Key points of investment:

The structural misalignment of domestic self-defense drugs is being repaired, and attention is being paid to the large space generated by long-term demand. Autoimmune diseases usually do not directly cause death, but they are also difficult to cure. Patients require long-term or even lifelong medication, which has spawned a steady increase in market demand for self-defense drugs. The global self-immunization drug market is US$132.3 billion in 2022, the domestic self-immunization market is US$2.9 billion, and is expected to reach US$19.9 billion by 2030. Self-exempt medicines are included in medical insurance to improve patient accessibility and achieve “price for quantity”. At the same time, the release of market potential is driving the rapid development of domestic drug research and development supply, and the original structural misalignment is being repaired.

Pipeline R&D is progressing smoothly and gains are imminent, improving the product matrix and deepening the self-defense advantage 608: potential drugs targeting IL-17A. The overall number of people with psoriasis in China has remained stable. According to Sullivan's estimates, it will reach US$3.25 billion in 2025 and further increase to US$9.94 billion in 2030. The phase II clinical efficacy of 608 is accurate. The company expects to submit an NDA for listing in 2024 and is in the second tier of domestic production.

611: The first tier of domestic IL-4R, with remarkable curative effect. IL-4Rα is the main research target for AD treatment. Globally, the only IL-4Rα target drug marketed is priumab. The efficacy of 611 at the same dose tends to be higher than that of priumab. 611 has entered phase III of the same targeted drugs as Connoya and Zhixiang Jintai. The company expects to file an NDA in 2026, leading the way.

610: Asthma medications with BIC potential. China's monoclonal antibody drug market for asthma will develop rapidly, reaching about 2.9 billion/8.6 billion yuan by 2023/2030, respectively. 610 showed significant improvement in pulmonary function in patients with asthma. Phase II clinical trials showed better efficacy than the same target products Mepolizumab and Reslizumab. The company expects to file an NDA in 2027.

613: Acute gout arthritis patients have a large base and a good competitive pattern. IL-1beta targeted drugs for treating gout arthritis have been recommended by many national guidelines, yet there are no monoclonal antibodies against IL-1beta on the market in China, and there are very many unmet needs. On April 11, the marketing application for kinazumab was accepted. 613 companies expect to file an NDA in 25 years, and still have a strong first-mover advantage.

The established antibody company focused on the self-immunity circuit, launched the products+the research pipeline and built a self-immunity matrix company to divest the tumor assets, awarded the anti-tumor project to Shenyang Sansheng, and focused on the self-immunity circuit. The company's core production team is stable, experienced in commercialization, and mature sales capabilities. In 2023, the company's revenue was 1.01 billion yuan, 22.8% YoY. Yisaipu's revenue declined due to price reduction factors. The company's revenue is expected to grow steadily with the volume of the listing of Guanippe and Ceptin.

Profit forecasting and investment advice

We expect the company's 24-26 revenue of 12.7/14.0/1.6 billion, a year-on-year growth rate of 25%/10%/14%, and net profit to mother of 2.5/2.4/31 billion yuan. Relative valuation was carried out using the market capitalization/cumulative R&D investment method. The company's market value/cumulative R&D investment was 12 times lower than the average of comparable companies, 23 times lower than the average of comparable companies, and the first coverage gave a “buy” rating.

Risk warning

Innovative drug research and development faces the risk of uncertainty, increased R&D investment, risk of sales growth of core products falling short of expectations, risk of uncertain revenue growth caused by collection, and competitive risks in the innovative drug market