Introduction to this report:
Annual sales of zebutinib have exceeded 1 billion US dollars. The NSCLC indication for tirelizumab is expected to be approved in Europe, and many R&D pipelines are entering the harvest period one after another. Maintain an “Overweight” rating.
Summary:
Maintain an “Overweight” rating. The company announced that it achieved operating revenue of US$2.46 billion in 2023, +73.7% year-on-year; among them, 2023Q4 and 2023 achieved product revenue of US$63 billion and US$2.19 billion respectively, +86.0% and +74.5% year-on-year, showing a rapid growth trend. As the company's operating efficiency continues to improve, the growth in product revenue exceeds the increase in operating expenses, and operating losses for 2023Q4 and 2023 were reduced by 18% and 33%, respectively, under GAAP standards. In line with the company's 2023 results announcement, the revised 23-25 revenue forecast is US$24.59/30.52/38.85 billion (previously US$25.03/30.686/US$3,913 billion), taking into account the reduction in milestone revenue in the short term after the termination of cooperation with Novartis. Maintain an “Overweight” rating.
Zebutinib's annual sales have exceeded 1 billion US dollars, and the NSCLC indication for tirelizumab is expected to be approved in Europe. Zebutinib achieved sales of 1.3 billion US dollars in 2023, +129% year over year; of these, Q4 sales were $413 million, +135% year over year and +15% month over month. We judge that this was mainly due to the continued increase in overseas market share. Tirelizumab achieved sales of 128 million and $537 million in 2023Q4 and 2023 respectively, showing a steady growth trend. Recently, the European EMA Human Medicines Commission issued positive opinions recommending three NSCLC indications to obtain marketing approval, and the international layout is gradually entering the harvest period.
The R&D pipeline continues to usher in a payout period. In 2023, the company's R&D expenses were US$1,779 million, +8.4% year on year; cash and equivalents were US$3.2 billion as of the end of the year, with sufficient capital. A number of R&D pipelines are expected to enter the harvest period: ① Zebutinib: R/R FL is expected to be approved and marketed by FDA and NMPA in March and June 24; ② tiralizumab: second-line ESCC is expected to be approved 24H1 in the US; first-line ESCC is expected to be approved in the US PDUFA in July 24; first-line gastric cancer and first-line ES-SCLC are expected to be approved domestically in 24Q2 and Q3; ③ Sonrotoclax is expected to complete MCL phase II enrollment in 24Q2; ④ oselipilizumab is expected to be approved in the US First-line NSCLC phase III clinical enrollment completed; ⑤ Tarlatamab expects 24H1 to initiate SCLC phase III clinical enrollment in China.
Catalysts: Drug doses exceeded expectations; new products under development had outstanding curative effects.
Risk factors: R&D failure; less progress in commercialization than expected; geopolitical risk.