Key points of investment:
Incident: The company released its 2023 annual report. It achieved annual revenue of 97.7764 million, up 88.31% year on year, and achieved net profit of 421 million yuan, compared to -220 million in the same period last year; achieved operating income of 22.5 million in the fourth quarter, an increase of 68.56% year on year, net profit to mother - 177 million, compared to -47 million yuan in the same period last year. Full year results are in line with expectations.
The commercial potential of contizolamide continues to be realized. In 2023, the company actively expanded academic promotion, expanded its distribution network, and increased the number of hospitals covered. As of December 31, 2023, more than 450 hospitals have prescribed contizolamide tablets. It has cooperated with many pharmaceutical commercial companies such as Sinopharm Holdings, China Resources Pharmaceutical, and Shanghai Pharmaceutical to achieve nationwide drug distribution network coverage.
As a result, sales of contizolamide reached 97.7764 million yuan throughout the year, an increase of 88.31% over the previous year. At the same time, the contract was renewed in 2023, and the original price of contizolamide tablets was maintained. Considering the rigidity of product demand and the company's continuous promotion, the growth potential of contezolamide in 2024 will be further unleashed.
The clinical pipeline is progressing in an orderly manner to accelerate the expansion of the non-infectious product pipeline. The company's current R&D pipeline includes 1 marketed drug, 4 clinical-stage drugs and multiple pre-clinical drugs. Due to the simultaneous development of many key clinical trials, the company invested a total of 345 million yuan in R&D in 2023, an increase of 129.31% over the previous year, including: 1) MRX-4 (injectable dosage form of contezolamide precursor): ① sequential global multi-center phase III clinical treatment of diabetic foot infections, with 119 patients enrolled by the end of 2023; ② Phase III clinical trials for complex skin and soft tissue infections in China. By the end of 2023, a total of 51 centers had completed project and ethical approval. 46 centers had started 88 cases The test taker completed enrollment. We expect this product to go on sale in 2026. 2) MRX-8 (novel polymyxin analogue) completed China Phase I enrollment in 2023, and the report summary will be completed in 2024. 3) MRX-5 (a novel benzolylboronic acid antibiotic) started a phase I clinical trial in Australia in 2023. By the end of the year, 16 people had been enrolled, and preparations for IND declarations in the US will begin in 2024. The preclinical pipeline has developed a variety of innovative drugs through peptide drug coupling (PDC) and antibody drug conjugation (ADC) technology for nephropathy and tumors. PDC products include MRX-15 for kidney cancer and MRX-17 for nephritis, and ADC products include MRX-23 for tumor indications.
The commercialization of contezolamide is progressing smoothly, and continues to advance in the research pipeline, maintaining a “buy” rating. We maintain our previous profit forecast. We expect net profit to be -414 million and -312 million for 2024-2025, respectively, and added a profit forecast for 2026, which is expected to achieve net profit of -249 million yuan. The company is deeply involved in the antibiotic circuit and actively expands globalization, accelerates the layout of non-infectious pipelines, and maintains a “buy” rating.
Risk warning: risk of R&D failure or schedule delays, risk of product sales falling short of expectations, risk of continuous loss.