Results for the first half of 2024:2024H1, the company achieved operating income of 1.025 billion yuan, compared to 3.677 billion yuan in the same period last year, mainly due to a sharp reduction in license fee revenue (down from 2.919 billion yuan in 2023H1 to 0.08 billion yuan in 2024H1); R&D expenses were 0.594 billion yuan, up 3.3% year on year, accounting for 58% of revenue; net profit of -0.249 billion yuan in the same period last year 2.49 billion yuan.
Dual-antibody revenue was in line with expectations, and AK112 was approved to contribute new momentum: product revenue of 0.94 billion yuan in the first half of 2024, an increase of 24% year over year. Among them, Cardonil (PD-1/CTLA-4) revenue was 0.706 billion yuan, an increase of 16.5% year on year; Evosi (PD-1/VEGF) revenue was 0.103 billion yuan. In June 2024, the company signed a supplementary licensing agreement with SUMMIT to confirm license fee revenue of approximately RMB 0.08 billion during the reporting period. We believe AK112 will provide the company with new growth momentum, which is expected to expand significantly next year.
Focus on the oncology immunization circuit, and the multi-product matrix broadens market boundaries: As of June 30, 2024, the company had more than 50 innovative projects under development, 22 of which are in clinical trials and commercialization stages, 7 of which are potential FIC/BIC bispecific antibodies. The pipeline covers various fields such as oncology, autoimmune and metabolic diseases:
1) AK104: In January 2024, first-line treatment of G/GEJ adenocarcinoma with cardonil was accepted; in April 2024, first-line treatment of cervical cancer SnDA with or without chemotherapy with bevacizumab was accepted. In July 2024, this phase III mid-phase analysis reached the main OS endpoint, and positive results were obtained.
2) AK112: On May 24, 2024, the advanced EGFR mutation nsq-nsclc of EGFR-TKI was approved for marketing by Evosi in combination with chemotherapy; at the end of May 2024, the phase III clinical trial of evosil monotherapy versus Pabolizil monotherapy for first-line treatment of NSCLC with positive PD-L1 expression reached the main research endpoint of PFS, and successfully submitted SNDA for this indication to CDE in July 2024.
3) In the field of metabolic immunity: The NDA for inucimab (AK102, PCSK9) and iroximab (AK101, IL-12/IL-23) for treating hypercholesterolemia is in the review stage; phase III clinical trials of gumocimab (AK111, IL-17) for psoriasis have reached an end. It is planned to submit an NDA in early 2025, and phase III clinical enrollment for ankylosing spondylitis; mandoximab (AK120, IL-4Rα) for atopic dermatitis In clinical enrollment.
Internationalization is progressing smoothly, highlighting the global value of AK112's cornerstone drugs: the company's products, AK112, AK117, etc., continue to promote many overseas clinical studies, and signed supplementary agreements with the original partner SUMMIT:
1) Partner SUMMIT is actively promoting the global multi-center phase III clinical trial of NSQ-nsclc in combination with chemotherapy to treat EGFR-TKI resistance, and enrollment in the global multi-center phase III clinical trial (Harmoni-3) for first-line treatment of SQ-nsCLC with evossi combined chemotherapy compared with Pabolizil combined chemotherapy.
2) On June 3, 2024, the company signed a supplementary license agreement with SUMMIT. SUMMIT will obtain additional exclusive rights for the development and commercialization of Iwasi in related markets such as China, America, South America, the Middle East and Africa. This cooperation will greatly accelerate clinical development, regulatory registration and commercialization of Ivorsi in various regions around the world.
Profit forecast: The company's new pipeline is gradually approved, and revenue will usher in a period of rapid growth. The company's revenue is expected to be 2.214, 3.88, 6.347 billion yuan (growth rate -51%/75%/64%), and net profit of -0.424, 0.307, and 1.508 billion yuan; maintaining a “buy” rating.
Risk warning: risk of sales falling short of expectations, risk of clinical development failure, increased risk of competition, etc.