occurrences
On August 23, 2023, the company announced that the net loss for the first half of 2023 was 404 million yuan, an increase of 28 million yuan over the net loss of 376 million yuan in the same period last year. The adjusted net loss was 386 million yuan, an increase of 33 million yuan over the net loss of 353 million yuan for the same period last year. The increase in losses was mainly due to increased R&D expenses and the shift from net foreign exchange earnings in the first half of 2022 to net foreign exchange losses in the first half of 2023.
reviews
The CAR-T therapy pipeline has a comprehensive layout, and a breakthrough in solid tumors is worth looking forward to. (1) BCMA CART (zevor-cel): The ORR for treating multiple myeloma is 90%, and cytokine release syndrome above grade 3 and neurotoxicity is about 5%; compared with similar overseas products, the efficacy and safety data are excellent. (2) Claudin18.2 CAR-T (CT041): It showed an ORR of about 60% in patients with terminal gastric cancer, which is significantly higher than the ORR of about 10% of PD-1 alone in such patients; and product safety is controllable. (3) Additionally, GPC3 CART (CT011) is in phase I clinical trials and CLDN18.2 monoclonal antibody (AB011) is in phase Ib clinical trials.
China and the US are expanding production capacity to support clinical trials and product commercialization. The company has integrated production capabilities for plasmids, lentiviral vectors, and CAR-T cell products. (1) China: The clinical production plant in Xuhui District of Shanghai and the commercial production plant in Jinshan District of Shanghai independently produce lentiviral vectors and CAR-T cells to support clinical trials and future commercialization of CAR-T cells in China. (2) US: The GMP manufacturing plant at Durham Triangle Research Park in North Carolina expands the company's production capacity for its own CAR-T cell products outside of China. It can provide services to 700 patients every year, marking a new level in the company's global layout.
BD continues to advance, and BCMA CAR-T promotion is accelerating. (1) In January 2023, the company and Huadong Pharmaceutical signed a cooperation agreement to commercialize BCMA CAR-T in mainland China.
The company will receive an initial payment of 200 million yuan and be entitled to receive registration and sales milestone payments of up to 1,025 million yuan, and will continue to be responsible for product development, registration and production in mainland China. (2) The company entered into a licensing agreement with HK Inno.N Corporation to develop and commercialize CT032 and BCMA CAR-T in Korea for potential treatment of various cancers. The company will receive a total of up to $50 million in advance payments and additional milestone payments, plus royalties of up to double digits based on net sales generated in Korea.
Profit Forecasts, Valuations, and Ratings
Considering that R&D pipeline products are expected to be gradually commercialized in the future, sales revenue for 2023/24/25 is estimated to be 0.50/185/452 million yuan, an increase of 270%/144% year-on-year in 24/25, and a loss of 8.0/90/61 million yuan. Maintain a “buy” rating.
Risk warning
Risks such as new product development and commercialization cooperation falling short of expectations and increased market competition.