occurrences
Zaiding Pharmaceutical's 2024Q1 product revenue was US$87.15 million (+38.8%), of which Egamod was US$13.16 million. Gross profit margin 61.4% (-4.6pct); R&D expenses of $54.65 million (+12.7%), R&D expenses ratio 62.7% (-14.5pct); SG&A expenses of US$69.19 million (+10.7%), SG&A expenses rate 79.4% (-20.1pct). The net loss was $53.47 million, compared to a net loss of $49.14 million for the same period last year. As of March 31, 2024, $750 million in cash and cash equivalents. Revenue exceeded expectations and net loss was in line with expectations.
reviews
The release of Agamod Q1 was successful, leading to sales of over $70 million throughout the year. Agamod treated about 2,700 new cases in 2024Q1, including about 1,000 new cases in January 2024.
Compared to about 1,000 new cases in the 3 months of launch in 2023, Agamod was successfully deployed within health insurance, and we think it is expected to achieve the annual sales guideline of more than 70 million US dollars. The subcutaneous form of egamod SBLA for CIDP indications was submitted in April 2024 and is expected to be marketed in 2025 and has good synergy with commercialization of GMG indications.
Zele continues to grow, and Qingle and New Zealand Health Insurance are further expanded. 2023Q1 sales of other products: Zele USD 45.5 million (+6.8%), Epsilon sales of USD 12.48 million (-6.2%), Qinglai USD 6.09 million (+368.7%), New Zealand Raleigh USD 9.91 million (+80.2%). Among them, in-hospital sales of first-line ovarian cancer have increased further, DOT has been extended, and Qingle's 4LGIST and New Zealand (antibiotics) medical insurance sales are growing strongly. Epsilon was +49.1% quarter-on-quarter, and sales have recovered.
Pipeline catalysis was abundant in 2024. Potential milestones include: 1) approval of 3 products/indications, including SUL-DUR (antibiotic), reputinib (ROS1/NTRK) and agamod subcutaneous dosage forms for GMG; 2) overseas approval and Chinese declaration for tumor electric field treatment of 2L+ non-small cell lung cancer; 3) reading of phase III data for first-line pancreatic cancer treatment with tumor electric field.
Profit forecasting and valuation
Based on the sales performance of Agamod and Epshield in the first quarter, we adjusted our 2024-25 revenue forecast to be US$381/518 million (previous value: US$3.7/US$53 billion), +43/36% year over year. Combined with sales costs, R&D expenses, and SG&A expenses for the first quarter, the adjusted 2024-25 net profit forecast is USD 288/-159 million (previous value: -2.8/-150 million USD). We valued the company based on the DCF model and calculated using FY2025-31 cash flow. WACC was 9.9%, with a sustainable growth rate of 2.0%. Assuming a USD/HKD exchange rate of 1:7.83, the corresponding target price was 67.51 HKD/share (previous value: 66.82 HKD/share, up 1.0%), maintaining a superior market rating.
risks
Risk of policy changes, risk of product development, risk of sales volume falling short of expectations.