Nuochengjianhua (688428.SH) is a commercial-stage biomedical company. Since its establishment in 2015, 2 hematoma products have been approved for sale, and 13 products are in the clinical stage, covering hematomas, immune diseases, and solid tumors. The company's recommendation logic is as follows:
Obutinib is expected to maintain rapid dosage, and tamxitumab will contribute additional doses1) There is still a big gap between the five-year survival rate of Chinese NHL patients and developed countries, and it has not met huge clinical needs;
2) Increased indications for obutinib and expectations for overseas travel: all 3 indications approved for obutinib have been included in national health insurance; 4 Chinese registered phase 3 clinical trials (1L CLL/SLL, r/RMZL, 1L MCL, 1L MCD DLBCL) are ongoing and are expected to submit NDAs to the NMPA in 2024-2025; the company is developing registered phase 2 clinical trials of r/r MCL in the US, and is expected to submit an NDA to the FDA on 24Q3;
3) Tanxitumab is expected to submit BLA in mainland China in 2024Q2.
Self-exempt pipelines have entered the late stage of development
1) The treatment of ITP and SLE with obutinib has shown clinical benefits. Among them, ITP's phase 3 clinical trial is expected to complete patient recruitment by the end of 2024, and the global progress is second only to Sanofi's BTKi;
2) Two oral TyKi are in the first tier in China. Among them, the TYK2/JAK1 positive inhibitor ICP-332 has excellent data for specific dermatitis phase 2. It is expected that specific dermatitis phase 3 and vitiligo phase 2 clinical trials will be initiated in 2024. The TYK2 allosteric inhibitor ICP-488 is expected to complete phase 2 enrollment in plaque psoriasis in 2024.
In the field of solid tumors, NTRKi and FGFRi are leading domestic progress. Both have entered clinical registration for NTRK gene fusion solid tumors and FGFR fusion-positive cholangiocarcinoma. Only 2 and 1 domestic product have been approved for marketing, respectively. The company's ICP-723 (NTRK) and ICP-192 (FGFR) have both entered the clinical registration phase and have shown better efficacy.
2024 is rich in catalysts
1) 4 NDAs: obutinib (1L CLL/SLL, US r/r MCL), tamxitumab (r/r DLBCL), ICP-723 (NTRK fusion solid tumors); 2) 3 important data readouts: ICP-248 (BCL-2) single dose expansion update, ICP-248 combined with obutinib for 1L CLL/SLL, ICP-189 (SHP2) and eGFRi phase 1;
3) Five major clinical initiations: ICP-332 (AD Ph3, Vitiligo Ph2, US Ph1), ICP-248 (combined with obutinib 1L CLL/SLL Ph3, US Ph1); 4) 4 completed clinical patient recruitment: obutinib (ITP Ph3, SLE Ph2b); ICP-488 (plaque psoriasis Ph2); ICP-723 (NTRK fusion solid tumor registered clinical).
Investment advice
Nuochengjianhua is a commercialized biomedical company. 2 hematoma products have been approved for marketing, and 13 products are in the clinical stage. We believe that obutinib's revenue in the hematoma field is expected to continue to grow rapidly. The product pipeline in the field of self-immunity has entered the late development stage, both nTrKi and FGFRi in the solid tumor field have entered registered clinical trials, and the company is rich in catalysts in 2024. Using the DCF method and the NPV method respectively, we calculated that the target market value was RMB 28.373 billion, and the corresponding stock price was RMB 16.10 billion. The first coverage gives a “buy” rating.
Risk warning
Risk of R&D falling short of expectations; risk of health insurance negotiations falling short of expectations; risk of pharmaceutical industry policies exceeding expectations