The results were in line with expectations, with 2021Q2 product revenue doubling from the same period last year. The number of newly included medical insurance products in hospital increased significantly, and the sales volume of tirelizumab in the first half of the year was about 800 million yuan. The mid-term analysis of two global phase III trials of zabutinib in the treatment of CLL/SLL has yielded positive results and is expected to capture nearly US $10 billion in the market. The research and development ushered in the harvest time, and the clinical progress of the early pipeline was smooth. Reasonable cost control and rich cash reserves.
The results were in line with expectations, with 2021Q2 product revenue doubling from the same period last year. The company's 2021H1 realized product revenue of US $244.7 million, of which 2021Q2 realized US $138.6 million in product revenue, an increase of 111% over the same period last year. In addition, 2021Q1 and 2021Q2 respectively received partial confirmation of the advance payment for Novartis's $499.8 million and $11.4 million cooperation project. The company's 2021H1 realized a net loss of $413.8 million, which was $698.9 million compared with the same period last year and narrowed year-on-year, mainly due to a significant increase in cooperation revenue and the contribution of rapid product volume, which was in line with expectations.
The number of newly included medical insurance products in hospital increased significantly, and the sales volume of tirelizumab in the first half of the year was about 800 million yuan.
Since the implementation of the new health insurance catalogue in March 2021, the market demand for tirelizu, zebutini and deschumab has increased significantly, and the number of 2021Q2 admissions has reached about 13 times, 28 times and 23 times that before the inclusion of health insurance, respectively. Follow-up sales are expected to maintain rapid growth. Among them, 2021Q2 achieved income of 74.9 million (year-on-year + 155%, month-on-month + 53%), $42.4 million (year-on-year + 508%, month-on-month + 92%) for Raleizhu and Zebutini, respectively, and Dishu monoclonal antibody earned $3.3 million (commercialized in July 2020). In addition, Zebutini 2021Q2's US revenue of 15.9 million US dollars, an increase of 56.8% over the same period last year, is a rapid expansion of overseas sales. The company's third self-developed product, Pamipali, went on sale in May 2021, with 2021Q2 achieving sales of $2.2 million. In the second half of the health insurance negotiations, the newly approved first-line squamous / non-squamous NSCLC, new indications for second-line hepatocellular carcinoma and pamipalil are expected to be included in health insurance. Bristol-Myers Bristol-Myers Squibb Co co-sold $13.4 million in product revenue, down from $29.3 million in the same period last year, mainly due to the suspension of sales of albumin paclitaxel products. The sales volume of the company's self-developed products zabutinib, tirelizu, pamipalil and Amgen Inc authorized deschumab has eliminated the negative impact of the decline in revenue caused by the discontinuation of albumin paclitaxel and ushered in a period of rapid growth of product revenue.
The mid-term analysis of two global phase III trials of zabutinib in the treatment of CLL/SLL has yielded positive results and is expected to capture nearly US $10 billion in the market. On April 28, the head-to-head Global Phase 3 Clinical trial (ALPINE) of zabutinib versus ibutenil in the treatment of patients with R CLL/SLL achieved positive results in the mid-term analysis, reaching primary efficacy endpoints and safety-related secondary endpoints, indicating its potential for best-in-class. Zebutini successfully challenged Ibutini, and it is expected that the market space will be greatly increased and the commercial value will be huge. On July 30, the Phase 3 clinical trial (SEQUOIA) of zabutinib compared to Ballor therapy for first-line CL/SLL achieved positive major results, which is expected to advance the number of treatment lines of zabutinib and significantly expand the number of patients. Ibutini had sales of US $9.442 billion in 2020 and CAGR of 32.29% in the past five years, a rapid growth. Among them, CLL/SLL is the most important indication with the largest sales volume. We expect that zabutinib is expected to take advantage of its efficacy and safety to quickly increase its volume after the launch of the new indications and seize a certain market share of Ibutini.
The research and development ushered in the harvest time, and the clinical progress of the early pipeline was smooth. The R & D cost of 2021Q2 is US $356 million, which is + 24.5% compared with the same period last Under the high-intensity R & D investment, the company's R & D is progressing smoothly. 1) the new indication of zabutinib WM NDA has been accepted by NMPA; the new indication of MZL sNDA has been accepted by FDA and is expected to be approved in the second half of the year; the indication for MCL has been approved in Canada; except for China and the United States, Zebutini has been listed in Chile, Israel and the United Arab Emirates for MCL indications. So far, Zebutini-related listing applications have been submitted in more than 20 countries or regions. The company expects to report the results of SEQUOIA's III trial in the second half of the year and further results of the ALPINE trial in 2022. 2) tirelizumab (PD-1) has added non-squamous NSCLC first-line therapy and second-line hepatocellular carcinoma therapy in China, and new indications for second-line esophageal squamous cell carcinoma and MSI-H/dMMR have been accepted by CDE. 3) the indications for advanced ovarian cancer, fallopian tube cancer and primary peritoneal cancer have been approved. 4) the development projects of other novel targets for R & D pipeline layout, such as TIGIT, Bcl-2, OX40, PI3K δ, HPK1, etc., are progressing smoothly. The III phase clinical trial of TIGIT monoclonal antibody combined with tirelizumab combined with tirelizumab for the treatment of first-line NSCLC has been started.
Reasonable cost control and rich cash reserves. 2021Q2's sales, general and administrative expenses were $232.3 million, an increase of $108.3 million over the same period last year, mainly due to an increase in the number of employees, increased costs for research and development activities, increased costs associated with increasing the size of the global commercialized team, and increased R & D-related equity incentive expenses. As of June 30, 2021, the company's cash, cash equivalents, restricted funds and short-term investments totaled US $4.4 billion. Abundant cash reserves will ensure that the company will continue to increase R & D investment and enrich product pipelines.
Risk factors. Drug research and development, marketing progress is not as expected risk; health insurance negotiations lead to the risk of a sharp drop in product prices.
Profit forecast and valuation. The company has been researching products on the market one after another for many years, while opening up broad markets at home and abroad, License in cooperative product research and development has made steady progress, and the company has entered a new chapter of commercialization. The company's early R & D pipeline layout has great potential targets, through commercial cooperation into new products to enrich R & D pipelines. It is expected that with the launch of new products, the company will usher in a period of performance explosion. Combined with the 2021 mid-year report, the net profit forecast of the company is-1.085 billion /-1.154 billion /-8.84 U.S. dollars in 2023 (the original forecast is-1.085 billion /-1.136 billion /-895 million dollars). Based on the DCF valuation method, we believe that the company is reasonably valued at about US $40.947 billion, corresponding to the target price of HK $261 for Hong Kong shares, maintaining a "buy" rating.