3Q23 performance is slightly higher than we expected.
The company announced the results of the third quarter: 3Q23 revenue of 40.102 million yuan, 1- 3Q23 net profit of-315 million yuan; Suvotinib since August listing strong demand, sales revenue slightly higher than our expectations, 1- 3Q23 company performance slightly higher than our expectations.
Trend of development
Suvoltinib (trade name: Suvoltinib) has been approved for marketing in China, and the commercial volume is rapid. Servoza was approved for marketing by NMPA on 22 August 2023 for locally advanced or metastatic NSCLC with EGFR Exon 20ins mutation that progressed on or after prior platinum-based chemotherapy or were intolerant to platinum-based chemotherapy. On August 26,2023, Shu Wozhe's first batch of prescriptions came into effect nationwide. As of September 30,2023, Shu Wozhe realized sales revenue of CNY 40.102 million. The company is fully distributed in terms of commercialization, which we believe reflects strong sales execution. Shuwozhe is the first domestic innovative drug targeting EGFR Exon 20ins mutation. The competitor amivantamab (Johnson & Johnson) with the same indication is behind in China. On October 26,2023, the domestic marketing application was accepted. Mobotinib (Takeda) was fully approved for clinical phase III registration and did not reach the endpoint. Active delisting in the United States was initiated on October 2,2023.1 Although approved in China, it is still communicating with regulatory authorities. We believe that Shuwozhe has a good competitive structure and data advantages, and is expected to occupy the main domestic market share.
The global clinical progress of suvotinib and golicitinib was smooth. The new drug marketing application of JAK inhibitor golicitinib has been accepted by NMPA and included in the priority application approval process. It is used to treat treated peripheral T cell lymphoma. It is the first and only highly selective JAK1 inhibitor in the NDA application stage in the lymphoma field. Based on the global registration multicenter clinical data, the company plans to submit the marketing application to FDA from 2H23 to 2024. At the ESMO meeting in 2023, the company disclosed the positive preliminary data of first-line monotherapy of Shuozhe for EGFR Exon20ins mutant advanced NSCLC, with ORR of 78.6% and mPFS of 12.4 months. Schwerzer's global clinical registration for first-line/late-line EGFR Exon20ins mutant NSCLC is accelerating 2.
Profit forecast and valuation
We maintain our 23/24 revenue forecast of RMB 93/324 million unchanged. Due to the commercialization management of the company's products and the expansion of sales team and capital investment slightly higher than our expectations, we reduce our 23/24 attributable net profit forecast of RMB-8.26/-7.18 million to RMB-8.99/-8.55 million. We use DCF valuation method, maintain outperform industry rating, maintain the target price of 50.31 yuan unchanged, compared with the current share price has 14.6% upside.
Risk
The launch of new products, clinical trial data and sales were lower than expected; competition intensified.