Baiaotai Co., Ltd. announced that in 2023, the company achieved operating revenue of 705 million yuan, an increase of 54.86% over the previous year. Net profit attributable to the owner of the parent company - $395 million, a decrease of 17.87% from the previous year's loss; net profit attributable to the owner of the parent company after deducting non-recurring profit and loss - $472 million, a decrease of 9.72% from the previous year's loss amount.

Key points of investment

Adalimumab continues to grow. Adalimumab contributed additional amounts. Adalimumab is the company's first biosimilar to be approved. It has been approved for eight indications domestically, and cooperation has been reached with more than 1,000 prescription hospitals and more than 1200 pharmacies. Sales maintained steady growth in 2023, contributing to the company's largest source of revenue. Tocilizumab was approved for marketing in China in January 2023. The three indications have now covered more than 100 provincial commercial companies and more than 300 hospital terminals, contributing to some of the new volume in 2023.

Going overseas obtained listing approval from the US FDA and entered the revenue cashing period in 2024

The company is one of the first domestic biopharmaceutical companies to set up an internationally regulated market. A total of 2 products (BAT1806 tocilizumab and BAT1706 bevacizumab) have obtained marketing approval from the US FDA. Among them, BAT1806 is the first tocilizumab-like drug approved by the FDA. In 2023, the sales revenue of original tocilizumab in the US was 1,223 billion Swiss francs. BAT1806 is expected to be officially marketed and sold in the US in May 2024, and Bioge is responsible for overseas promotion. The company has submitted a listing license application for BAT1706 to the European EMA, and we expect to obtain a listing license in 2024. The company also has golimumab and usinumab completed global phase III clinical trials, which are expected to occupy the first tier of marketing applications for similar varieties.

Steadily promote research and development of new drugs

The company invested 769 million yuan in R&D in 2023, an increase of 24.70% over the previous year. Overseas listing of the company's bioanalogues is expected to gradually support continued investment in R&D. In terms of new drug research and development, BAT2094 (bartifiban) is currently in the domestic marketing application stage, and we expect it to be approved for marketing in the first half of 2024. As an antiplatelet aggregation drug, batifiban can also inhibit the growth of smooth muscle in blood vessels and reduce the risk of arterial blood vessel re-blockage. Among the ADC drug series being developed, BAT8006 is progressing the fastest clinically, and phase 2 clinical results are expected to be obtained in 2024. An ADC drug with the same target for BAT8006 has been approved and marketed by the US FDA. This target has been expressed in various solid tumors such as ovarian cancer, lung cancer, endometrial cancer, and breast cancer.

The company uses a new self-developed ADC technology platform for development, and its safety and efficacy data are more worth looking forward to.

Profit forecasting

Relying on the growth of domestic sales of adalimumab and sales breakthroughs in the European and American standardized markets of tocilizumab, the company's 2024-2026 revenue is estimated to be 11.37, 15.81, and 2,212 billion yuan respectively, with net profit attributable to mother of -1.44, 1.92, and 639 million yuan respectively, EPS being -0.35, 0.46, and 1.54 yuan respectively. The company is the earliest domestic company to lay out biosimilar exports. Overseas clinical research and development is in a leading position, and will go overseas in the future The commercial platform is expected to gradually be validated and maintain a “buy” investment rating.

Risk warning

There are risks such as uncertainty about overseas regulatory market expansion, sales falling short of expectations, R&D progress falling short of expectations, and overseas approval falling short of expectations.