Introduction to this report:
The company released its 2023 and 2024 quarterly reports. The performance is in line with expectations, R&D investment has been further increased, and clinical trials are progressing steadily. GR1501 has submitted supplementary materials on 24.2 and is expected to be approved in 2024H1, which will enable subsequent performance growth.
Key points of investment:
Maintain an “Overweight” rating. The company released the 2023 report and the 2024 quarterly report, and the performance was in line with expectations.
Non-net profit deducted for 23 years - $813 million, up from losses in the same period in '22. It is estimated that R&D investment will increase mainly due to continued progress in clinical trials of various products and continuous pipeline expansion. 24Q1 deducted non-net profit of 165 million yuan, and the loss was slightly reduced. The 2024-25 forecast EPS-1.98/ -1.42 yuan was maintained, and the 2026 forecast EPS-0.95 was added. According to the DCF valuation method, the target price was raised to 48.35 yuan, and the “gain” rating was maintained.
GR1501 psoriasis is expected to be approved in 2024H1, and ankylosing spondylitis is expected to be approved in 2025.
GR1501 is the fastest-progressing IL-17A produced in China. Psoriatic indications were submitted for NDA in 2023.3 and supplementary materials were submitted on 2024.2.23. Currently in line for review, we expect 2024H1 to be approved for marketing; ankylosing spondylitis indications were submitted for NDA in 2024.1.4 and accepted by CDE, and we expect to be approved for marketing in 2025. The GR1501 is expected to be the first domestically produced IL-17 to be launched. Once launched, it can take the lead in seizing market share. The first-mover advantage is obvious, and the peak value is expected to exceed 2 billion yuan.
R&D investment has been further increased in 23 years, and the clinical development of core products has progressed steadily. R&D investment continued to increase in 2023, reaching 620 million yuan (+36.5%), mainly due to the development of new clinical trials with multiple products and the entry of core products into key clinical trials; 419 R&D personnel, +21.9% year-on-year; and 24Q1 R&D investment of 130 million yuan (-11.3%). The core product is progressing steadily clinically, and the overall clinical efficiency is high: ① GR1802 (IL-4R): 23.11 initiates phase III of moderate to severe AD and completes phase II enrollment; 2024.1 was approved for allergic rhinitis; 2024.4 completed phase II enrollment, and the enrollment rate is relatively fast; ② GR1801 (rabies double antibody): 2023.9 has entered phase III and has now completed enrollment. We expect 24H2 to complete phase III and submit NDA; ③ GR2001 (tetanus monoclonal): 2023.10 The first phase II patient was enrolled and has now applied for EOP2 communication. Phase III is expected to be carried out in 24; ④ All other pipelines are progressing steadily.
Catalysts: GR1501 approved for marketing, GR1802 data readout, other pipeline entry key clinical risk tips: risk of R&D failure, risk of falling short of expectations in commercialization