Event Overview:

The company released its 2023 annual report: The company achieved operating revenue of 127.8355 million yuan, mainly from technical service revenue of 85.5953 million yuan and pharmaceutical sales revenue of 42.0896 million yuan, an increase of 361.03% over the same period last year. In terms of R&D, the company invested 835.7818 million yuan in 2023, an increase of 10.17% over 2022.

Analytical judgment:

1. During the reporting period, the company's revenue increased by 100.1074 million yuan over the same period last year, up 361.03% year on year, mainly due to the 9MW3011 project and the United States

DISCMEDICINE, INC. entered into an exclusive license agreement and received a non-refundable down payment of $10 million from it, and Malishu? As a result of achieving confirmed revenue from sales of new products.

2. The net loss attributable to shareholders of listed companies during the reporting period and net loss attributable to shareholders of listed companies after deducting non-recurring profit and loss increased by 98.1981,000 yuan and 93.1013 million yuan respectively over the same period of the previous year. This is mainly due to the fact that the company continued to invest a large amount of money in clinical trials of the products under development. Many of the varieties under development were in the critical registration clinical research stage, which led to a high amount of the company's R&D expenses, as well as the further expansion of the commercialization team.

3. The net cash flow outflow from operating activities during the reporting period increased by 63.5571 million yuan over the same period of the previous year, mainly due to the increase in personnel remuneration paid in the current period and investment in sales activities compared to the same period of the previous year.

Nectin4 ADC shows excellent data in multiple cancer types and is optimistic about future potential

Urothelial carcinoma: As of December 5, 2023, 9MW2821 had 62.2% (95% CI: 44.8%-77.5%) and 91.9% (95% CI: 78.1%-98.3%) and 91.9% (95% CI: 78.1%-98.3%) in the phase II clinical 1.25 mg/kg dose group, with a median PFS of 6.7 m (95% CI: 3.8-NR). The median OS has not been achieved. The clinical progress of 9MW2821 urothelial cancer is second only to the marketed PADCEV? in the global Nectin-4ADC. Currently, several clinical studies have been carried out simultaneously in this project. For first-line therapy, phase I/II clinical research in combination with PD-1 inhibitor immunotherapy is also underway, and the first case has now been enrolled.

Cervical cancer: As of September 25, 2023, the detection rate of Nectin-4 expression was 89.67%, and the detection rate of Nectin-43+ was 67.82% in the cervical cancer expansion cohort of the study. A total of 40 patients were enrolled in the study. 57.5% of participants had previously received platinum-containing dual-drug chemotherapy combined with bevacizumab, and 60% of participants had previously received platinum-containing dual-drug chemotherapy and immune checkpoint inhibitors. The ORR and DCR of the 37 patients whose efficacy could be assessed were 40.54% and 89.19%, respectively. Of these, 1 case had complete remission (2.70%) and 14 had partial remission (37.84%). The median survival (PFS) without disease progression, overall survival (OS), and duration of remission (DOR) had not been achieved.

Among patients treated with platinum-containing dual-drug chemotherapy and immune checkpoint inhibitors, the ORR and DCR of 21 patients whose efficacy could be assessed were 38.10% and 85.71%. Among patients with Nectin-43+, the ORR and DCR of 26 patients whose efficacy could be assessed were 50.00% and 92.31%, respectively.

Esophageal squamous cell carcinoma: As of February 20, 2024, the ORR and DCR of 30 patients with advanced esophageal cancer who were treated with a single agent and completed at least one tumor evaluation for 9MW2821 were 30% and 73.3%, respectively. Of these, 28 patients had received chemotherapy and immunotherapy. The study continues to be enrolled and evaluated. Compared to existing treatments, 9MW2821 has shown great potential and advantages in the treatment of esophageal cancer.

? Investment advice

Considering the pace of the company's product sales volume and optimistic about the company's strong target R&D strength, clinical execution and commercialization promotion capabilities, and adjust early profit expectations: We forecast the company's revenue from 2024 to 2026 to 400/14.90/2,829 billion yuan (previous value: 700/22.62 billion yuan), up 213%, 273%, and 90% year-on-year respectively; net profit to mother is -9.71/-5.78/ -0.68 billion yuan (previous value -7.50/-6.79/155 million yuan), EPS They were -2.43/-1.45/ -0.17 yuan (previous value -1.88/ -1.70/0.39 yuan), respectively. Using the free cash flow discount valuation method, the company's valuation was 18.6 billion yuan (previous value 17.892 billion yuan), corresponding to a stock price of 46.66 yuan (previous value 44.78 yuan), maintaining a “buy” rating.

? Risk Alerts

The commercialization performance of the product fell short of expectations after launch, and the clinical performance of innovative products fell short of expectations