Incidents:
Recently, the company released the main financial data for the semi-year 2024: total revenue of 2024H1 was 1.68 billion US dollars, up 61% year on year, net profit was -0.372 billion US dollars, down 49% year on year; total revenue of 2024Q2 was 0.929 billion US dollars, up 56% year on year, and net profit was -0.12 billion US dollars, down 68% year on year. The adjusted operating profit for 2024Q2 reached 48.46 million US dollars, which reversed losses in a single quarter and exceeded market expectations.
The R&D and sales expense ratio fell sharply, and operating efficiency improved, driving the first adjusted profit in the second quarter to 2024 Q2 R&D expenses of 0.454 billion US dollars. The R&D expenses rate was 49%, a decrease of 22 pt from the previous year, and a decrease of 12 pt from the previous month. 2024 Q2 sales and management expenses were $0.444 billion, and the corresponding expense ratio was 48%, a year-on-year decrease of 19 pt and a month-on-month decrease of 9 pt. Reduce costs and increase efficiency, and further improve the company's operating efficiency. The adjusted 2024 Q2 R&D expenses were 0.383 billion US dollars, and the R&D expenditure ratio was 41%, a year-on-year decrease of 20 pt; after the adjustment, 2024 Q2 sales and management expenses were 0.364 billion US dollars, and the corresponding cost ratio was 39%, a decrease of 17 pt from the previous year. Compared to GAAP metrics, the adjusted indicator reduced equity incentive costs of $55.41 million and $75.29 million in depreciation expenses and $16.55 million and $4.52 million in depreciation expenses from R&D expenses and sales and administrative expenses, respectively.
Zebutinib, the core product of 2024Q2, continued to rapidly release 2024 H1 zebutinib's global sales revenue of 1.126 billion US dollars, up 61% year on year; 2024Q2 revenue was 0.637 billion US dollars, up 107% year on year and 30% month on month. 2024Q2, by region, has a strong growth rate, with revenue of 0.479 billion US dollars, up 114% year on year and 36% month on month, mainly benefiting from the expansion of its use in CLL indications; revenue in Europe was 0.081 billion US dollars, up 209 percent year on year, up 21% month on month, mainly due to an increase in its market share in all major European markets. Furthermore, in May 2024, zebutinib was approved for third-line FL treatment in China, which is its sixth indication in China.
Sales of tirelizumab continued to grow in the Chinese market, continuing to expand the global market 2024H1 Total revenue of tirelizumab was 0.303 billion US dollars, up 15% year on year; Q2 was 0.158 billion US dollars, up 6% year on year and 9% month on month. As of July 2024, tirelizumab has been approved for a total of 4 indications in the European Union, including NSCLC and esophageal squamous cell carcinoma. In 2024, Q2 tirelizumab was newly approved for gastric cancer and small cell lung cancer in China. Currently, a total of 11 items have been included in the national medical insurance catalogue. Furthermore, in the US, tirelizumab was approved for marketing in March 2024, and its first-line treatment for esophageal squamous cell carcinoma is under review; it submitted its marketing application for first-line treatment of gastric cancer to the FDA in February 2024.
Early data on the core varieties Sonrotoclax and BGB-16673 are excellent, and the first phase III clinical trial of the BCL2 inhibitor Sonrotoclax in combination with zebutinib to treat TN CLL patients has been completed. The Phase III study on R/R CLL and R/R MCL is expected to enroll the first subjects in the fourth quarter of 2024 or the first quarter of 2025.
BGB-16673 (BTK CDAC) has entered phase I/II clinical phase for B-cell tumor indications such as FL, MZL, WM, and CLL/SLL, and phase I clinical trial results announced in 2024 EHA showed tolerable safety and anti-tumor activity. Its Phase III study on R/R CLL/SLL is expected to enroll the first participants in the fourth quarter of 2024 or the first quarter of 2025.
Profit Forecasts and Investment Ratings
Considering that the company's revenue growth in the first half of the year exceeded expectations, we raised our revenue expectations. We raised our 2024-2026 revenue of 22.652, 28.963, and 34.049 billion yuan to 25.699, 32.587, and 39.287 billion yuan. The estimated net profit for 2024-2026 is -3.217, -0.303, and 1.197 billion yuan.
Maintain a “buy” rating.
Risk warning: Clinical trial progress falls short of expectations, drug efficacy under development falls short of expectations, sales volume of marketed products falls short of expectations