Incident: On September 18, the company announced that the results of the prospective, randomized, double-blind, placebo-controlled international multi-center phase III clinical trial for the treatment of high-grade cervical squamous intraepithelial lesion (HSIL) were selected for the 2024 International Photodynamic and Photodiagnostic Conference, and published the curative efficacy data of this study on reducing the histopathological grade of cervical precancerous lesions in the form of an oral report at the conference.

The completed statistical analysis results showed that the study had reached the main efficacy end point and was safe. The analysis results showed that 402 eligible subjects were randomized and enrolled in this study between November 2020 and July 2022. As the main end point of efficacy, the response rate of the APL-1702 group increased by 89.4% (p = 0.0001) compared to the placebo control group, showing significant efficacy. Furthermore, the study also found that 6 months after initial treatment, the APL-1702 group had a significantly higher pathological outcome rate than the placebo control group (p < 0.01). Analysis results divided into subgroups according to HPV status showed that among HPV negative, HPV16 positive, and HPV18/other positive subgroups, the histopathological remission rate of the APL-1702 group was superior to that of the placebo control group.

APL-1702 submitted an NDA and actively sought opportunities to go overseas. The marketing application for APL-1702 was accepted by the China Drug Administration in May 2024, and the company is actively promoting its marketing review and approval process. At the same time, based on the excellent results of the APL-1702 international multi-center phase III study and potentially huge unmet clinical needs, the company has initiated the development of HPV virus clearance indications and will actively promote the following tasks: the company plans to submit a pre-listing communication application to EMA in the fourth quarter of 2024; at the same time, the company is also actively seeking opportunities for APL-1702 to cooperate in developing overseas markets.

Investment advice: The company is a global innovative pharmaceutical company focusing on urogenital tumors and other major diseases. We expect the company to achieve revenue of 0.2/0.36/0.61 billion yuan in 2024-2026, maintaining an “gain” rating.

Risk warning: risk of changes in industry policies, risk of new drug development, risk of uncertain marketing of products under development, risk of poor progress in internationalization, risk of market competition, etc.