m (95% CI: 42NA) results data significantly superior to existing clinical results.

Research and development of the remaining projects is progressing smoothly, and the product pipeline is expected to continue to enrich R&D progress. In addition to the KC1036 project, the company's main research projects currently include gold grass tablets and snake hemagglutinin for dogs for injections. In terms of progress in research and development of Jincao tablets, Jincao tablets are 1.2 of the new traditional Chinese medicine currently being developed in China (originally the 5th new traditional Chinese medicine). Their main components are obtained from the extraction of whole myrtle herb. The main application scenario is chronic pelvic pain, which is the sequelae of pelvic inflammatory disease. According to the company's announcement on August 23, Jinyuan has completed the enrollment of all phase I clinical subjects. Snake blood coagulase for dogs is the company's first product that is expected to enter the pet drug race. With the gradual opening of the pet surgery market in China, if the product is marketed in the future, it is expected to add new performance growth points to the company. Overall, the company's R&D pipelines are progressing in an orderly manner, and some projects have achieved phased breakthroughs during the year, which is expected to support the company's continued rapid development in the future. Investment advice: We expect the company's diluted EPS for 2023-2025 to be 101 yuan 117 yuan and 142 yuan respectively, and the corresponding dynamic price-earnings ratios are 40.09 times, 34.95 times, and 28.92 times, respectively. As a leading enterprise in the hematoclase formulation industry segment in China, Kangchen Pharmaceutical has benefited from the resumption of growth in the number of surgeries in medical institutions. Through continuous R&D innovation and product introduction, various R&D projects are currently progressing smoothly. KC1036 is about to enter the clinical IIT stage. Phase I clinical trials of the innovative Chinese medicine Jincao tablets are progressing smoothly. In the future, the company is expected to usher in diversified implementation of innovative achievements and maintain purchase rating risk alerts; Drug development falls short of anticipated risks, policy risks, and increased market competition risks