Company profile
(1) The company was established in Taizhou, Jiangsu in 2015 to focus on the development of biotherapy products for autoimmune and allergic diseases. The company has two self-developed core products QX002N and QX005N. QX002N is an IL-17A inhibitor. Phase III clinical trials for the treatment of ankylosing spondylitis (AS) are currently being conducted in China, and patients are expected to be enrolled in the second quarter.
Qx005n is a monoclonal antibody (mAb) that blocks IL-4Rα. Phase II clinical trials for atopic dermatitis (AD), prurigo nodosum (PN), and chronic sinusitis with nasal polyps (CRSWnP) have been initiated in China.
(2) The company's QX001S product under development has submitted a marketing application for moderate to severe plaque psoriasis. China and the US plan to commercialize the product in the fourth quarter of 2024. If successful, it is expected to become the first domestic biosimilar of usinumab (ranked 9th in the world as a self-immune drug in 2022).
(3) The company also has four drugs undergoing phase 1 or phase 2 clinical trials, which are mainly used to treat diseases such as Crohn's disease, lupus erythematosus, and asthma. Currently, research and development will take time. We recommend focusing on QX004N for the treatment of digestive diseases Crohn's disease and lupus erythematosus. The number of Crohn's disease patients in China continues to increase, and there is a lack of high-quality biologics in the field of lupus erythematosus, so it is expected that the approval of these two indications for QX004N will attract market attention.
Industry prospects
At present, we should focus on the demand prospects for the core products QX005N, QX002N, and QX001S, which is expected to be marketed in 2024, for atopic dermatitis, ankylosing arthritis drugs, and biologics for moderate to severe plaque psoriasis. We believe that demand for atopic dermatitis biologics and psoriatic drugs will grow rapidly, while it will take some time for ankylosing arthritis biologics to become popular.
The compound growth rate of the number of patients with atopic dermatitis in China was 2.4% in 2018-22, but due to increased diagnosis rates and other reasons, sales of related drugs reached a compound growth rate of 17.8% in 2018-22. Among them, sales of biologics increased from US$13.7 million in 2020 to US$270 million in 2022, and market acceptance increased rapidly. Generally speaking, biologics are less harmful to humans, and demand is expected to increase.
In 2022, there were about 6.7 million psoriatic patients in China, of which 20%-30% were moderate to severe patients. The domestic psoriatic drug market grew rapidly from US$604.2 million in 2018 to US$1,435.8 million in 2022, with a compound annual growth rate of 24.2%. Due to the small side effects of biologics, sales of biologics have increased rapidly in recent years, and the market share in 2022 has reached 43.4%.
The number of domestic ankylosing arthritis patients reached 3.9 million in 2022. In recent years, sales in the domestic market increased from about 1.3 billion US dollars in 2018 to 1.8 billion US dollars in 2022, with a compound growth rate of 7.9% in 2018-22. However, biologics for ankylosing arthritis are difficult to develop. Currently, the only biologics in the domestic market are Novartis (NVO US) scuziumab (NVO US) and ichizizumab (LLY US) in the Chinese ankylosing arthritis market in 2022. Its share is only 16.7%. Considering the difficulty of development and market acceptance, we think it will take some time to increase the market share of biologics for ankylosing arthritis in China.