Core view: (Unless otherwise specified, the currency units of this report are all US dollars, 1USD=7RMB=7.7HKD)
Deeply involved in the field of oncology and entered a new stage of “commercialization+internationalization”. According to Hutchison Pharmaceuticals's financial report, the company has been approved for listing 3 products and has reached cooperation with many internationally renowned pharmaceutical companies such as Eli Lilly and AstraZeneca. The company achieved revenue of US$838 million in 23 years, and its core oncology business grew rapidly to US$529 million, of which product revenue was US$164 million, an increase of 32% over the previous year.
Fruquintinib went overseas successfully, and the advantages of gastrointestinal indications are obvious. According to the company's financial report, in 2023, the company and Takeda Pharmaceuticals agreed to cooperate on overseas interests in fruquintinib, with an initial payment of $400 million plus a potential milestone payment of $7.3 billion. According to the company's 2023 performance briefing presentation, fruquintinib has obvious advantages for third-line treatment of colorectal cancer, with a domestic market share of 47%; it was approved in the US in November 2023, and sales reached US$15.1 million by the end of the year; second-line gastric cancer TIGFRUA data was released, PFS reached the end (5.6 months), and the domestic NDA has been accepted and is expected to be approved in 2024; multiple indications for endometrial cancer are expected to be submitted in the first half of 2024. Enrollment has also been completed.
The product hierarchy is rich and orderly, and multiple pipelines have ushered in a harvest period. According to the company's financial report, sevotinib was officially included in medical insurance in March 2023, and sales of Q2-4 increased by 104% year-on-year, and 7 registration studies are progressing at full speed; surufatinib covers all sources of NET, 23Q4 domestic market share is 21%, and NEC registration studies are fully enrolled; phase I/II data on treating ITP with solepinib is impressive, phase III has reached the main end point. The NDA was accepted and included in priority review in January 24. The US clinical trial is about to open, and the market space is broad; Tazetar's domestic bridging trial and registration The cohort has all completed enrollment, and the follow-up pipeline includes various differentiated drugs such as HMPL-453, which is full of motivation.
Profit forecasting and investment advice. The company's R&D, commercialization and overseas capabilities have been initially verified, and the differentiated innovation pipeline is sufficient. As each product gradually enters the harvest period, the company is expected to turn a loss into a profit in 25 years. Net profit due to mother for 24-26 is estimated to be -1.16/+0.01/+115 million USD, respectively. The DCF method obtained a reasonable value of HK$40.44/share, giving it a “buy” rating.
Risk warning. Drug review risks, fee control policy risks, R&D progress falls short of expectations.