occurrences

On May 11, 2023, the company announced that the injectable paclitaxel polymer micelle was officially included in the “2022 Shanghai Biomedical “New Excellent Pharmaceutical Device” Product Catalogue.

reviews

Broad-spectrum anti-tumor drug formulations are innovative, production capacity is sufficient, and a breakthrough is imminent. (1) The company's paclitaxel polymer micelles have been approved as first-line treatment for patients with locally advanced or metastatic non-small cell lung cancer (NSCLC); with subsequent clinical advances such as breast cancer, the innovative breakthrough dosage form of paclitaxel, the cornerstone broad-spectrum chemotherapy drug paclitaxel, has a wider scope for tumor medication. (2) In 2022, the first full sales year affected by the epidemic, paclitaxel had annual revenue of 236 million yuan, and the net profit of the mother was 143 million yuan. The revenue for the first quarter of 2023 was 92 million yuan, and the net profit of the mother was 55 million yuan. (3) The new production line in the company's existing plant has completed all hardware construction, with an annual production capacity of 1 million paclitaxel polymer micelles for injection. It is expected that it will be officially commercialized in mid-2023. As the company's fund-raising project for 5 million paclitaxel polymer supporting facilities progresses, product marketing demand will be guaranteed with sufficient production capacity, and sales will not be constrained by production capacity.

With the inclusion of the “New and Excellent Pharmaceutical Product Catalogue”, admission to Shanghai may be accelerated. The inclusion of the company's paclitaxel products in Shanghai's “Innovation Catalogue” will quickly help the product be admitted to hospitals in Shanghai; while Shanghai, Beijing and other places are major sales centers for oncology drugs in China. Since the company's products have not yet been covered by national medical insurance, admission difficulties are an important bottleneck in sales breakthroughs. This time, admission to Shanghai will achieve a breakthrough, which may have a great impact on the acceleration of sales of the company's products.

A number of authoritative guidelines have recommended Level 1, and awareness continues to rise. (1) Compared with traditional paclitaxel, the company's paclitaxel micellar is safer because of its EPR effect, the dosage used can be increased, and the curative effect is more remarkable as a result. (2) This product has been recommended in multiple doctors' guidelines one after another. In June 2022, the company's paclitaxel micelle was included in the “Chinese Medical Association Lung Cancer Clinical Diagnosis and Treatment Guidelines (2022 Edition)”; in January 2023, it was included in the “China Treatment Guidelines for Stage IV Primary Lung Cancer (2023 Edition)”; in April 2023, it was included in the “Chinese Society of Clinical Oncology (CSCO) Non-small Cell Lung Cancer Diagnosis and Treatment Guidelines (2023)”. We believe there will be a further increase in sales of this product as the influence of guide recommendations increases and admissions in Shanghai accelerate.

Profit Forecasts, Valuations, and Ratings

We maintain our profit forecast. We expect revenue for 2023/24/25 to be 498/86/1,353 million yuan, an increase of 111%/73%/57% over the previous year; Guimu's net profit was 3.04/558/896 million yuan, an increase of 112%/84%/61% over the previous year. Maintain a “buy” rating.

Risk warning

Risks such as reliance on a single product, falling short of expectations in commercialization, loss of majority shareholders' holdings, and rapid technological changes in the company's drug delivery system innovation field.