Event

On April 7, the company signed a CLDN18.2xCD3 double antibody (HBM7022) licensing agreement with AstraZeneca PLC.

AstraZeneca PLC will receive an exclusive global license for HBM7022 research, development, registration, production and commercialization, and will be responsible for all costs associated with the further development and commercialization of HBM7022 clinic. The company will receive an advance of $25 million and a milestone payment of up to $325 million, as well as royalties based on future HBM7022 sales.

Brief comment

With the external authorization of HBM7022, the value of HBICE platform is highly recognized again.

HBM7022 is expected to lead a new generation of solid tumor T cell adaptor therapy.

CLDN18.2xCD3 double antibody HBM7022 adopts bivalent high affinity anti-CLDN18.2 and univalent low affinity anti-CD3 structure, which has high killing activity and low storm risk of cytokines, and shows good safety, pharmacokinetic characteristics and developability. Preclinical studies have shown that HBM7022 is effective in the treatment of CLDN18.2 positive gastric cancer, CLDN18.2 mutated gastric cancer and pancreatic cancer.

AstraZeneca PLC is an ideal partner for tapping the potential and value of HBM7022 treatment.

AstraZeneca PLC has rich R & D pipelines, global resource network and first-class R & D capabilities, and is one of the leaders of the global cancer race, launching blockbuster drugs such as Teresa for lung cancer and DS-8201 for breast cancer. At present, China has become the global core market of AstraZeneca PLC, which will continue to deepen its layout, so it is expected to maintain a leading edge in the Chinese gastric cancer track and realize the bottleneck breakthrough of HBM7022 as the third largest cancer species in China-- a new target drug for gastric cancer.

HBM7022 Global external Licensing increases the company's potential revenue.

The company's revenue in 2021 is $4.3 million, and the company's license will receive an advance of $25 million, an agreed amount of 5.8 times revenue in 2021. After HBM7022 achieves opening, regulatory, commercial and other milestones in the future, the company can charge up to $325 million in additional fees and tiered royalties, while the company can use prepaid funds to finance other pipeline research and development, and the potential revenue is expected to increase.

HBM7022 global external authorization further validates the value of the platform.

The company has three global scarce all-human antibody technology platforms, namely, all-human light heavy chain antibody discovery platform H2L2, all-human heavy chain antibody discovery platform HCAb and HCAb-based self-developed double anti-immune cell adapter platform HBICE. HBM7022 is developed by the company's HBICE platform, thanks to its unique platform technology, which has low molecular weight, strong tumor penetration, high molecular design flexibility, strong immunogenicity and affinity, and solves the problem of light and heavy chain mismatch in the process. Its external authorization further validates the value of the company's core technology platform and independent R & D strength.

CLDN18.2 protein is an ideal target for immunotherapy of solid tumors such as gastric cancer and pancreatic cancer. As a highly selective marker of gastric pedigree, CLDN18.2 protein is expressed in short-cycle differentiated cells, but not in gastric mucosal stem cells, but it is abnormally activated in various malignant tumors of digestive system (esophageal cancer, pancreatic cancer, cholangiocarcinoma, etc.), and continues to express after malignant transformation, and studies have shown that it is involved in tumor cell proliferation and chemotaxis in gastric cancer cell lines. Therefore, the limited expression of CLDN18.2 makes it have important targeting research value.

CLDN18.2 targeted drug research and development to meet the upsurge. According to Insight data, there are 80 global CLDN18.2 new drug research projects, of which 43 (54%) are in the clinical stage. CLDN18.2 has become one of the most popular tumor R & D investment targets in the world. Domestic pharmaceutical companies such as Hengrui Pharmaceutical, CSPC Pharmaceutical, Zai Lab Limited, Shanghai Fosun Pharmaceutical and other pharmaceutical companies have also joined the bureau. At present, 68 global CLDN18.2 new drug research projects are attended by domestic enterprises, accounting for 85%.

CLDN18.2 pluralistic therapy competes on the same stage. At present, the global targeting CLDN18.2 target product types include the main product forms: monoclonal antibody (22), bispecific antibody (17), CAR-T (19) and ADC (13). Although monoclonal antibody therapy and CAR-T therapy are currently leading in the number of programs, it is difficult for these two types of therapy to maintain a leading edge due to differences in technical routes.

The layout of CLDN18.2 target double resistance track is in the ascendant. At present, Qiyu Biology, I-MAB, INNOVENT BIO and other pharmaceutical companies have laid out the CLDN18.2 double-antibody track, focusing on CLDN18.2xCD3, CLDN18.2xPD-L1, CLDN18.2x4-1BB and so on. Among them, the fastest progress of CLDN18.2xCD3 double antibody is AMG-910 developed by Amgen Inc Company, which is based on the HLE BiTE platform of Amgen Inc Company. The global multicenter Phase I trial with indications for gastric cancer and gastroesophageal borderline adenocarcinoma was carried out in February 2020. At present, the recruitment of clinical phase I subjects has not yet started, and the trial is temporarily at a standstill. QLS31905 of Qilu Pharmaceutical and IBI389 of INNOVENT BIO have also carried out phase I clinical trials with solid tumors as indications, but clinical trials with gastric cancer as indications have not yet been carried out. HBM7022 is currently carrying out preclinical trials for gastric cancer, showing a strong tumor growth inhibition in gastric cancer models, ranking in the forefront of the progress of new drug development for gastric cancer CLDN18.2xCD3 targets.

Investment evaluation and suggestion

And Platinum Pharmaceuticals has the world's leading three scarce core technology platforms, excellent R & D capabilities and highly differentiated and innovative R & D pipelines. At the same time, taking into account the down payment of HBM7022's external authorization, potential milestone revenue and royalty share of sales, the company's revenue is expected to be 300 million yuan, 466 million yuan and 756 million yuan respectively from 2022 to 2024. The net profit of the company from 2022 to 2024 is-232 million yuan,-91 million yuan and-65 million yuan respectively. It is expected that the company will break even and cover it for the first time with a "buy" rating.

Risk analysis.

New drug research and development failure risk; review progress is not as expected risk; patent risk; industry competition intensified risk; health insurance control cost risk.