Company news

The company's recent situation

On November 12, the company announced pimicotinib (pimitinib) tenosynovial giant cell tumor (TGCT) key international phase III clinical trial data and long-term follow-up data from the phase Ib trial. We believe that pimicotinib has shown potentially best-in-class efficacy and good safety.

reviews

Pimicotinib has shown potentially best-in-class efficacy and good safety tolerability. The updated data from the key international phase III clinical trial showed that at week 25, the ORR of the pimicotinib group was 54.0% and the placebo group was 3.2% (p <0.0001). At the same time, there were significant statistically and clinically significant improvements at secondary endpoints related to the patient's important clinical outcomes, including stiffness and pain. Pimicotinib is well tolerated, and the safety characteristics are consistent with previously reported data.

Pimicotinib is also promoting clinical trials of CGVHD, and attention is being paid to the December ASH conference data readout. On November 8, the company announced that the phase II clinical data of pimicotinib 2L+ chronic graft versus host disease (cGVHD) will be presented orally at the American Society of Hematology (ASH) annual meeting from December 7 to 10, 2024. The preliminary disclosure summary shows that pimicotinib has 66.7% and 52.9% ORR for moderate and severe CGVHD, respectively, and is well tolerated.

It is recommended to pay attention to the subsequent exercise of Merck's exclusive overseas options. According to the company's announcement, in December 2023, the company granted pimicotinib's commercial rights in Greater China and priority options for global equity options with a total down payment of up to 0.6055 billion US dollars, exercise and milestone payments, and double-digit sales shares.

On 1H24, Merck's down payment of 70 million dollars was recorded, making the company profitable for the first time. We believe that Pimicotinib's competitive TGCT and CGVHD data is expected to become an important reference for Merck's exercise of overseas options. If it is exercised, it may bring considerable milestone payments to Hewlett Reputation in 2025 and enhance the company's performance.

Profit forecasting and valuation

Considering the company's 2024 milestone revenue situation and fee control situation, we raised the 2024 net profit forecast from a loss of about RMB 50.3 million to a profit of RMB 2.13 million, and introduced a net profit forecast of around RMB 27 million for 2025. According to DCF's valuation, we kept the company's outperforming industry rating and target price of HK$6.76 unchanged, with 43.8% upside compared to the current stock price.

risks

Merck's exercise of power fell short of expectations, data readings fell short of expectations, and research and development failed.