Zaiding Pharmaceutical announced financial results for the second quarter of 2024. Net product revenue for the second quarter of 2024 was $0.1001 billion, up 45% year on year; up 47% year on year at fixed exchange rate (CER). R&D expenditure for Q2 2024 was US$61.6 million (US$76.7 million for the same period in 2023). SG&A was $79.7 million ($67.9 million in the same period in 2023). The increase was mainly due to the increase in sales expenses and personnel to support Wei Weijia. The net loss for Q2 2024 was $80.3 million (net loss for the same period last year was $0.1209 billion), which significantly reduced losses. As of June 30, 2024, cash reserves were $0.73 billion, with revenue split, and growth was mainly driven by new products: 1) Zele: Q2 product revenue in 2024 was 45 million US dollars, up 5% year on year; 2) Wei Weijia: Wei Weijia was listed in September 2023 to treat GMG, and Q2 revenue in 2024 was 23.2 million US dollars. The strong growth was mainly due to positive feedback from doctors and patients from doctors and patients since 2024 Patient accessibility increased as Wei Weijia entered the hospital. 3) New Zealand: Q2 revenue in 2024 was $12.3 million, up 165% year over year.

The volume of the blockbuster FcRn antagonist Wei Weijia exceeded expectations and raised the annual sales guide to 80 million US dollars.

1) Wei Weijia was launched in September 2023 to treat generalized myasthenia gravis (gMG), and participated in health insurance negotiations that year. He successfully entered medical insurance in January 2024, earned 10 million US dollars in 2023, and received treatment for nearly 1,000 patients. Q1 revenue in 2024 was 13.2 million US dollars, with an estimated 2,700 new patients; sales for the second quarter of 2024 were 23.2 million US dollars, with about 3,300 new patients; Wei Weijia's annual revenue guide was raised to more than 80 million US dollars.

2) New dosage forms have been approved, and multiple indications are progressing rapidly. In July 2024, the NMPA approved the biological product marketing license application (BLA) for Weiliqa (egamod subcutaneous dosage form); in May 2024, the NMPA accepted Igamod subcutaneous injection of SBLA for the treatment of chronic inflammatory demyelinating polyradiculoneuropathy (CIDP) and included it in priority review. In June 2024, argenx announced that the FDA approved the subcutaneous injection of ergamod for this indication.

3) Zaiding will join the Greater China Thyroid Eye Disease (TED) registration study in Q4 2024; argenx will publish the main data from the 2/3 ALKIVIA study in Q4 2024. The study evaluates the efficacy of agamod for immune-mediated necrotic myopathy (IMNM), anti-synthase syndrome (ASyS), and dermatomyositis (DM)). Zaiding Pharmaceuticals will join the Phase 3 study portion of this study in Q4 2024.

A number of new products have been launched or put into production, and the company's development has entered a new stage.

SUL-DUR (SUL-DUR): In May 2024, the NMPA approved Dingyule's new drug marketing application to treat hospital-acquired bacterial pneumonia (HABP) and ventilator-associated bacterial pneumonia (VABP) caused by sensitive isolates of Acinetobacter baumann-calcium acetate complex in adult patients.

Bemarituzumab (FGFR2b): In June, patient recruitment for the global Phase 3 study FORTITUDE-101 with Bemarituzumab combined chemotherapy for first-line treatment of gastric cancer was completed. The global phase 3 clinical study FORTITUDE-102 is recruiting patients in Greater China;

karXT (M1/M4 muscarinic acetylcholine receptor agonist): patients enrolled in the schizophrenia indication bridging study were completed this year and joined the Alzheimer's Disease Global Phase 3 study in the middle of the year.

Four registration application plans were submitted: Tumor Electric Field Therapy Q4 Submission of marketing licensing applications (MAA) for second-line NSCLC and above for disease progression during or after platinum-containing chemotherapy. Tisotumab Vedotin (tissue factor ADC) presents BLA for recurrent or metastatic cervical cancer. Reputinib (ROS1/TRK):

In May 2024, the NMPA approved its marketing for the treatment of ROS1-positive, locally advanced or metastatic non-small cell lung cancer adult patients. It plans to submit a supplementary new drug marketing application (SNDA) for NTRK positive solid tumors; KarxT submits an NDA for schizophrenia.

The company's three global equity products, 1) the ZL-1310 (DLL3 ADC) global multi-center phase 1 study is ongoing, and it is expected that dose escalation data for the global phase 1 study for patients with relapsed and refractory second-line SCLC and above will be announced at the end of 2024 or early 2025; 2) ZL-1218 (CCR8) global multicenter phase 1 continued enrollment, which will be announced at the ESMO annual meeting in September; 3) ZL-1102 (IL-17A), In May 2024, a global Phase 2 study conducted the first patient administration to evaluate the efficacy and safety of treatment for chronic plaque psoriasis (CPP).

Profit forecast. As new products are approved and released after entering medical insurance, we expect the company's 24-26 sales revenue to be 0.408, 0.636, and 0.98 billion US dollars, with growth rates of 52.9%, 56%, and 54%; maintaining the “buy” rating

Risk warning: clinical development risk, risk of deteriorating competitive landscape, risk of sales falling short of expectations, policy risks, etc.