The impact of collection is basically clear, and the stock business or bottom has been reversed: after years of development, Osaikon has covered the four treatment fields of digestion, anti-tumor, chronic diseases, and anti-infection. The vast majority of its high-stock generic drugs have already been collected, leaving only Nidaplatin and Urezoson, which are expected to be collected. The foreseeable impact in the future is limited. With the release of medical insurance, the stock business is expected to reverse from the bottom.

With a forward-looking layout in the field of IL-15, two precursors have entered the clinical stage: IL-15 was first discovered in 1994. It received widespread attention from the industry due to its low toxicity, weak Treg cell stimulating effect, and ability to expand NK and CD8+T cells, but its development was limited due to its short half-life and poor safety. The company's IL-15 product uses shielding peptides plus lyzable connectors to avoid cytokine sinks while accurately locating to the tumor microenvironment (TME). The company has developed two FIC cytokine prodrugs ASKG315 (IL-15) and ASKG915 (IL-15/PD-1) through the self-developed cytokine precursor technology platform SmartKine, which have both entered the clinical stage and are expected to cover many types of cancer with poor efficacy of existing PD-1 monotherapy.

The three core assets are in the late clinical stage and are about to enter the pipeline harvest period: preliminary data of ASKB589 showed impressive antitumor activity, or was effective against the medium to high expression of Claudin18.2 (2+ and above staining of ≥ 40%). CorR and DCR of ASKB589 combined with CAPOX treatment (2) in the phase II expanded clinical study reached 79.2% and 95.8%, respectively. ASKB589 combined with PD-1 and CAPOX treatment (triplet) has been approved for phase III clinical approval in China, and it is expected that the first patient enrollment will be completed in December 2023 as soon as possible; maltophenol iron introduced from Shield TX (UK) Limited is clearly differentiated from domestic oral administration and intravenous iron drugs. Phase III clinical trials are progressing smoothly. It is expected that production in H2 in 24 years will achieve double crossing in the future; the new drug marketing application for lietinib is in the pipeline, and it is expected that its 2L indication will be approved for marketing in 2024. Use c-MET inhibitors in combination, or open the product's second growth curve.

Investment suggestions: The generic drug inventory business has bottomed out, and the core assets of the three innovative drugs have entered phase III clinical trials. We expect the company to achieve operating income of 14.56/16.38/1,824 billion yuan respectively in 2023-2025, covering the first time, and giving it an “increase in holdings” rating.

Risk warning: There is uncertainty about clinical trial progress and results; there is uncertainty about drug approval; there is uncertainty about drug commercialization; risk of policy uncertainty, etc.