Incidents:
Osecon released its 2020 performance report: In 2020, the company achieved revenue of 3.781 billion yuan, a year-on-year decrease of 16.33%; Guimu's net profit was 727 million yuan, a decrease of 6.87% year-on-year, and performance slightly exceeded expectations.
Askgene, a subsidiary of Osecon, and Xilio Therapeutics recently signed a “Patent Licensing Agreement”. Askgene has granted Xilio some patents for its self-research platform Smartkine, allowing it to use related technology patents in specific target development. Xilio paid Askgene an initial payment of 6 million US dollars for the patent license; a separate milestone payment will be made after overseas listing, and will also pay a sales commission from its annual net sales in the proportion agreed upon in the agreement. Askgene obtained the right to develop, manufacture and commercialize the product for oncology treatment indications in the Asia Pacific region (excluding Japan).
Key points of investment:
The 2020 results slightly exceeded expectations, mainly due to increased profits from patent grants. The company achieved net profit of 727 million yuan to the mother in 2020, a decrease of 6.87% over the previous year, slightly exceeding expectations. The main thing is that the US subsidiary of Askgene obtained 6 million US dollars of patent grants. The profit after deducting this portion of the payment (about 690 million) was in line with our previous expectations. On a quarterly basis, Q4 achieved net profit (after deducting patent grants) of about 210 million yuan in 2020, up 8.24% year on year, down 17.5% month on month. Q4 profit growth rate improved further, mainly due to the easing of the epidemic in the second half of the year, marked improvements in hospital-side medication use, and effective improvements on the profit side brought about by the company's active adjustment of the cost structure under collection pressure. We are optimistic that in the future, the company will maintain steady profit growth through multi-product line expansion under the normalization of collection. Combined with innovative drug platforms, the PPI leader will take off for the second time.
The licensing of Askgene highlights the value of the bioinnovation platform. Askgene is an American subsidiary established in 2012 that focuses on the development of bioinnovative drugs. Smartkine is a platform technology developed by Askgene with global intellectual property rights that can be applied to protein engineering transformation of various cytokines and the development of highly selective tumor immunotherapy. The design concept of Smartkine technology is to add a “sword sheath” to the cytokine, and the resulting fusion protein is connected to a mask, so that the cytokine is not activated after entering the human body and is not rapidly degraded by the system. After reaching the tumor microenvironment, it is activated under the action of specific protease to kill tumor cells. On the basis of achieving drug efficacy, the technology can extend the half-life and reduce toxic side effects, and expand the prospects for clinical use. This collaboration with Xilio will use Askgene's Smartkine technology patent, which will speed up the company's R&D pipeline layout in the field of tumor immunization, promote the company's own R&D platform to achieve product transformation. In particular, the cooperation model of down payment+milestone+sales commission highlights the value of Askgene's platform, and at the same time brings the company the right to develop this product in the Asia-Pacific region.
PPI leaders continue to expand multiple product lines and enter a period of accelerated growth. As a leading PPI inhibitor, the company continues to consolidate its PPI product line. Injectable dexabeprazole sodium (first in China) and injectable levapantoprazole sodium (second in China) are expected to be approved for listing this year. Injectable dexlansoprazole sodium has been notified of acceptance. Furthermore, the company is gradually expanding treatment fields such as digestion, infections, tumors, chronic diseases, etc., and injectable temozolomide has recently been approved. Posaconazole enteric tablets are expected to be approved in the near future, and injectable posaconazole sodium and polymyxin E for injection are also expected to be approved in the first half of the year Listed, anti-tumor cabotinib has been accepted. Additionally, Pemex, which has been marketed for the past two years Trexedinol (tumors), saxagliptin tablets (diabetes), injectable tigacycline (anti-infection), and injectable parecicib sodium (narcotic analgesia) have already begun to contribute to sales. We expect that the revenue share of the company's new product lines for infections, tumors, and chronic diseases will increase to about 30% in 2020. In terms of external cooperation, the company has introduced a new generation of oral iron product, maltol iron capsules for the treatment of iron deficiency in adults, and can be declared for listing after completing clinical bridging trials. Furthermore, the company has submitted the company for the treatment of thalassemia by completing clinical bridging trials. Application for listing of decentralized films, to the public Invest in Yangzhou Sanyao to further expand new varieties of oral formulations and production capacity reserves.
Combining innovation at the beginning and end, improving the research system drives us into a full harvest period of transformation and upgrading. In recent years, the company's research institutes have, on the one hand, improved the leading innovation system, and on the other hand, strengthened the integration of API formulations and the consistent evaluation of generic drug quality. The innovative drug pipeline currently disclosed by Osecon has 3 drugs under development. The third-generation EGFR-TKI drug ASKI, ASK120067, is currently in clinical IIb stage and is expected to complete patient enrollment in the near future. It is expected that clinical trials will be completed this year. Assuming that ASK120067 is the 4th or 5th company listed in China, it is expected that the sales peak will reach about 480 million yuan in 2026 after marketing. Furthermore, phase 1 clinical trials of Claudin18.2, the anti-tumor drug ASKB589, are progressing in an orderly manner. We expect future average Every year, 3-4 innovative drugs will enter the clinic. This year is expected to be the first year in which the company's research institute's innovative drug pipeline achievements have been realized.
Profit forecast and investment rating: In the short term, as a leading domestic proton pump inhibitor company, the company's new product line expands into a release period, and revenue and profit growth are expected to enter a period of continuous improvement. In the medium to long term, we are firmly optimistic about the comprehensive innovation and upgrading driven by the company's perfect research system. This year is expected to be the first year of high growth in the company's performance and fulfillment of innovative drug results. Therefore, we expect the company's EPS in 2020-2022 to be 0.78, 0.86, 1.00 yuan respectively. The corresponding stock price PE is 18.38, 16.69, 14.35 times, and maintained, respectively. Buy ratings.
Risk warning: Innovative drugs fell short of expectations, collection pressure was greater than expected, other risks.
