Product sales are growing rapidly. Maiwei Biotech achieved revenue of 128 million yuan (+361%) in 2023. The sharp increase in revenue was mainly due to the company's 9MW3011 project authorized and received a down payment of 10 million US dollars, while achieving pharmaceutical sales revenue of 42 million yuan; the company achieved a net loss of 1,053 million yuan for the whole year (loss of 955 million yuan in the same period last year). The company's R&D expenses in 2023 were 836 million yuan (+10.2%); sales expenses were 143 million yuan (+82.0%), and management expenses were 225 million yuan (+19.2%). The commercialization of core products is progressing well. The company commercialized two products in 2023: adalimumab (junmaikang) and desumab (melisu). Among them, Junmaikang completed the delivery of about 167,000 bottles, completed tenders in 26 provinces, and entered 173 hospitals, covering 1,316 pharmacies; Milishu completed the delivery of about 84,000 bottles, completed tenders in 28 provinces, and entered 605 hospitals, covering 2,061 pharmacies.

Nectin-4 ADC is rapidly advancing clinical trials with multiple indications. The company's core product, 9MW2821 (Nectin-4 ADC), began phase 3 clinical trials with 3L UC indications at the end of 2023. The R&D progress is second in the world, and it has a large leading edge among domestic same-target products. Under RP2D, 9MW2821 has ORR = 62.2%, DCR = 91.9%, and MPFS = 6.7Mo, which has BIC potential. In addition, the 9MW2821 single drug has also obtained excellent early clinical data in late-line cervical cancer and esophageal cancer, and it is expected that phase 3 clinical trials will advance. On the other hand, the application of 9MW2821 in combination with PD1 monoclonal antibody in first-line treatment is also being investigated early in clinical practice.

Investment advice: Maintain an “increase in holdings” rating.

We maintain our revenue forecast. We expect 2024-26 revenue of 417/8.87/1,431 million yuan, an increase of 226%/113%/61% year over year; due to the company's continued investment in R&D, we slightly lowered our profit forecast for 2024-25, and expected net profit of -7.49/ -5.16/- 126 million yuan for 2024-26 (-6.48/- 435 million yuan 24-25 years ago). The company's Nectin-4 ADC is leading in development progress, has excellent early clinical data, and has a differentiated indication layout, maintaining an “incremental” rating.

Risk warning: Innovative drug development has failed or is progressing below expectations; innovative drug sales fall short of expectations.