\u3000\u3 Guocheng Mining Co.Ltd(000688) 180 Shanghai Junshi Biosciences Co.Ltd(688180) )
Key investment points
Investment logic: 1) one of the most high-quality innovative Biopharmaceutical Enterprises in China and a pioneer of innovative drugs to the sea. The company is one of the earliest innovative drug R & D biotech enterprises in China. It has a perfect macromolecular R & D and production technology platform. At present, it has the first approved PD-1 monoclonal antibody in China and more than 45 varieties under research. The company is a pioneer of innovative drugs to the sea. Its covid-19 neutralizing antibody (js016) is the first innovative biological drug authorized by FDA in China and is expected to contribute more than 2 billion revenue in 2021. 2) The core variety PD – 1 continues to be in high volume, and the overseas market is worth looking forward to. PD-1 of the company has many heavy indications under research, among which the layout depth of perioperative immunotherapy is the first in China, corresponding to a large patient population; The first listing application in the United States is about to usher in the final decision. If it is successfully approved by FDA, the volume of revenue is expected to increase significantly. 3) In depth layout of the field of anti covid-19 drugs and become an important participant in the fight against epidemic diseases. In addition to neutralizing antibodies, the company focuses on the field of oral covid-19 drugs. Vv116 has entered phase II / III clinical practice and is expected to apply for listing within this year; The company also introduced 3CL protease inhibitor vv993 to construct neutralizing antibody and oral small molecule anti covid-19 pipeline.
New indications and going to sea are expected to drive the accelerated release of PD-1 monoclonal antibody. 1) Treprizumab is the first listed PD-1 in China. It has been approved for melanoma, first-line and third-line nasopharyngeal carcinoma and second-line urothelial cancer, and has been included in the national medical insurance catalogue. 2) A number of major indications will be approved soon, and the perioperative treatment will greatly advance the treatment cycle. China has applied for NDA for first-line esophageal squamous cell carcinoma and first-line non-small cell lung cancer. The indications of first-line liver cancer and small cell lung cancer are expected to obtain clinical data in 2022. In particular, the company has a wide layout for perioperative immunotherapy, and perioperative therapy is still the PD-1 blue ocean market. We believe that the auxiliary / neoauxiliary layout will significantly advance the service cycle and cooperate with the gradually enriched large indications to jointly drive the rapid and large-scale production of treprizumab. 3) It is expected to become the first domestic PD-1 approved by FDA. The first BLA application of treprizumab in the FDA will usher in the paid review (PDUFA) in April 2022, which is expected to become the first PD-1 product approved in the United States. Multiple indications such as lung cancer and liver cancer will also be submitted to the FDA in the next few years. Integrating China and overseas markets that have submitted listing application indications, treprizumab is expected to achieve large sales growth space.
The covid-19 therapeutic drug market will be comprehensively distributed, and the strength will participate in the anti epidemic. The company has a combination of neutralizing antibody and oral small molecule anti covid-19 drugs, and the products are suitable for patients with mild to severe diseases. Among them, neutralizing antibody (js016) was commercialized overseas in 2021, which together with the unlocked milestone payment brought more than 2 billion overseas revenue. Its clinical research in China is in progress, and the first patient has been enrolled in the treatment of moderate and severe phase I and II clinic. Early clinical data show its good safety and pharmacokinetic characteristics. Oral small molecule drug vv116 has been authorized to use in Uzbekistan, or it will be reported to the market within this year, the next heavyweight drug after neutralizing antibody. In addition, the company closely followed the latest overseas anti covid-19 technical route and introduced 3CL protease inhibitor under development (vv993), forming the strongest anti covid-19 drug R & D pipeline in China.
Build a comprehensive anti-tumor pipeline based on PD-1 immunotherapy, with rich reserves of non-tumor pipelines. The company has developed both endogenesis and extension, and has formed a research and development pipeline echelon of 45 + varieties, covering the treatment fields of tumor, self immunity, metabolism and so on. 1) The field of tumor immunity is based on PD-1 immunotherapy. The BTLA monoclonal antibody, cd112r monoclonal antibody, long-acting IL-21 and CD93 distributed by the company have global first in class potential and cooperate with PD-1 to prolong the life cycle of monoclonal antibody; 2) Adalimumab analogues (ubp1211) in the field of self immunization have been approved for listing, and IL-17A and BLyS have entered the clinical stage; 3) PCSK9 monoclonal antibody and uricase inhibitor are arranged in the field of metabolism, covering major indications such as hyperlipidemia and hyperuricemia, and an RNAi drug is under research.
Profit forecast and investment rating. The company is a high-quality innovative drug enterprise, driven by two wheels at home and abroad. PD-1 monoclonal antibody, oral covid-19 drug and the world’s first drug are expected to open the ceiling of the company’s performance expectations. We expect the company to achieve an operating revenue of RMB 4.01/26.8/3.83 billion and a net profit attributable to the parent company of RMB – 740 / – 11.8 / – 660 million in 2021, 2022 and 2023. For the first time, give a “buy” rating.
Risk tip: risk of medical insurance price reduction; The risk of intensified industry competition; Epidemic risk; Product R & D and clinical progress were less than expected.
