According to the Futu Securities App, GTJA has released a research report maintaining a "shareholding" rating on Kezai Pharmaceuticals-B (02171), with revenue projections of 0.215/0.308/0.506 billion yuan for 2024-2026. The company recorded revenue of 6.34 million yuan and a net loss of 0.352 billion yuan in H1 2024 (a decrease in net loss of 0.052 billion yuan compared to the previous year); after adjustment, the net loss was 0.342 billion yuan (a decrease in net loss of 0.044 billion yuan compared to the previous year). This was due to a reduction in employee salaries through stock-based compensation. The total cash and cash equivalents, and fixed deposits amounted to 1.653 billion yuan, with a minimal change from H1 2023 (1.684 billion yuan). It is expected that the sales performance of Saikaize will be good, with a projected total annual sales revenue of 0.1 billion yuan (equivalent to 87 units), and the actual number of orders is more than 100 units. CT041, a treatment for gastric cancer, is expected to submit an NDA in the 25HI, and the company is optimistic about its long-term development.

GTJA's main opinions include:

Huadong Medicine is helping drive the commercialization of Saikaize, and it is projected that the total annual sales revenue of the terminal market will reach 0.1 billion yuan in 2024.

On March 1, 2024, Saikaize (Zewo Kelun Sai Injection, CT053) was approved for listing for the treatment of r/rMM >3L. Huadong Medicine has helped drive its commercialization, and the company has received a down payment of 0.2 billion yuan and partial milestone payments. It is expected to recognize a portion of the revenue in the 2024 financial statements. As of July 31, 2024, Saikaize has been included in the healthcare and commercial insurance systems in nearly 20 provinces or cities, and has been certified and filed by more than 100 medical institutions in 19 provinces and cities nationwide. Huadong Medicine has received a total of 52 orders, with 4/34 orders received in Q1/Q2, and 14 orders received in July. The number of orders continues to grow, and it is expected to exceed 100 orders for the year. However, due to the production cycle of CART, there may be discrepancies between the number of orders received from Huadong Medicine and the number of deliveries from the factory. GTJA expects that the commercialization orders of Saikaize in 2024 will correspond to a total sales revenue of 0.1 billion yuan, with 87 orders (1.15 million/person).

The R&D pipeline is progressing smoothly, and CT041 for gastric cancer is expected to submit an NDA in H1 2025, while CT071 is expected to provide updated data in H2 2024.

① CT041 for the treatment of ≥3L gastric cancer has completed Phase II enrollment and is expected to submit an NDA in China in H1 2025. In April 2023, it was approved for IND as an adjuvant treatment for postoperative CLDN18.2+ pancreatic cancer patients. ② CT071 (GPRC5D) uses the CARcelerate platform to shorten production time to around 30 hours, compared to the traditional production process, which allows for the manufacturing of younger and more efficient CAR-T cells. CT071 has shown excellent efficacy and good safety for the treatment of r/r MM: 102 patients with a median treatment line of 4 received treatment, and as of October 25, 2023, the ORR was 92.2%. The median follow-up time was 20.3 months. The DOR, PFS, and OS are not yet mature, but overall safety is good, with 6.9% of patients experiencing CRS of grade 3 or higher. Updated data on CT071 is expected to be disclosed in H2 2024, and the company's innovative layout is highly regarded.

Risk Warning: Uncertainty in product launch and uncertainty in new drug development.