\u3000\u3 Guocheng Mining Co.Ltd(000688) 180 Shanghai Junshi Biosciences Co.Ltd(688180) )
Event: the company released its annual report for 2021 and achieved a revenue of 4.03 billion yuan, a year-on-year increase of 152.4%; The net profit attributable to the parent company is – 720 million yuan. The loss of the company is narrower than that in 2021, mainly due to: 1) in 2021, the company reached a strategic cooperation agreement with coherus and obtained a down payment of US $150 million; 2) Overseas sales share of neutralizing antibody js016 and milestone payment according to the contract.
The price reduction of medical insurance affects the annual sales of PD-1, and a breakthrough is expected to be made in going to sea. In 2021, the company’s PD-1 revenue was 410 million yuan, which was mainly affected by the price reduction of medical insurance (a decrease of 60%) and the price difference compensation for the full inventory of dealers; During this period, second-line urothelial carcinoma, third-line nasopharyngeal carcinoma and first-line nasopharyngeal carcinoma were added, and the first two items were newly included in the 2021 medical insurance catalogue. In 2022, the company’s PD-1 will see accelerated progress at home and abroad. In April, the FDA target payment review (PDUFA) will be ushered in, and there is no need to hold an expert advisory committee meeting, so the overseas process can be expected; China is expected to usher in the listing of first-line major indications (first-line non-small cell lung cancer and first-line esophageal squamous cell carcinoma), and a number of indication data are expected to be read out and support the listing application within the year. Based on the expectation of Chinese and foreign markets, treprizumab is expected to achieve large sales growth space.
Vv116 launched the global phase II / III clinical research and laid out the anti epidemic defense line in depth. The company also distributes neutralizing antibodies and small molecule anti covid-19 drugs. The first neutralizing antibody js016 was urgently authorized in the United States in 2021 and distributed in more than 15 regions around the world. The new generation of broad-spectrum neutralizing antibody js026 has entered the clinical stage; The oral small molecule drug vv116 was urgently authorized by Uzbekistan in December 2021. The phase II / III clinical study of mild and moderate diseases and phase III clinical study of moderate and severe diseases were launched in February and March 2022 respectively; Three phase I clinical data show that vv116 has good pharmacokinetic properties and safety. Vv116 is the first echelon in China and is expected to be applied for listing within this year. In addition, the company also introduced 3CL protease inhibitor vv993 to construct neutralizing antibody and oral small molecule anti covid-19 pipeline.
The R & D pipeline has been accelerated, and the echelon of innovative products has been enriched day by day. The company actively embraces innovative R & D, with R & D expenses of 2.07 billion yuan in 2021, a year-on-year increase of 16.4%. The company has made great progress in drug research in 2021. 1) the molecular type of drug has been expanded from monoclonal antibody to antibody coupled drug (ADC), double antibody, polypeptide, nucleic acid and other next-generation innovative therapies; 2) BTLA McAb, CD39 McAb, cldn18 Early stage projects such as 2 monoclonal antibody / ADC and subcutaneous injection of PD-1 monoclonal antibody have been steadily promoted, and many of them have first in class potential. The company has formed a echelon of 3 commercialized products, 23 clinical products and more than 25 preclinical products to build a solid R & D infrastructure.
Profit forecast and investment suggestions. 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. Without considering the sales expectation of covid-19 small molecule drugs for the time being, we expect the net profit attributable to the parent company in 2022 / 2023 / 2024 to be -1.18 / – 5.8/110 billion yuan. Maintain the “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.
