1Q24 results slightly exceeded our expectations
The company announced 1Q24 results: revenue of USD 752 million (+68% YoY), net loss to mother of USD 251 million, product revenue slightly exceeded expectations, reasonable cost control, and revenue and profit slightly exceeded our expectations.
Development trends
Global sales of zebutinib surpassed expectations strongly. Overseas sales of 1Q24 zebutinib were strong, exceeding our and market expectations. 1Q23-1Q24 sales were US$2.11/3.08/3.58/4.13/ US$489 million, respectively, with a month-on-month growth rate of 20%/46%/16%/15%/18.4%, of which the US 1Q24 sold US$352 million (+153% YoY), Europe US$66.8 million (+243%), and China US$57.4 million (+19% YoY). The company's 1Q23-1Q24 product revenue was US$4.10/5.53/595/6.32/747 million, respectively, with a month-on-month growth rate of 21%/35%/8%/6.2%/18.2%. Driven by new 1L CLL patients and the continued increase in the market share of 2L CLL in the US, and the entry of key EU countries into medical insurance reimbursement, we expect zebutinib's market share to continue to increase, and global sales will maintain a high growth rate in 24 years.
Zebutinib's patent challenge to ibutinib 803 is progressing smoothly. On June 15, 2023, AbbVi/Pharmacyclics filed a complaint against the company, alleging that zebutinib infringed a newly authorized patent for how to use ibutinib. The company subsequently declined the complaint and initiated an invalid '803 patent appeal process. On May 1, '24, the US Patent Trial and Appeals Board decided that BeiGene's appeal was More LikelyThan Not Grounded (more than 50% likely) and initiated a post-licensing review of the patent's invalidity. 1 We believe that the acceptance of PTAB is an initial positive sign, and it is recommended to pay attention to subsequent patent developments.
Tirelizumab is progressing smoothly, and attention is being paid to the progress of the core pipeline and early solid tumor pipeline. 1Q24 tiralizumab sales were US$145 million (YoY +26.5%), in line with expectations. On April 23, 24, tiliserizumab was approved by the European Commission for first-line and second-line treatment for three NSCLC indications. We expect tirelizumab 1L ESCC and gastric cancer to be approved in the US in 24 years. The company is preparing to set up an overseas solid tumor sales team. The company anticipates that BTK CDAC's clinical expansion queue for CLL and MCL may be marketed as an accelerated approval and is expected to launch R/R CLL Global Registration Phase III by the end of 24. Clinical phases 2 and 3 of zebutinib for SLE and membranous nephropathy are ongoing, with solid tumor assets such as ADC and CDAC focusing on breast cancer and lung cancer.
Profit forecasting and valuation
Since zebutinib's 1Q24 sales exceeded our expectations and cost control remained stable, we expect zebutinib to accelerate, so we raised our 24/25 revenue forecast by 3%/2% to US$31.16/3,989 million US dollars, and raised our 24/25 net profit forecast from -12.55/ -720 million US dollars to -10.04/-497 million US dollars to maintain the performance industry rating. According to the DCF model, maintain the target price of A/H/US at 184/HK$308 (33.6%/ 84.1%/82.6% upside).
risks
Risk of continued loss; risk of new drug development; risk of falling short of expectations in pricing and commercialization of products after launch.