Description of the event
On March 26, 2024, the company released the 2023 performance report: the company achieved operating income of 354 million yuan for the full year of 2023, mainly including cooperative revenue generated by licensing to AZ; adjusted loss of 318 million yuan during the year of 2023 (loss of 255 million yuan last year), and R&D expenditure for the full year of 2023 was 596 million yuan (507 million yuan in 2022).
Incident comments
The core product CM310 has submitted a marketing application, and the indications continue to expand to open up the growth ceiling. CM310 is the fastest-progressing IL-4Rα monoclonal antibody developed by the company. The phase III clinical trial study for severe atopic dermatitis (AD) in adults was completed in 2023. The main endpoint data was released in 2023 EADV: The percentage of subjects who reached EASI-75 during 16 weeks of treatment in the CM310 group was 66.9%, and the percentage of subjects who reached IGA 0/1 and dropped by at least 2 points from the baseline was 44.2%. The efficacy data was excellent. The company submitted its drug marketing application for moderate to severe AD in adults to the regulatory authorities at the end of 2023 and was accepted (included in priority review). At the same time, the Phase III registered clinical study of CM310 on chronic sinusitis with nasal polyps (crSWnP) in China completed data disclosure and preliminary statistical analysis of double-blind treatment period data in December 2023, and all common endpoints were fully met. In addition, CM310 initiated two phase III clinical studies of severe AD and seasonal allergic rhinitis in adolescents in China in 2023, which is expected to further expand the future market potential of the product.
CMG901 read out PFS data, showing potential for later-line G/GEJ treatment. Previously, CMG901 (Claudin18.2-adc) for the treatment of gastric cancer and gastroesophageal junction adenocarcinoma (G/GEJ) was approved by the FDA as an orphan drug and fast track. At the same time, it was granted breakthrough therapy certification by the CDE in China, and the product value was fully revealed. In February 2023, the company and AstraZeneca reached a cooperation license for this product, involving $63 million in advance payments and potential payments of no more than $1,125 million. International MNC cooperation will accelerate the development of this product. In November 2023, the company released the latest data from the CMG901 Phase I clinical study in the form of an oral report at the ASCO PlenarySeries conference in the US: 89 evaluable patients with Claudin 18.2 positive G/GEJ had a confirmed objective response rate (ORR) of 33% in the three dose groups, and the confirmed disease control rate (DCR) was 70%. Among them, the confirmed ORR in the 2.2 mg/kg dose group was 42%, and mPFs reached 4.8 months. AstraZeneca has conducted a number of international multi-center clinical studies on CMG901/AZD0901 for the treatment of advanced solid tumors, further enhancing the commercial potential of the product.
Other pipelines are progressing in an orderly manner, and the value of the technology platform is gradually being verified. For self-immunity, the company's TSLP monoclonal antibody CM326 has also shown great potential in atopic dermatitis and CRSWnP indications. The MASP-2 antibody CM338 for IgA nephropathy is undergoing phase II clinical trials; for tumors, the company has developed a variety of bipolar drugs based on the leading domestic NTCe double antibody platform (CD3 double antibody), CM336 (BCMA/CD3 double antibody), and CM350 (GPC3/CD3 double antibody), and (GPC3/CD3 double antibody) in China Phase I/II clinical studies were carried out. Among them, CM355 has shown good initial efficacy in phase I/II clinical trials for r/r NHL indications.
Profit forecast: The company's net profit for 2024-2026 is estimated to be -7.68 billion yuan, -6.33 million yuan and -239 million yuan, respectively, corresponding EPS of -2.75, -2.26 and -0.85 yuan, respectively, maintaining a “buy” rating.
Risk warning
1. The R&D progress falls short of the expected risk;
2. Industry competition increases risk;
3. Policy risks in the innovative pharmaceutical industry.