Matters:
The company released its 2023 annual results report. The total revenue for 2023 is estimated to be 5.2292 million yuan, an increase of 186.19% over the previous year; net profit due to mother is estimated to be -184 million yuan in 2023, or -198 million yuan after deducting net profit from non-return to mother.
Commentary:
Licensed products are progressing smoothly, and milestone revenue has increased. In 2023, the company's total revenue increased by 186.19% over the same period last year, mainly due to more milestone events in cooperative R&D projects than in the previous year, and milestone revenue increased significantly. The company has a total of 12 cooperative R&D pipelines. Among them, the fastest progressing CT-1139/TQ-B3139 is an ALK inhibitor. It has submitted a marketing application and is expected to be approved for listing at the beginning of this year. Furthermore, the JAK inhibitor CT-1995/TQ05105 and the IDH1 inhibitor CT-2755/TQ-B3454 are in critical clinical trials.
The self-developed pipeline continues to progress, and the first product is about to be put into production. The company's own research pipeline focuses on lung cancer targeted drugs, and clinical research and development is progressing rapidly. The first self-developed product, the second-generation ALK inhibitor SY-707, has reached the mid-term analysis point set by the protocol in phase III confirmatory trials. The curative effect in treating ALK-positive NSCLC patients is significantly superior to crizotinib. It has already entered the pre-NDA stage and is about to be put into production. The key clinical phase III study of SY-3505, the first domestically produced third-generation ALK inhibitor compared to first-line treatment of ALK-positive NSCLC patients with crizotinib, was officially launched in December 2023. The NSCLC key phase II trial for failed treatment with second-generation ALK inhibitors completed its first enrollment in June 2023 and is progressing rapidly. Confirmatory clinical trials of the RET inhibitor SY-5007 for first-line treatment of RET positive NSCLC were officially launched in July 2023.
Investment proposal: The company is one of the few domestic companies focusing on the development of innovative small-molecule drugs. It is about to submit a marketing application for the first product, SY-707. SY-3505 is expected to become the company's first major product. According to the adjusted profit forecast according to the company's product development schedule, the total revenue for 2023-2025 is estimated to be 5.23 million yuan, 3 million yuan and 113 million yuan, respectively, up 186.2%, -42.6%, and 3655.5% year-on-year; net profit to mother is -1.84, -2.54, and -262 million yuan, respectively. According to the DCF valuation model, the company was given an overall valuation of 7.763 billion yuan, with a target price of 52.2 yuan, maintaining a “strong” rating.
Risk warning: The clinical progress of the product falls short of expectations; the commercial performance falls short of expectations; changes in the competitive landscape.