Shanghai Junshi Biosciences Co.Ltd(688180) (688180)
Event: in December 31, 2021, the company announced that the Ministry of health of Uzbekistan has approved the emergency use authorization of oral nucleoside anti COVID-19 virus VV116 for the treatment of 2019 New Coronavirus pneumonia (COVID-19), becoming the world’s third approved oral COVID-19 small molecule drug.
Vv116 showed clear anti covid-19 virus effect in vivo and in vitro. Vv116 was developed by Shen Jingshan researcher team of Shanghai Institute of medicine, Chinese Academy of Sciences. Based on the structure of the first covid-19 antiviral drug redcivir, vv116 improves oral bioavailability. The metabolite parent nucleoside (vv116 nucleoside) can be widely distributed in vivo to achieve oral effectiveness. Preclinical pharmacodynamic studies showed that vv116 could effectively reduce the viral RNA copy and viral titer in the lungs of experimental animals. In the cell model in vitro, vv116 can effectively inhibit the replication of sars-cov-2 virus; In the mouse model, both mosadon and molnupiravir could reduce the pulmonary virus titer below the detection limit. The drug resistance barrier of vv116 was high, and it was equally effective for the original and variant strains (beta and delta strains) of sars-cov-2; It is safe to use and has no genotoxicity in vitro.
Domestic covid-19 small molecules have achieved the first launch, and made in China has helped the global anti epidemic. Mutant strains continue to challenge the effectiveness of neutralizing antibodies and vaccines. The combination of “covid-19 vaccine + specific drugs” can really reduce the impact of the virus on normal social life. Small molecule oral drugs with accurate curative effect and convenient use have high clinical and commercial value. Moshadong molnupiravir and Pfizer paxlovid have successively been listed. Under the background that overseas giants continue to lead, the company has made a sudden rise in the research and development of covid-19 oral small molecules, reflecting the company’s accurate value pipeline exploration ability, forward-looking layout strategy and strong clinical trial promotion strength.
Vv116 was approved to seize the Nuggets track in Ukraine, and the market value of covid-19 oral small molecule was unprecedented. Merck molnupiravir has received multi-national orders worth more than US $3.9 billion, Pfizer paxlovid’s single US purchase order is nearly US $5.3 billion, the market demand for oral covid-19 small molecule drugs is urgent, and the brand value is scarce. As the third global and the first domestic approved oral covid-19 small molecule drug, vv116 provides a strong filling for the company’s existing anti covid-19 infection pipeline, and is expected to continue to bring considerable sales revenue and support the company’s healthy and long-term development.
Profit forecast and investment rating. It is estimated that the company’s revenue from 2021 to 2023 will reach 4.147 billion yuan, 3.382 billion yuan and 4.197 billion yuan respectively, with a year-on-year increase of 160%, – 18.4% and 24.1% respectively; The net profit attributable to the parent company is -72 million yuan, – 173 million yuan and 124 million yuan respectively, and the corresponding EPS is -0.08, -0.19 and 0.14 yuan respectively, maintaining the “buy” rating.
Risk tip: risk of R & D failure; Risk of product promotion falling short of expectations.
