Key points of investment
I am optimistic that the company's many large varieties and large indications (AK104, AK112, AK102, AK101) will enter the commercialization stage one after another, driving the company's product sales into a period of rapid growth.
Performance: AK104 is growing steadily, and AK112 is selling well
The company disclosed 2024H1 performance: achieved revenue of 1.025 billion yuan, of which product sales revenue was 0.939 billion yuan (YOY 23.96%, AK104 revenue 0.706 billion yuan, YOY 16.5%, and AK112 revenue 0.103 billion yuan), and technical licensing and technical cooperation revenue of 0.085 billion yuan (mainly brought by signing supplementary licensing agreements with SUMMIT to expand the scope of the licensing market for Evarosi).
AK112: Approved domestically, head-to-head K drugs have reached the PFS endpoint. Looking forward to 2024 WCLC data. On May 24, 2024, the NMPA approved the marketing application for the new drug Eldafang (AK112). The indication is the use of evosil in combination with chemotherapy to treat non-squamous NSCLC that progresses after EGFR-TKI treatment. As of June 30, Edafang's product revenue was approximately $0.103 billion. At the end of May 2024, the phase III clinical trial (AK112-303/harmoni-2) of the first-line treatment of PD-L1+ NSCLC with Pabolizil as a single agent obtained decisive positive results, reaching the main PFS study endpoint, which had significant statistical significance and significant clinical benefits. This was the first and only phase III clinical trial in the world where a single agent compared with Pabolizil monotherapy obtained positive results. The SNDA for this indication was successfully submitted to the CDE in July 2024. In addition, several phase III clinical trials of Ivorsi are underway: combined chemotherapy compared tiralizumab combined with chemotherapy 1LSQ-nsclc, combined chemotherapy with valiumab in combination with 1L biliary tract cancer, combined with levalizumab (AK117, CD47) 1L PD-L1+ head and neck squamous cell carcinoma, and a phase III clinical trial for pancreatic cancer with evasil combined chemotherapy with 1L pancreatic cancer is planned. Partner SUMMIT is actively promoting enrollment in the global multi-center phase III clinical trial (Harmoni) of NSQ-nsCLC, which progressed after receiving third-generation EGFR-TKI treatment, and the global multicenter phase III clinical trial (Harmoni-3) of iVosi combined chemotherapy compared with Paboribil 1L of chemotherapy. We look forward to the disclosure of phase III clinical trial data on the 2024 WCLC compared with Pabolizil as a single agent for first-line treatment of PD-L1+ NSCLC, as well as the promotion of overseas clinical enrollment and subsequent data reading.
Progress: During the commercialization period, in the multi-product NDA, the Phase III phase III clinical trial for advanced G/GEJ failed first-line treatment with PD- (L) 1 inhibitors combined with chemotherapy combined with PD-1 inhibitors and chemotherapy has achieved the first enrolment of subjects. AK109 VEGFR-2 The drug inucimab (AK102, PCSK9), which is used to treat essential hypercholesterolemia and mixed hyperlipidemia, and the drug iroximab (AK101, IL-12/IL-23) to treat psoriasis are in the NDA phase. Gumocimab (AK111, IL-17) and mandoximab (AK120, IL-4Rα) treatments are in clinical phase III, and the company has entered the commercialization phase.
Profit forecasting and valuation
We expect the company's revenue for 2024-2026 to be 2.589/4.885/6.88 billion yuan, respectively, and net profit to mother of -0.377/0.617/1.074 billion yuan respectively. Considering that AK104 and AK112 continue to expand, it is expected that many major data catalysts such as AK112 and AK117 will continue to be disclosed, and we maintain a “buy” rating.
Risk warning
Risk of clinical or commercial failure, risk of sales falling short of expectations, competitive risk, policy risk, calculation risk.