The company has excellent management team and strong clinical execution. Founded in 2015, Nuocheng Jianhua is a Biotech company dedicated to the development of drugs for cancer and autoimmune diseases, co-founded by Dr. Cui Yisong, a former Merck American early clinical research and development leader and former Baono Technology CEO, and a world-renowned structural biologist and academician Shi Yigong, president of West Lake University. The management all have profound professional background and industry experience. Chen Xiangyang, the chief technology officer, was once the chief scientist of Pfizer. Zhang Xiangyang, the chief medical officer, is the former CEO of Hengrui USA. He has done clinical development and management in Johnson, GSK and so on.
The company has strong clinical execution, and it takes only 3 years for the first new drug Obutini to be approved to be put on the market. The company's early development and clinical ability have been verified. Zhao Renbin, a major shareholder, serves as the head of clinical executive, and the development efficiency is higher than that of his peers.
With the efforts of the team, the company has formed a complete closed loop from target development, drug discovery, clinical development, manufacturing to commercial promotion in only five years, which provides a good foundation for the company's product development and commercialization.
Obutinib has the potential to become the best drug of its kind, and the peak sales of hematoma in the domestic market is expected to exceed 2 billion yuan. Obutini is the third generation BTK inhibitor, which is used in the treatment of B-cell lymphoma and autoimmune diseases. It has strong targeting and low incidence of adverse reactions. It was approved and put on the market in December 2020. At present, there are only three BTK inhibitors on the market in China, and the competition pattern is good. The newly released clinical data of Obutini show that it has the potential best effect in CLL/SLL indications, and MCL indications have been certified as FDA breakthrough therapy. At present, the company has set up a commercial team of more than 150 people to promote and sell Obutinib, which can cover the top 500 hospitals. We estimate that the peak sales of Obutini in the field of lymphoma are expected to exceed 2 billion yuan.
Overseas rights are granted to Biogen, and global sales of Obutinib multiple Sclerosis (MS) indications are expected to exceed US $3 billion. The global market for MS drugs has reached about US $23 billion in 2018, with a large market space. At present, MS treatment still does not meet the clinical needs. BTK inhibitors have shown the potential to be superior to existing therapies in the field of MS. Obutinib is currently conducting a global multicenter II phase clinical trial. The company recently announced that it will grant overseas rights to MS with a total transaction price of about US $940 million + more than 10 per cent of sales. Biogen,Biogen, the world's leading pharmaceutical company in this field, has a 40 per cent share of the global MS drug market (annual sales of about US $9 billion). The partnership with Biogen is expected to accelerate the clinical advancement and commercialization of Obutini overseas, and we estimate that the overseas peak of MS indications for Obutini is expected to exceed US $3 billion.
The pipeline is rich and balanced, and autoimmunity and solid tumors open room for growth. At present, 5 drugs are under clinical development, and 8 drug candidates are in the stage of IND declaration or preparation. The company deeply distributes three major areas of hematoma, solid tumor and autoimmune disease: 1) the hematoma field actively expands the indications of osbutini and tries to combine with MIL-62 and BCL-2. 2) in the field of solid tumor, the company's pan-FGFR inhibitors, FGFR4 inhibitors and pan-TRK inhibitors are in the early clinical trial stage. 3) in the field of autoimmune diseases, Obutini is actively expanding in the treatment of MS and SLE. The company targets targets and drugs that have the potential to become Best-in-class or First-in-class in segments, in which autoimmunity and solid tumors are the driving forces and greater attractions for the company's medium-and long-term growth.
Profit forecast and investment advice: we expect Nuocheng Jianhua's sales revenue to exceed 2 billion yuan in 2025. Using the discounted cash flow method, we estimate that Nuocheng Jianhua is valued at 50.95 billion yuan, or HK $61.24 billion. Cover and give a "buy" rating for the first time.
Risk prompt events: the volume is less than expected; the progress of research and development is not as expected; the risk of price reduction; the risk of information lag, and so on.