The company's recent situation
The company recently announced a number of developments in products such as ABSK021 (CSF-1R inhibitor), including ABSK021 for active clinical data updates for TGCT at the CTOS annual meeting, phase II clinical initiation administration for pancreatic cancer, and clinical advances in more early pipeline molecules.
reviews
ABSK021 is used for TGCT phase iB data updates, and the response rate is further improved. According to the company's official website, the ORR of 32 patients in the ABSK021 50mg q.d. group reached 87.5% (including 3 CRs), which is an improvement over previous data, and the safety is better. TGCT is a type of rare tumor that urgently requires more drug treatment. Currently, the response rate of the approved drug pexidartinib is only 20-38% in TGCT, and a black box warning has been added due to severe and potentially fatal liver damage. Another phase III candidate, vimeseltinib, progresses faster, but in cross-study comparison, its response rate is lower than ABSK021, and there is a higher risk of grade 3-4 CPK increase. We believe ABSK021 has advantages in response and safety. Currently, phase III clinical administration of ABSK021 for TGCT has been initiated in China, the US, and Europe, and has obtained breakthrough therapy/priority drug qualification by NMPA/FDA/EMA; the company expects this clinical trial to be completed in early 2024 and read out in 2024. We recommend paying attention to developments such as follow-up clinical trials and potential commercialization arrangements.
More cutting-edge molecules reveal preliminary clinical data, showing potential for differentiation. The company disclosed preliminary clinical data for ABSK011 (FGFR4) and ABSK043 (oral PD-L1) in ESMO 2023. Among them: 1) ABSK011 had positive initial response data in FGF19+ HCC and good safety data. Considering the difficulty of developing FGFR4 inhibitors and poor clinical progress in the history of potential competitors, we expect ABSK011 to reverse progress; 2) The initial clinical response data of ABSK043 in slope climbing was positive and overall safety was good. There were no reports of peripheral neuropathy or grade 4/5 adverse events. In addition, the company also updated preclinical data for the selective PRMT5*MTA inhibitor ABSK131 at a recent academic conference. We recommend that you pay attention to the future progress of these drug candidates.
Cash reserves are relatively abundant, and we are actively promoting the monetization of drug discovery capabilities. By the end of June 2023, the company's net cash on book exceeded 2 billion yuan. According to the company's official website, its cash consumption for the full year of 2023 is expected to be less than 75 million US dollars. We expect the current capital to support the company's operations in the next few years. The company is also actively promoting its drug discovery capabilities and early pipeline monetization. In January 2022/March 2023, the company reached cooperation with multinational pharmaceutical company Eli Lilly and domestic pharmaceutical company Alice on early-stage drug development. We believe that on the one hand, such cooperation reflects the company's excellent small molecule drug discovery and development capabilities, and on the other hand, it also provides more opportunities to monetize the company's drug discovery capabilities.
Profit forecasting and valuation
The 2023 profit forecast was maintained and the 2024 net loss forecast of $540 million was introduced for the first time. Maintain the outperforming industry rating and maintain the target price of HK$6.76 (63% upside) according to the DCF model.
risks
The progress of clinical trials, the launch and commercialization of new drugs fell short of expectations; regulation and competition put pressure on prices.