Core views
The company's revenue in 2023 was about 1.08 billion yuan, an increase of about 40% over the previous year. Overall, the company's taitacip and verdicitumab are in a continuous release phase. At the same time, the company's core clinical pipeline is also progressing steadily. We believe that with the further growth of the sales team and the continuous advancement of the company's clinical pipeline at home and abroad, the overall operation of the company will become more mature.
occurrences
The company released the 2023 annual results forecast
The estimated revenue for 2023 is about 1.08 billion yuan, an increase of about 310 million yuan over the same period last year, and an increase of about 40% over the same period last year. It is estimated that in 2023, a net loss attributable to owners of the parent company will be about 1.55 billion yuan, an increase of about 552 million yuan over the same period of the previous year, and an increase of about 55% over the same period last year. Meanwhile, in 2023, the company deducted non-net loss of about 1.58 billion yuan, an increase of about 464 million yuan in losses over the same period last year, and an increase of about 42% year-on-year losses.
Brief review
Product volume continues to be released, and revenue is growing steadily
The company's core product, taitacip, has been approved for systemic lupus erythematosus and covered by medical insurance. Currently, the relevant sales team consists of about 700 people. In 2024, with the continuous promotion of the company's commercialization and the gradual development of the market, the company's sales volume of Titacip ushered in a steady increase. At the same time, the company's other core product, verdicitumab, is currently indicated for gastric cancer and urothelial cancer under medical insurance, and the product is gradually being promoted by a sales team of about 500 people. In 2023, with the company's continuous deepening cultivation, the company achieved revenue of about 1.08 billion yuan, an increase of about 40% over the previous year.
Losses have increased, mainly due to R&D investment and commercialization costs. Revenue from the company's two core products gradually increased throughout 2023, but as the company's new drug development pipeline at home and abroad continues to advance, and many innovative drugs are in the critical testing and research stage, R&D investment remains at a high level. At the same time, the company's new products are in the market development period, and team building and academic promotion activities still require continuous investment. As a result, the company is expected to have a net loss in 2023, after deducting losses before and after non-recurring profit and loss.
In the fourth quarter of 2023, the company's overall net loss was about 520 million yuan. We anticipate that this loss is mainly due to the increase in the company's R&D investment, while the shift in new production capacity and the reduction in financial revenue will also have a certain impact on the profit side. Overall, the company's operations have remained stable.
Steady and steady, and the overall operation of the company is steady
In March 2023, the company applied for comprehensive credit lines totaling no more than 5 billion yuan from banks and other financial institutions. As of 2023Q3, the company's monetary capital and transactional financial assets totaled 790 million yuan. Overall, the company is operating well, and with the further growth of the sales team, the company's future operations will become more mature.
RC18: RA indications submitted for marketing, MG and many other clinical trials continue to be promoted domestically: SLE: domestic phase III confirmatory clinical trials have been completed, and supplementary marketing applications are being submitted at the end of 2022. Children's SLE phase III and phase II lupus nephritis are being promoted; RA: rheumatoid arthritis submits marketing applications, and approval of the new indications is expected to drive further release of the product; IgA nephropathy:
Domestic phase III clinical trials are progressing smoothly; MG: Domestic phase III clinical enrollment continues; PSs: Domestic phase III clinical trials have started, and patients continue to enroll.
Tetacept also has potential for various other autoimmune indications, and domestic phase II/III clinical trials for indications such as optic neuromyelitis and multiple sclerosis have been fully carried out.
Overseas: SLE: Overseas phase III research continues; MG: It has obtained orphan drug qualification and is steadily preparing to begin phase III clinical research; IgA nephropathy: continuous communication with the FDA, phase III clinical research is in preparation; PSs: Phase III clinical research is in preparation.
RC48: First-line UC is being promoted, SEAGEN helps internationalization
Domestic: UC: Phase III clinical trials with PD-1 first-line treatment in China are ongoing, and phase II clinical trials of perioperative invasive bladder cancer (MIBC) continue to advance; GC: combined with PD-1 and chemotherapy or combination with PD-1 and hesetin to treat first-line patients with locally advanced or metastatic gastric cancer with locally advanced HER2 expression or metastatic gastric cancer; BC: In phase III clinical enrollment of patients with low HER2 expression, the Chinese phase III trial of BC with high expression of Her2 was completed at the end of 2022 Enrolled, the product is also undergoing several other clinical trials at the same time.
Overseas: UC: Two clinical studies have begun overseas. The key clinical trials of 2L UC as a single drug are continuing to advance. Phase III studies of treating 1L UC with K drugs are continuing to advance, and patients are continuing to enroll.
RC88: Clinical progress continues, the product is worth looking forward to
In December 2023, RC88 was approved by the US FDA to conduct an international multi-center phase II clinical study. Meanwhile, phase II clinical research on the product continues to advance in China. As a targeted MSLN ADC, RC88 has shown excellent anti-tumor activity and good safety before clinical trials, and the product results are worth looking forward to.
Three core technology platforms continue to drive innovation pipeline expansion
The company has built a world-class independent innovation R&D engine, covering the whole process of biological discovery, target screening and verification, drug discovery, research and development, including three novel biopharmaceutical development technology platforms: ① antibody and fusion protein platforms, which develop products such as titasip, RC28, and RC98; ② antibody-conjugated drug (ADC) platform, developed RC48, RC88, RC108 based on this platform; ③ Bi-functional Antibody (Hibody) platform, developed RC138, RC148, and RC158 based on this platform. The company's early pipeline continues to advance. RC98 (PD-L1 monoclonal antibody) is currently undergoing joint tests with RC48 for gastric cancer and other indications; RC88 (mesothelin ADC) and RC108 (c-Met ADC) have entered the IB/IIa patient expansion period; RC118 (CLDN18.2 ADC) is undergoing phase I climbing in China and Australia; RC198 (IL-15/IL-15Rα) has successively obtained phase I clinical IND approvals in Australia and China in May and July of this year; RC148 (double (anti) was approved for phase I clinical IND in China in July of this year.
Profit Forecasts and Investment Ratings
The company has established and perfected three innovative core technology platforms, and its independent research and development capabilities are strong; it is expected that the indications for popularized verdicitumab will continue to expand, and the company's commercialization capabilities will be verified; at the same time, the company's internationalization has begun, and cooperation has been reached with SEAGEN on RC48's overseas rights. RC18 is actively promoting clinical trials, and the overall operation is becoming more mature and stable. However, due to the impact of industry changes, we expect that in 2023-2025, the company's revenue will be 1,082 billion yuan, 1,550 billion yuan, and 2,453 billion yuan, respectively, and the company's net profit will be -1,551 billion yuan, -1,393 billion yuan, and -944 billion yuan respectively. Maintain a “buy” rating.
Risk warning
The company's innovative drug research and development progress and new drug review time fell short of expectations. The company's core products, such as tetracip, verdicitumab, and RC28, all had different indications. Due to the many drug review and approval processes, long cycles, and high uncertainty, there is uncertainty about the expansion of indications; the pressure on medical insurance fees exceeds expectations, and the company's product pricing falls short of expectations. The company's core products are currently included in medical insurance, and there are still new indications renewal negotiations. If the decline is significant, it may have an impact on the company's commercialization process; commercialization progress falls short of expectations, such as market expansion and academic expansion Broad coverage, medical insurance coverage, etc. Progress in this area falls short of expectations, or the sales team's failure to keep up with policy trends and grasp market competition trends will affect the company's future commercialization capabilities; overseas expansion falls short of expectations.