The commercialization of Huatang Ning is progressing in an orderly manner:
The company's mid-year revenue in '23 was 79.06 million yuan, an increase of 375% over the previous year. Among them, Huatangning's sales revenue was 70.3 million yuan, and Huatangning sold about 212,000 boxes in the first half of the year. Since listing, it has achieved total sales of RMB 87.9 million. On October 8, 2022, the first-in-class new drug Huatangning developed by Hualing Pharmaceutical was approved for marketing. Two indications for dogliatin have been approved, namely: monotherapy for type 2 diabetics who have not been treated with medication, and adult type 2 diabetics with poor blood sugar control using metformin alone (combined treatment with Huatoning and metformin). The launch of Huatangning provides new treatment options for diabetics. It has been less than a year since it was approved for listing, and Huatoning's commercialization results are quite good. The company has now applied for medical insurance and has passed the preliminary review. Medical insurance negotiations will be held in November this year. If Huatang Ning can successfully enter medical insurance, the large volume of products is worth looking forward to. As the only GKA innovative drug in the world, and one of the three first-in-class new drugs approved by the China Drug Administration in 2022, the advantages of health insurance negotiations are still quite obvious. The country still encourages innovative drugs to enter health insurance, benefiting more patients.
Received a total of 1.5 billion yuan in Milestone payments from Bayer
In August 2020, the company and Bayer reached a commercial cooperation agreement on doglieletin. The company has received an advance payment of 300 million yuan and will receive a milestone payment of up to RMB 4.18 billion. After approval for listing in 2022, it received a milestone payment of 400 million yuan; after sales volume reached 200,000 boxes in August 2023, a subsequent milestone payment of 800 million yuan was confirmed. The diabetes market is vast. According to Frost & Sullivan data, the number of people with diabetes in China has exceeded 130 million in 2020 and is expected to reach 170 million by 2030; the size of China's diabetes drug market in 2020 was RMB 63.2 billion, and is expected to reach 167.5 billion yuan by 2030. There is potential for doglieptine to become a first-line treatment for type 2 diabetes in China.
New drug research and development continues to advance
Research and development of second-generation GKA products is also being actively promoted. They will target the global market, and are expected to be submitted to the US IND by the end of '23 or the beginning of '24. A post-marketing evaluation of Huatangning is also expected to be carried out. Currently, dogliatetin is the only oral medication on the market that has produced discontinuation and mitigation studies. According to the results of the DREAM study, the 52-week diabetes relief rate of participants during the study period was 65.2%, which fully reflects its efficacy. If there is more data support in the future, doctors' and patients' trust in this product will further increase.
Another coverage gives a buy rating, with a target price of HK$3.10
Huatang Ning's business is progressing in an orderly manner. If it can successfully enter health insurance, its revenue will grow rapidly. We expect the company's revenue from 2023-2025 to be 118 million yuan, 650 million yuan, and 1,350 million yuan, and EPS is -0.16, -0.04, and 0.10 yuan respectively. The target price is HK$3.10, which has 86% room to increase from the current price, and a “buy” rating.