Incident: The company released its 2023 annual report. As of December 31, 2023, the company has not made a profit and has accumulated uncompensated losses. Net profit attributable to mother in 2023 - 294 million yuan, net profit not attributable to mother - 325 million yuan.
The NDA for deuterium enzalutamide softgels has been accepted by the NMPA and is expected to become the first AR inhibitor approved for mCRPC second-line treatment in China. The HC-1119-04 registration study of deuterium enzalutamide was included in the 2023 CSCO Prostate Cancer Diagnosis and Treatment Guidelines, and the NDA for deuterium enzalutamide softgels was accepted by the NMPA in November 2023.
If approved, HC-1119 will be the first domestically produced innovative drug approved for marketing mCRPC after abiraterone/chemotherapy, which is expected to address the unmet clinical needs of patients. At the same time, HC-1119 has the potential to treat early-stage prostate cancer (such as MHSPC, nmCRPC, etc.).
At the end of Phase I/II clinical trials in China, HP518 completed its first patient administration. It is the first oral AR PROTAC drug to enter clinical stage in China. HP518 has completed phase I clinical trials for the treatment of mCRPC in Australia. The Australian Phase I clinical phase I phase data was selected for ASCO-GU in January 2024 and selected for the 2024 American ASCO Annual Meeting. IND for HP518 was approved by the FDA in January 2023. Phase I/II clinical trials in China completed the first patient administration in December 2023. It is the first oral AR PROTAC drug under development in China to enter the clinical stage.
A number of clinical trials have been approved, and progress is being accelerated in the research pipeline. In 2023, the company invested 248 million yuan in R&D, which is basically the same as in 2022. As of the disclosure date of the annual report, the company has 7 innovative drug research projects, 4 of which are under NDA review and different clinical stages (deuterium enzalutamide softgels, HP518, HP501, and HP537). Since the beginning of 2023, the company has obtained approval for 5 clinical trials, including 3 in China and 2 in the US. For example, the company has developed and completed a number of HP501 phase I and phase II clinical trials, and is actively promoting clinical phase II/III trials. The HP501 phase II clinical application for treating gout-related hyperuricemia was approved by the FDA in December 2023, and the IND application for HP501 in combination with the Chinese drug (combined with febustal) was approved by the NMPA in April 2024. The HP537 tablets were approved by the NMPA in China in February 2024.
Profit forecasting and investment advice. The company is expected to achieve operating revenue of approximately 0.1, 160, and 380 million yuan in 2024-2026, respectively. Considering Haichuang Pharmaceutical's strong R&D capabilities and excellent deuterium generation and PROTAC technology platforms, the NDA for the first innovative drug, denlutamide, has been accepted and maintains a “buy” rating.
Risk warning: R&D or review and approval progress falls short of expected risks, increased market competition risks, policy risks in the pharmaceutical industry, etc.