Northland (430047)
Poor cognition + poor expectation, Northland has huge room to reshape its market value! Northland is a high-quality innovative drug target of the Beijing stock exchange. We believe that the market value is greatly underestimated.
Poor cognition (gene therapy scarce target + absolutely leading progress): the company is a gene therapy scarce target that has not been widely recognized by the market. At present, the first gene therapy variety has been promoted to phase III clinic, and it is one of the few gene therapy drugs promoted to the later stage of clinic in China! In addition, the company’s naked plasmid system and platform are competitive and barrier, and the current market recognition is also insufficient.
Poor expectation (large single product + good competition pattern): the company’s gene therapy varieties are super large single product attributes. At present, gene therapy listed overseas is generally rare diseases, with high pricing and few patients. Cell therapy (car-t) is also highly priced, and does not have the attribute of large single product in China. However, the company’s products are expected to be 5 billion heavy single products with good competition pattern (discussed in detail later).
Market value remodeling space: nl003 (currently phase III clinical, lower limb ischemia market) is a large single product of 5 billion level, nl005 (currently phase II clinical, ischemia-reperfusion injury and multiple indications of dry eye) is a variety of 2 billion level, nl002 (at present, phase III clinical, thrombocytopenia) is a kind of 1 billion varieties. We estimate that the total market value of DCF is 15.27 billion, and the current market value is less than 5 billion. Gene therapy leads the innovation echelon, and many heavy products support the long-term development in the later clinical stage. The later clinical products of the company have distinctive characteristics, have large variety potential, and the competition pattern is relatively good.
Nl003 is a 5 billion level heavy single product: it fully covers a large group of patients with lower limb ischemia, and the estimated market space is more than 100 billion; Gene therapy creates the possibility of cure, and innovative design fills the market gap; It attaches equal importance to efficacy, safety and convenience, and has the widest scope of application of its kind. Nl003phase II clinical data are outstanding, and phase III clinical has been comprehensively promoted. We expect to be listed in 2023. As the leader of candidate products for lower limb ischemic disease (CLI), nl003 is expected to firmly occupy the leading position in the 100 billion market of CLI therapeutic drugs. The peak sales is estimated to exceed 5 billion yuan, and the market value of a single product exceeds 10 billion yuan.
Nl005 multiple mechanisms are more likely to be used: the indications of ischemia-reperfusion injury caused by acute myocardial infarction have entered the phase II clinical stage, and the oligopoly competition market is a blue ocean; The development of acute lung injury / acute respiratory distress syndrome and dry eye go hand in hand, and the total market space is expected to exceed 20 billion yuan. Dig deep into the whole product value chain, and the future market of the project has great imagination space.
Nl002 competes strongly in the stock market with high efficiency and low toxicity: thrombocytopenia caused by tumor chemotherapy (CIT) has successfully promoted phase III clinical practice, and its tolerance is significantly better than similar listed products. It has the unique development potential of long-acting preparations, which helps to improve the convenience of treatment. We expect that the listing process can be expected in 2024, and the stock market of CIT is determined to win.
Profit forecast and rating. It is estimated that the company’s operating revenue from 2021 to 2023 will be 42 million yuan, 50 million yuan and 153 million yuan respectively, with a year-on-year growth rate of 2.4%, 16.7% and 208.2%. By summing up the valuation of various varieties, we estimate that the reasonable market value of the company in 2021 is about 15.27 billion yuan. The company has intensive cultivation in the field of gene therapy, and its core product nl003 has heavy product potential. We are optimistic about the long-term development of the company, covering it for the first time and giving a “buy” rating.
Risk tip: risk of R & D failure; The risk that the clinical trial progress is not as expected; Product registration risk; The risk that the market development is not as expected; Technology upgrade iteration risk; The risk of core technical personnel loss and talent introduction; Risk of changes in industrial policies; Risk of drug price policy adjustment; R & D technical services and raw material supply risk.
