We believe that the company's core products are entering a period of rapid implementation. The company is deeply involved in the field of self-defense and has deployed many innovative products with multiple targets, such as IL-17A, IL-4R, and TSLP. GR1801 and GR1803 data stand out in the dual-antibody platform, verifying the value of the dual-antibody platform. We are optimistic that the company's large varieties and large indications will enter the commercialization stage one after another starting in 2024, covering and giving a “buy” rating for the first time.

Celizumab (GR1501): Excellent data. The first NDA in China, the IL-17 monoclonal antibody Celikimab is the first domestically produced NDA anti-IL-17 monoclonal antibody independently developed by the company. Its indications for severe plaque psoriasis were approved for NDA in March 2023, and for radiology-positive axial spondyloarthritis, NDA accepted in January 2024. In severe plaque psoriasis, the absolute efficacy data of celizumab compared with the same target scoquiumab and exizizumab is excellent. The progress is the first tier of products under development in China. It is expected to be the first to be approved for marketing in 24Q3, and future sales can be expected.

GR1802: The IL-4R target pattern is good, and the target application space is broad. GR1802 is a monoclonal antibody targeting the IL-4R target. It entered phase III clinical treatment for moderate to severe atopic dermatitis in adults in December 2023. GR1802 comprehensively lays out indications such as asthma, chronic sinusitis with nasal polyps, chronic allergic rhinitis, and spontaneous urticaria (all have entered Phase II clinical trials), and the overall progress is ahead. The overall competitive pattern of the domestic IL-4R target pipeline is good. Only dupliumab has been approved for marketing. The market space for multiple indications is broad, and GR1802 has great potential for development.

GR1801: GR1801, the only dual antibody for passive immunity against rabies in the world to enter clinical trials, is a rabies virus double epitope double antibody, which can provide immediate immune protection before active immunity of the rabies vaccine is fully effective. There are about 16 million people exposed to rabies grade III in China every year. Of these, only about 15% use passive immunization agents, which is a large gap. GR1801 has a risk of infection without bloodborne diseases and is safer. We expect it to submit an NDA in the second half of 2024, and is expected to be approved for domestic marketing by the end of 2025.

Monoclonal & Dual Antibody Discovery Platform: Highly efficient pipeline output power driven by innovation The company has established six major monoclonal & double antibody technology platforms based on a novel bacteriophage presentation antibody library, which can shorten the discovery cycle of novel antibody drug candidate molecules to 6-9 months, and has the advantages of fast project development speed and high efficiency. In the field of oncology, GR1803 independently developed by the company is a recombinant humanized anti-BCMA×CD3 bispecific antibody. It has outstanding advantages in phase I clinical data for relapsed/refractory multiple myeloma, and we look forward to more sample verification. In addition, the world's first clinically approved TSLP dual antibody and the first CD3 x CD123 dual antibody in China have demonstrated innovative incubation capabilities.

Profit forecasting and valuation

The current value of the core product DCF is 16.432 billion yuan: According to the DCF valuation model, we calculate that the reasonable valuation of the company's core products such as GR1501, GR1802, and GR1801 is estimated to be 16.432 billion yuan. The sensitivity test results show a reasonable market value range of 15.3-17.7 billion yuan. The corresponding target price is 41.86-48.22 yuan/share. We are optimistic about commercialization prospects under the leading/superior competitive pattern of the company's core product echelon, and covered and given a “buy” rating for the first time.

Risk warning

Risk of clinical failure, risk of sales falling short of expectations, policy risk, calculation risk.