Dongyao Pharmaceutical Co., Ltd. announced on February 2 that the monoclonal antibody product TAB014 for the treatment of wet age-related macular degeneration phase III clinical IND has been approved by FDA. We reiterate our buy rating and raise our target price to HK $11.8.
The clinical III IND of TAB014 was approved by FDA. TAB014 is an anti-VEGF monoclonal antibody for the treatment of wet (neovascular) age-related macular degeneration (wAMD), retinal vein occlusion (RVO), choroidal neovascularization (CNV) and other eye diseases. The IND application approved by Dongyao Pharmaceutical Company is based on the data of phase I clinical trials conducted by TAB014 in China, directly applying for phase III clinical trials, excluding phase II clinical trials, and is also the first overseas IND application and approved by the company. Currently competing for the drug in the U. S. market include razumab, abacil, and their potential bioanalogues. There are about 200,000 new cases in the United States each year, with an estimated 3 million severe cases in 2020. Chinese pharmaceuticals listed overseas are generally looking for partners, and we expect that TAB014 will also need to work with suitable overseas companies.
It is expected to be listed in China in 2024. The company has not disclosed overseas III clinical plans and launch dates. TAB014's domestic interest, License out, was given to Li's big pharmaceutical company. According to the prospectus filed by Zhaoke Ophthalmology Limited on the Hong Kong Stock Exchange, the phase I clinical trial of TAB014 was launched in June 2018, and the phase III trial is expected to start in the second quarter of 2021, to be completed in 2023, and NDA is expected to be submitted to the SFDA in 2024.
Reiterate the buy rating and raise the target price to HK $11.8. TAB014 is the company's first attempt to go out to sea, and we also see the trend of internationalization of Chinese innovative pharmaceutical companies, which contributes to the improvement of the company's valuation. We use rNPV's valuation method to improve the company's valuation to reflect the potential value of TAB014's overseas listing and to reflect the current downward interest rate environment. We value the company's rNPV at HK $7.1 billion, with a value of HK $11.80 per share.
Investment risk: drug research and development delay, clinical trial failure; TAB008 failed to enter the collection; collection price reduction exceeded expectations; drug sales did not meet expectations.