The company's recent situation

On October 31, our partner Takeda announced FY2024 Q2 (3Q24) financial results. Fruzaqla (fruquintinib) 3Q24 sales of 11.1 billion yen (approximately 0.072 billion US dollars1) were in line with our expectations. On November 6, the company announced that the ESLIM-01 data for the solepinib phase III study will be updated at the 2024 American Society of Hematology (ASH) Annual Meeting.

reviews

Fruquintinib's market share in the US continues to rise, and a new commercialization map is about to begin in Europe and Japan. According to Takeda's financial report, 1-3Q24 Fruzaqla's sales volume was 7.8 billion, 11.9 billion yen, and 11.1 billion yen, respectively. As of July 2024, Fruzaqla's market share of 4L+ mCRC in the US reached 29% and became one of the most mainstream treatments, with a market share of 10% in 3L mCRC. Furthermore, according to company announcements, Fruzaqla has been approved for listing in Europe and Japan in June and September 2024, respectively, and Takeda is actively preparing for commercialization. We believe that Fruzaqla's MCRC space in Europe and Japan is equally impressive, and it is expected that it will continue to contribute a good share of revenue to the company in the future.

Solepinib phase III data updated, ITP response data is impressive. According to the company announcement, in the domestic phase III clinical trial ESLIM-01 of solepinib to treat ITP, 81% of 179 patients had achieved overall response as of January 31, 2024. Among them, the sustained response rate was 51.4%, the long-term sustained response rate was 59.8%, and the platelet count was ≥50×10? The median cumulative duration of /L was 38.9 weeks and was well tolerated; no new safety signals were found. Previously, the NDA submitted domestically for solepinib for 2L ITP indications in January has been accepted. We look forward to its approval for domestic marketing in the near future, bringing new treatment options to ITP patients.

The SAVANNAH trial achieved positive results, and we are watching the progress of the US declaration of sevolitinib. On October 16, the company announced that the phase II clinical study SAVANNAH achieved positive results, and MET+ NSCLC, which progressed after treatment with ositinib treated with ositinib, obtained a high and clinically significant remission rate. The company is expected to read out the data in the near future and plans to submit a listing application in the US at the end of 2024. Continued attention is recommended.

Profit forecasting and valuation

We maintain the company's 2024/2025 EPS forecast of -0.12 yuan/0.01 yuan unchanged. We maintain our outperforming industry rating. According to the DCF model, the target price remains unchanged at HK$38.25, with 31.5% upside compared to the current stock price.

risks

Commercialization at home and abroad fell short of expectations, R&D failed, and expenditure exceeded expectations.