Core views
Collumbotai's revenue for 23 years was 1.54 billion yuan, an increase of 91.6% over the previous year. Revenue mainly came from partner agreement payments and R&D service revenue. The company's core product, SKB264, is currently the fastest progressing TROP2 ADC in China. It is expected to be approved for marketing this year. The indications are 3L+ triple-negative breast cancer, while the 3L non-small cell lung cancer indication is expected to submit an NDA before the end of the year. In terms of clinical progress, clinical data for 1L triple-negative breast cancer and 1L non-small cell lung cancer are expected to be released within this year. Partner MSD is actively deploying SKB264 global clinical trials. Currently, 6 clinical phase III clinical trials have been carried out, and clinical research on other indications will continue to be promoted in the future. SKB264 is expected to become a major product in the fields of lung cancer and breast cancer. The company currently has 5 products that have entered the NDA stage. We believe that with the clinical advancement of many subsequent products, the company's R&D capabilities in the ADC field will be further recognized.
occurrences
Collumbotai released its annual report for the year 23. The company's annual revenue was 1.54 billion yuan, up 91.6% year on year; adjusted loss in 2023 was 450 million yuan, a year-on-year decrease of 24.4%. R&D expenditure in 2023 was $1.03 billion, up 21.9% year over year. Cash and financial assets of $2.53 billion as of the end of '23.
24-year outlook: Catalyst events are abundant, and MSD continues to drive clinical progress. The company's A167 (RM-NPC), A166 (3L advanced HER2+BC), and SKB264 (3L advanced TNBC) are expected to be approved for listing in 2024; SKB264 3L eGFRMT NSCLC indications are expected to be submitted for NDA, A400 is expected to submit NDA for advanced RET+ NSCLC indications; SKB264 is expected to submit phase II for 1L treatment of TNBC and NSCLC Clinical trials and phase III clinical trials of 3L to treat TNBC are expected to read out data this year. So far, MSD has initiated 6 global phase III clinical trials, covering 4 lung cancer studies, as well as other indications such as endometrial cancer. It is expected that more phase III clinical trials will be carried out this year.
R&D expenses gradually increased, and cash flow from operating activities turned positive
The company's administrative expenses for 23 years were $182 million, up 90.8% year on year, mainly due to the increase in management and administrative personnel costs as the company's business developed, especially expenses related to employee incentive plans before the initial public sale; and expenses incurred during the listing phase; R&D expenses of 1.03 billion yuan, an increase of 21.9% year over year, mainly due to increased testing and testing expenses, increased employee costs, and increased investment in other ongoing R&D projects. Cash flow from operating activities was 59 million yuan, changing from negative to positive year, mainly due to related expenses paid by MSD to the company in accordance with the cooperation agreement.
Profit forecasting, valuation and investment recommendations
We expect Collombott's 2024-2026 revenue to be 1,358 billion yuan, 1,523 billion yuan, and 2,463 billion yuan, respectively. The company's three R&D platforms are actively deploying various types of drugs. Among them, the ADC platform is technologically advanced. It has completed external licensing of MSD three times, accelerated the global layout of the product, broad potential market space, excellent competitive pattern, and gave it a “buy” rating.
Risk analysis
Industry policy risks: Risks such as changes in research design requirements, price changes, volume procurement policy changes, and changes in the scope and ratio of medical insurance reimbursement due to industry policy adjustments (major changes in government procurement, health insurance policies, and innovative drug marketing review policies).
Risk of R&D falling short of expectations: In the product development process, there is a risk that the R&D cycle will be extended, costs will rise, or R&D will fail due to mistakes in design, planning, organization, coordination, and control. In the process of developing new drugs, there are risks such as uncertain clinical enrollment progress and uncertain efficacy results and safety outcome data.
Risk that approval falls short of expectations: In the approval process, there are risks such as additional data and lengthening of the approval cycle due to factors such as additional data and changes in the approval process.