REMEGEN(9995.HK):STRONG GROWTH AMID CHALLENGING ENVIRONMENT
REMEGEN(9995.HK):STRONG GROWTH AMID CHALLENGING ENVIRONMENT
RemeGen recorded strong product sales growth in 3Q23, in a challenging environment, with revenue reaching RMB347mn, vs RMB254mn in 2Q23 (+37% QoQ) and RMB219mn in 3Q22 (+58% YoY). The strong growth in 3Q23 was mainly driven by RC18 (RMB180mn+ sales in 3Q23, +45% QoQ), while the sales of RC48 also recorded QoQ increase to RMB150mn+ in 3Q23. Recall that, in 1H23, the Company intentionally slowed down the shipment volume of RC18 to prepare for the NDRL renewal in late 2023 and the shipment has been back to normal since July. In 3Q23, the GP margin increased to 76.3% (vs 75.5% in 1H23). Thanks to the economy of scale, the SG&A expense ratio decreased to 77% in 3Q23 (vs 122% in 1H23). In 3Q23, the R&D expense rose to RMB318mn, vs RMB291mn in 2Q23. The Company narrowed its net loss to RMB327mn in 3Q23 (vs RMB380mn in 2Q23). As of Sep 2023, RemeGen had a cash balance of RMB791mn, and had secured around RMB4.9bn bank credit, according to the management.
在充滿挑戰的環境下，RemeGen在23年第三季度實現了強勁的產品銷售增長，收入達到3.47億元人民幣，而23年第二季度爲2.54億元人民幣（環比增長37％），22年第三季度爲2.19億元人民幣（同比增長58％）。23年第三季度的強勁增長主要是由RC18推動的（23年第三季度銷售額超過1.8億元人民幣，環比增長45％），而RC48的銷售額也錄得了第二季度同比增長至1.5億元人民幣以上。回想一下，在23年上半年，該公司故意放慢了RC18的出貨量，爲2023年底的NDRL續訂做準備，自7月以來，出貨量已恢復正常。在23年第三季度，國內生產總值利潤率提高到76.3％（而23年上半年的75.5％）。得益於規模經濟，銷售和收支比率在23年第三季度降至77％（而23年上半年爲122％）。23年第三季度，研發費用增至3.18億元人民幣，而第二季度爲2.91億元人民幣。該公司在23年第三季度將淨虧損縮小至3.27億元人民幣（而23年第二季度爲3.8億元人民幣）。管理層稱，截至2023年9月，RemeGen的現金餘額爲7.91億元人民幣，並已獲得約49億元人民幣的銀行信貸。
Large global potential of RC18 in multiple autoimmune diseases. In China, besides adult SLE, RemeGen is also exploring RC18 for the treatment of child SLE (Ph1) and lupus nephritis (Ph2). The sNDA of RC18 for RA was submitted to the CDE in Aug 2023, and the Company will report the Ph3 data at the coming ACR Meeting in Nov. For the underserved markets of IgA, pSS and MG, RemeGen has completed the FPI for three Ph3 trials of these indications in 3Q23. Overseas, the Ph3 SLE MRCT trial of RC18 is enrolling patients across the US, Europe, APAC and other regions. The first stage of the Ph3 study may complete the 90 patient enrolment in 4Q23, which upon FDA approval, will remain blinded and be included into the second stage of the Ph3 study to speed up the clinical development. A Ph3 trial in MG has started in the US, and the Company has reached a consensus with FDA to initiate Ph3 studies in IgA and pSS. We expect RC18 to achieve a blockbuster out-licensing deal based on its strong profile in autoimmune diseases.
RC18在多種自身免疫性疾病中的巨大全球潛力。在中國，除了成人系統性紅斑狼瘡，RemeGen還在探索使用RC18來治療兒童系統性紅斑狼瘡（Ph1）和狼瘡性腎炎（Ph2）。針對RA的RC18的SnDa已於2023年8月提交給CDE，該公司將在即將於11月舉行的ACR會議上報告Ph3數據。對於IgA、PS和MG等服務不足的市場，RemeGen已在23年第三季度完成了對這些適應症的三次Ph3試驗的FPI。在海外，RC18的Ph3 SLE MRCT試驗正在招募美國、歐洲、亞太地區和其他地區的患者。Ph3研究的第一階段可能會在4Q23年完成90名患者的入組，經FDA批准，這些患者將保持盲狀態，並納入Ph3研究的第二階段，以加快臨床開發。MG的Ph3試驗已在美國開始，該公司已與美國食品藥品管理局達成共識，啓動對IgA和PS的Ph3研究。基於其在自身免疫性疾病領域的強大知名度，我們預計RC18將達成一項轟動一時的許可協議。
RC48 to mainly focus on UC market in the US. The Ph3 trial initiated by Seagen evaluating RC48 + Keytruda for 1L HER2-expressing UC in the US (link) has achieved FPI, which is an important milestone, in our view. Patient enrolment of the pivotal Ph2 trial of RC48 mono for 2/3L HER2-expressing UC in the US progressed smoothly. In China, to enhance the advantages in UC, RemeGen is exploring RC48's potential in earlier lines of UC treatment, including first-line, neoadjuvant, MIBC and NMIBC settings. With positive signal observed in Ph2 trial of MIBC, RemeGen is in communication with CDE regarding a confirmatory trial of RC48+PD-1 for neoadjuvant MIBC. For GC and BC indications, the Company is actively exploring the potential of RC48 in earlier line treatment with a variety of Ph2 trials ongoing.
RC48將主要關注美國的UC市場。在我們看來，由希根發起的Ph3試驗，評估RC48 + Keytruda在美國的1L HER2表達UC（鏈接），已經實現了FPI，這是一個重要的里程碑。在美國對錶達2/3L HER2的UC的RC48 mono的關鍵Ph2試驗的患者入組進展順利。在中國，爲了增強UC的優勢，RemeGen正在探索RC48在早期UC治療中的潛力，包括一線、新輔助治療、MIBC和NMIBC設置。在MIBC的Ph2試驗中觀察到陽性信號，RemeGen正在與CDE就一項針對新輔助MIBC的RC48+PD-1的確認性試驗進行溝通。對於GC和BC適應症，該公司正在積極探索RC48在早期線治療中的潛力，目前正在進行各種Ph2試驗。
Maintain BUY. We expect RemeGen to continue its product sales growth in 4Q23 and beyond, and expect RC18 and RC48 to renew NRDL via 'Simple Renewals' with moderate price cuts. We revise up our DCF-based TP from HK$55.54 to HK$57.65 (WACC: 11.09%, terminal growth rate: 3.0%).
維持買入。我們預計，RemeGen將在23年第四季度及以後繼續保持其產品銷售增長，並預計RC18和RC48將通過 “簡單續訂” 續訂NRDL，並適度降價。我們將基於差價合約的目標價從55.54港元上調至57.65港元（WACC：11.09％，終端增長率：3.0％）。
譯文內容由第三人軟體翻譯。