Matters:
On January 11, 2024, Chi-Med announced that the marketing application for solepinib for the treatment of primary immune thrombocytopenia (ITP) in China was accepted and included in priority approval.
Commentary:
The ITP drug market is large, and there are still unmet clinical needs. ITP is an autoimmune disease in which the immune system produces antibodies against the patient's own platelets and destroys normal platelets, causing a decrease in the number of platelets, causing bleeding. The number of cases domestically is about 110,000, and overseas is about 145,000. ITP's main therapeutic drugs include hormones, platelet-promoting drugs, and immunosuppressants. Sales of related drugs are close to US$5 billion. Most ITP patients will relapse into drug resistance, and there are still a large number of patients who do not respond well to existing treatments and have unmet clinical needs.
Differentiated mechanisms of action are expected to address drug resistance, and clinical data show potential for efficacy. Solepinib highly selectively targets B-cell receptors and the key kinase Syk downstream of the Fc receptor signaling pathway, and can inhibit B-cell activity. Unlike the mechanism of action of traditional hormones or platelet-promoting drugs, it is expected to solve drug resistance problems.
Currently, only one overseas Syk inhibitor, fortatinib, has been approved for ITP treatment, with an overall response rate of 43% and a sustained response rate of 17%. Proof-of-concept clinical phase II study data of solepinib showed an overall response rate of 80% and a sustained response rate of 40% among patients receiving multiple treatments, showing excellent efficacy potential.
It has a wide range of indications, and immunity and hematoma are expected to expand the layout. By targeting Syk, solepinib can be used to treat various B-cell lymphoma and autoimmune diseases. In addition to primary immune thrombocytopenia, Chi-Med has also carried out a phase II/III clinical study of solepinib in the treatment of warm antibody autoimmune hemolytic anemia (waIHa) in China. At the same time, global clinical trials are also carrying out dose expansion studies in 9 types of inert non-Hodgkin lymphoma, which is expected to further expand the scope of indications.
Investment advice: Solepinib is the company's fourth self-developed innovative drug. The innovative target has excellent efficacy, and the overseas competition pattern is good. It is expected to become the company's third potential variety to go overseas. We are optimistic about the company's strong R&D strength, clinical execution and commercialization promotion capabilities. Adjusted profit forecasts due to the slowdown in admission in the second half of 2023, we expect the company's revenue for 2023-2025 to be $7.17, 6.28, and $743 million (previous values of $771, 7.62, and $789 million), respectively, up 68.1%, -12.4%, and 18.3% year-on-year; net profit to mother of -0.25, -0.31, and $20 billion (previous values of -0.29, -0.09 million, and $0.23 billion).
Based on DCF model estimates, the company was given an overall valuation of HK$32.486 billion, and the corresponding target price was HK$37.29, maintaining the “Recommended” rating.
Risk warning: Clinical progress falls short of expectations, commercialization performance falls short of expectations, competitive landscape changes, and foreign cooperation falls short of expectations.