The HPK1 inhibitor independently developed by the company first entered the clinical research stage, gradually moving from me-better to first-in-class. R&D ushered in a harvest period, with novel targets for early pipeline layout. Commercial cooperation is progressing steadily, and product pipelines are constantly being enriched. Abundant cash reserves guarantee the company's continuous investment in R&D.
The self-developed HPK1 inhibitor first entered the clinical research stage, gradually moving from me-better to first-in-class. On March 10, the company's phase 1 clinical trial of the hematopoietic stem cell kinase 1 (HPK1) inhibitor BGB-15025 completed the first patient administration, ranking among the first HPK1 inhibitors to enter the clinical research stage. HPK1 is a key negative feedback modulator of T cell receptor signaling. HPK1 inhibitors can effectively promote T cell activation. Preclinical studies have shown that they can enhance the antitumor activity of PD-1 inhibitors. The HPK1 inhibitor independently developed by the company represents an innovative cancer immunization program. It also shows that the company can not only develop me-better drugs represented by BTK inhibitors, but also has the ability to develop new drug candidates around the world such as HPK1, and innovative research and development capabilities are gradually deepening.
R&D ushered in a harvest period, with novel targets for early pipeline layout. R&D expenses in 2020 were $1.29 billion, or +39% year on year, achieving rapid growth. With strong R&D investment, the company's R&D is progressing smoothly. 1) Core tumor pipeline products have been approved for listing one after another. Zebutinib has been approved by the NMPA for the treatment of MCL (second-line and above) and CLL/SLL (second-line and above), and its marketing applications for new indications to treat WM patients have been accepted and included in priority review. In addition, zebutinib was approved by the FDA for the treatment of MCL (second-line and above) by the FDA in 2019 and received fast track certification for MZL patients. The marketing application for WM's new indications has been accepted by the FDA and approved for listing in Canada. Currently, more than 20 zebutinib related marketing applications have been submitted outside the US and China; tirelizumab (PD-1) domestically has been approved in addition to advanced or metastatic urethral epithelial carcinoma (third-line and above), in addition to the earliest approved Hodgkin lymphoma (third-line and above) Indications for non-small cell carcinoma, their Marketing applications for (first-line advanced) non-squamous non-small cell lung cancer, hepatocellular carcinoma (second-line and above), and non-small cell lung cancer (second- or third-line) were also accepted; the indications of pamipalil for advanced ovarian cancer, fallopian tube cancer, and primary peritoneal cancer are expected to be approved in China in 202H1, which is expected to become the company's third self-developed oncology product. 2) Early R&D pipeline layout Development projects for novel targets such as TIGIT, Bcl-2 (Chinese IND application accepted), TIM-3, OX40, Pi3Kα, and HPK1 are progressing smoothly. Among them, the first TIGIT monoclonal antibody owned by the company is in phase 1/2 clinical trials in China. Clinical results have confirmed its good anti-tumor effects in combination with PD-L1. The company has registered a phase III clinical trial of TIGIT monoclonal antibody combined with tirelizil and K drug for head-to-head treatment of NSCLC on the clinicaltrial website, which shows the company's strong confidence in the product, once successful, there is huge market space.
Commercial cooperation is progressing steadily, and product pipelines are constantly being enriched. The company continues to carry out commercial cooperation and introduced a variety of innovative drugs to enrich the product pipeline. 1) The listing application for the GD2 targeted monoclonal antibody dituximab introduced from EUSA Pharma in early 2020 was accepted by the CDE and included in priority review. Dituximab is the only targeted tumor immunotherapy approved by EMA for the treatment of high-risk neuroblastoma; 2) Lenalidomide plus rituximab authorized by Bristol-Myers and Rituximab was approved in China; 3) An agreement was reached with Strand Therapeutics in Asia (excluding Japan), Australia and New Zealand An agreement to develop and commercialize its innovative, multifunctional mRNA therapeutics for solid tumors; 4) reached an agreement with Boston Tumor Technologies and Therapeutics to develop and commercialize TNFR3 antagonist receptors in Asia (excluding Japan), Australia and New Zealand; 5) reached a partnership with AssemblyBioSciences to obtain exclusive development and commercialization rights for three products to treat hepatitis B infection. The company has broadened its R&D pipeline through commercial cooperation and is entering a new chapter in commercialization.
Abundant cash reserves guarantee the company's continuous investment in R&D. As of December 31, 2020, the company's cash, cash equivalents, restricted capital and short-term investments totaled $4.66 billion. In January 2021, the company also received $650 million in advance payments related to Novartis's cooperation and licensing agreements, and its cash reserves were abundant. Adequate cash reserves will ensure that the company continues to increase investment in R&D and enrich its product pipeline.
risk factors. Progress in drug research and development and marketing falls short of anticipated risks; health insurance negotiations have led to a risk of a sharp drop in product prices.
Profit forecasting and valuation. The company has been developing products and listing them one after another for many years, while opening up broad markets at home and abroad. The development of license in cooperative products is progressing steadily, and the company has entered a new chapter of commercialization. The company's early R&D pipeline lays out high-potential targets, and the company's R&D pipeline is enriched by incorporating new products through commercial cooperation. Although currently in a state of loss due to high R&D investment and the expansion of the commercialization team, it is expected that the company will experience a period of performance explosion as new products are launched one after another. The adjusted company's net profit forecast for 2020/2021/2022 was -1,606 million/-1,248 million/-980 million dollars (originally -1,668 billion/-1,165 million dollars/-1,123 million dollars). According to the DCF valuation method, we believe that the company's reasonable valuation is about US$38,392 million. Based on the USD/HKD exchange rate of 7.76, corresponding to the target price of Hong Kong stocks of HK$250.34, it maintains the “buy” rating.