Incidents:
Recently, Junshi Biotech announced that the anti-PD-1 monoclonal drug treprilizumab injection (Tuoyi?) independently developed by the company Perioperative treatment with combination chemotherapy, followed by a single drug as adjuvant treatment for adult patients with resectable stage IIIA-IIIB non-small cell lung cancer (NSCLC), was recently approved by the National Drug Administration (NMPA).
Comment:
Treplimumab was approved as the country's first perioperative PD-1 therapy for NSCLC, and the patient population is vast. This is the seventh indication for treprilimab approved in China. It is also the first perioperative treatment for lung cancer approved in China and the second in the world to be approved. Lung cancer is currently the malignant tumor with the second highest incidence rate and highest death rate in the world. In 2020, lung cancer cases in China accounted for 17.9% (816,000) of the number of new cancer cases and 23.8% (715,000) of cancer deaths. NSCLC is the main subtype of lung cancer, accounting for approximately 85% of all cases. Among them, 20-25% of patients can be surgically removed at the time of initial diagnosis. It is expected to be used for more than 100,000 patients, and the target patient population is broad.
Existing treatments have limited efficacy, and treprilizumab showed excellent phase III clinical results. Even when treated with radical surgery, 30-55% of patients with operable NSCLC will relapse and die after surgery. The clinical benefits of chemotherapy as a new adjuvant before surgery or adjuvant treatment after surgery are limited, and can only improve the 5-year survival rate of patients by about 5%. The approval of this new indication is mainly based on the NEOTORCH study, which is a randomized, double-blind, placebo-controlled, multicenter phase III clinical study. The study data showed that compared with simple chemotherapy, triplimab combined chemotherapy used in perioperative treatment of resectable stage III NSCLC can significantly prolong patients' EFS, reduce patients' risk of disease recurrence, progression, or death by 60%, and regardless of PD-L1 expression status or histological type, all key subgroups observed the survival (EFS) survival (EFS) of the treprilizumab group benefit. This clinical trial is the world's first phase III clinical study of anti-PD-1 monoclonal antibodies for NSCLC perioperative treatment to achieve positive EFS results.
Treplimumab continues to expand indications. It is expected that 10+ indications will be approved, and we will continue to monitor the performance progress of core products. Tuoyi Global has carried out more than 40 clinical studies with more than 15 tumor indications. At present, 7 domestic indications have been approved. With 3 first-line indications successfully entering the new national health insurance catalogue, 6 indications have been included in the medical insurance catalogue. At the same time, 3 new NDA have been accepted by the NMPA, and it is expected that 10+ indications will be approved in the future; overseas nasopharyngeal cancer indications have been approved by the FDA, achieving the milestone of domestically produced innovative drugs, and it is expected that more than 50 countries will continue to reap milestone payments and sales shares. Treplimumab is expected to continue to increase dosage, and it is recommended to continue to monitor relevant performance developments.
Profit forecast and valuation: The company focuses on the development of innovative drugs in the field of oncology, etc., with promising potential. It is expected to achieve revenue of 13.90/18.47/2,840 billion yuan in 2023-2025, with earnings per share -1.97/-1.13/-0.28 yuan/share, maintaining a “buy” rating.
Risk warning: R&D pipeline progress falls short of expected risks, commercialization falls short of expected risks, etc.