The readings of this report are as follows:
The release rate of the core drugs zabutinib and tirelizu is in line with expectations, research and development is progressing smoothly, new products are expected to continue to land, there is plenty of cash on hand, the business tends to be sound, and the overweight rating is maintained.
Summary:
Maintain the "overweight" rating. Product revenue in the first quarter of 2021 was 106 million US dollars, an increase of 104 percent over the same period last year. The net profit per quarter was 67 million US dollars, a year-on-year reversal of losses. Cash and equivalents were $4.8 billion at the end of the reporting period, an increase of $160 million over the same period last year. As expected. Revenue forecasts for 2021-2023 are maintained at $12.76,12.04 and $1.642 billion. According to the absolute valuation of DCF, the target price is maintained at HK $227.0 and the overweight rating is maintained.
Rapid expansion of core products. Tirelizumab (PD-1), zebutenil and Dinomab newly entered health insurance in March, and the number of hospitalization is about 4 times, 8 times and 6 times higher than that before health insurance, respectively.
2021Q1 PD-1 earned US $49 million, up 139% from the same period last year; Zabutinib earned US $22 million, up 3057% from the same period last year; Dinomizumab earned US $15 million; and BMS licensed drugs were suspended from commercialization due to white and purple, with revenues of US $20 million. PD-1 overseas license confirmed part of the down payment of $500 million, driving the company's overall Q1 revenue to $606 million. Affected by the price reduction of PD-1 and other products entering health insurance, a provision of US $24 million has been made.
Research and development milestones are gradually realized. Q1 spent US $321 million on R & D, up 5.4 per cent from the same period last year.
The indication of pamipali third-line advanced ovarian cancer has been approved in China. Zabutinib compared with ibutini in the treatment of rr CLL/SLL phase 3 clinical trial obtained positive results in the mid-term analysis, which proved that Baiji's R & D strength and sea ability are expected to further open up the future space of drugs. It is estimated that the number of commercial products of the company is expected to increase to 12 by 2022. Key milestones in follow-up research and development: 1) Zabutinib will release 1L CLL data as soon as 2021, and rrCLL final results in 2022; 2) PD-1 2021 2L esophageal squamous cell carcinoma Chinese sBLA, 1L non-squamous NSCLC and 2L liver cancer approved, Novartis overseas submitted BLA;3) BGB-A1217 (TIGIT) 2021 launched two phase 3 global trials. 4) the pipeline of early products is further enriched, including BGB-11417 (BCL-2), BGB-A445 (OX-40), BGB-15025 (HPK-1) and so on. On January 29th, the company accepted the Kechuang board IPO and proposed to raise 20 billion yuan. If implemented smoothly, it will further assist the company's research and development.
Catalyst: the release of drugs exceeded expectations, and the curative effect of the new products under development was outstanding.
Risk tips: research and development failure; strategic cooperation is not as expected; Science and Technology Innovation Board IPO is not as expected.