Core views:

Incident: HSK7653 (coglitin tablets, trade name: Beichangping) was approved for marketing in China.

According to the official website of the State Drug Administration, coglitin tablets, a Class 1 innovative drug declared by Hisco, were recently approved for marketing. They are suitable for improving blood sugar control in adult type 2 diabetics. The drug is a DPP4 inhibitor and provides a new treatment option for adult type 2 diabetics.

Biweekly oral administration of hypoglycemic preparations provides better compliance. Currently, daily DPP4 inhibitors commonly used clinically often have problems such as missed doses or overdoses, leading to poor patient compliance. According to information published on Hisecco's official account “Hisilicon Research”, through structural innovation (introduction of trifluoromethyl at unconventional chemical sites), HSK7653 has an ultra-long half-life of more than 100 hours, thus ensuring a long dosing interval once every two weeks. Currently, most DPP4 inhibitors on the market are single-day formulations, and the longest is a single-week formulation. Compared to these drugs that have already been marketed, the number of doses of HSK7653 has been reduced, and there is good medication adherence.

Phase III clinical data are impressive, and safety and efficacy are excellent. HSK7653 has been conducted in China in two phase III studies (monotherapy and metformin combination), and the results were presented at the ADA and EASD conferences, respectively. According to the official websites of the two conferences, a total of 475 patients enrolled in the single-drug trial were evenly distributed to HSK7653 10mg, 25mg, and placebo groups. HbA1c in the 24th Wednesday group changed by -0.96%, -0.92%, and -0.33%, respectively, from the baseline. A total of 464 patients were equally distributed to the HSK7653 (once every two weeks) 10 mg, 25 mg, and ligliptin (once daily) 5 mg group. HbA1c in the 24th Wednesday group changed -0.96%, -0.99%, and -1.07% from baseline, respectively. HSK7653 was not inferior to daily oral ligliptin.

Profit forecasting and investment advice. We are optimistic about the company's proven ability to develop and commercialize innovative drugs. EPS is expected to be 0.39, 0.59, and 0.91 yuan/share in 24-26, respectively. The reasonable value of the company was obtained through the DCF Act at 39.71 yuan/share, maintaining a “buy” rating.

Risk warning. Drug review risks, cost control policy promotion risks, R&D progress falls short of expectations.