Incident: The company released its 2023 annual report. In 2023, it achieved operating income of 0.5 billion yuan (+186.18%), net profit to mother of 190 million yuan, and net profit of non-return to mother of 200 million yuan. Net profit attributable to mother for the first quarter of 2024 - 53 million yuan, net profit not attributable to mother - 56 million yuan.
SY-3505 Key III clinical enrollment was completed in March 2024 for the first case. SY-3505 is the first domestically produced third-generation ALK inhibitor to enter the clinical stage and is currently the fastest clinically advanced. The first phase III clinical trial subjects were successfully enrolled in March 2024. The SY-3505 second-line indication phase 1/2 data was published in JTO in early '24. The 80 evaluable patients who received the recommended phase 2 dose had an ORR of 47.5% and MPFs for 7.95 months. Only 14.8% of patients developed grade 3 TRAE or no CNS AEs, which had BIC potential.
The SY5007 critical II clinical trial completed the enrollment of all subjects in October 2023. The first phase III clinical patient was enrolled in July 2023. Preliminary key phase II data will be released at the ASCO conference. The first case of the Key Phase II clinical trial was enrolled in February 2023, and all subjects were enrolled in October. The preliminary data for the key phase II in February 2024 was submitted to the 2024 ASCO conference and presented in a poster. At the same time, the SY-5007 Confirmatory Phase III clinical trial also obtained ethical approval in July 2023, and the first patient enrollment was completed in that month.
The second-generation ALK SY-707 has initiated pre-NDA communication with CDE. In June 2023, the SY-707 phase III confirmatory clinical trial reached the mid-term analysis point. The mid-term analysis showed that SY-707 had significantly superior IRC-assessed PFS compared to crizotinib and was safe in ALK positive NSCLC patients. The company has already initiated pre-NDA communication with CDE. In addition, phase Ib/II clinical trials of SY-707 combined with treprilizumab and gemcitabine in the treatment of advanced pancreatic cancer have completed phase I dose escalation studies and are in the dose expansion phase.
A number of new drugs have entered the first tier of domestic production, showing excellent independent research and development capabilities. As of April 2024, the company has 24 research pipelines with independent intellectual property rights, including 12 independent R&D pipelines. In the independent R&D pipeline, 1 model is in pre-NDA communication, 2 are in critical phase II/III clinical, 1 is in phase II clinical, and 3 are in phase I clinical. In addition to the three core varieties mentioned above, SY-1530 is undergoing phase II clinical trials for recurrent or refractory mantle cell lymphoma; SY-4835 is in phase 1 clinical; and SY-5933 is in phase 1 clinical. The first case was enrolled in August 2023. The dose climbing test was basically completed, and dose expansion tests are being carried out simultaneously.
Profit forecasting and investment advice. The company is expected to achieve operating income of about 0.05, 140, and 240 million yuan in 2024-2026, respectively. Considering that Shou Pharmaceutical Holdings has strong early research capabilities and continuous improvement in clinical capabilities, the three new drugs SY-707, SY-3505, and SY-5007 are ready to go, maintaining a “buy” rating.
Risk warning: R&D or review and approval progress falls short of expected risks, increased market competition risks, policy risks in the pharmaceutical industry, etc.