Overseas layout: The strategy strengthens overseas layout and builds an overseas commercialization platform Kexing Pharmaceuticals has established a relatively complete overseas commercialization system and formed a certain advantage in emerging markets.
At present, the company's products have entered and been sold through markets in about 40 countries and regions, including Brazil, the Philippines, and Indonesia, and the company's sales network has 100% covered the markets of emerging countries with a population of over 100 million.
Since 2020, the company's strategy has strengthened its overseas layout, introduced more than 10 new products one after another, and the initial construction of the platform was completed. Currently, various products have successively entered the overseas factory inspection and audit stage, and it is expected that many varieties will be approved for listing in many countries this year.
Introduced products: More than 10 varieties have been introduced. The initial platform effect will end in January 2024. Kexon Pharmaceuticals has introduced and cooperated with more than 10 products. In the field of breast cancer treatment, there are 5 products: albumin paclitaxel, trastuzumab, bevacizumab, nelatinib, and elibulin mesylate, forming a product matrix in key tumor fields. Among them, there is a shortage of albumin paclitaxel in the European Union, and Kexon Pharma's products are expected to reach a high sales amount after they are launched. Albumin paclitaxel is recommended as the mainstream first-line medication for the treatment of metastatic pancreatic cancer and non-small cell cancer in the European Society of Medical Oncology guidelines. In 2023, the European Supervisory Authority issued a shortage notice on albumin paclitaxel. Currently, only two companies are selling it in the EU, and the competition pattern is good. As cancer incidence rises in Europe, the market demand for albumin paclitaxel is expected to expand further. Kexon Pharmaceutical was granted commercial rights for albumin paclitaxel in all regions outside the US by Haichang Biotech in 2021, and welcomed the EU's on-site inspection of white purple production GMP in early February 2024, which was highly praised by the EU audit team. If it goes well, it is expected to quickly open up the European market after listing.
Traditional business segment: The original business remained stable, contributing to stable cash flow. As an important enterprise in the field of recombinant protein drugs, Kexon Pharmaceuticals' operating income in 2022 came from four core products, namely human erythropotropin (iprudine), human interferon α1b (sirogin), human granulocyte stimulating factor (Baitxi), and C. butyrate bi-active bacteria (Chang Lecang). The four products are leading in market share in various segments. The main business contributes stable cash flow to the company.
Profit forecasting and valuation
Considering that Kexon Pharmaceuticals has introduced and cooperated with more than 10 products, and overseas commercialization is imminent, and it is expected that the company's overseas platform value will be realized through cooperation. We expect the company's revenue from 2023 to 2025 to be 12.59, 14.15, and 1,897 billion yuan, respectively, and net profit to mother of -189.57, 53.27, and 152.8 million yuan, respectively. The PS method was used to value the company's business, and the company was given 4.3 times PS in 2024. Based on this calculation, the company obtained a reasonable valuation of 6.085 billion yuan, and the target price was 30.55 yuan. First coverage, giving a “buy” rating.
Risk warning: industry policy risk, foreign exchange and exchange rate risk, drug iteration risk, drug development failure risk, related estimates have subjective hypothetical risks