\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 4.025 billion yuan in the whole year, with a year-on-year increase of 152.36%, mainly from the growth of technology licensing and franchise revenue; The net loss attributable to the parent company was 721 million yuan, a year-on-year decrease of 56.80%.
Multiple cancer species are widely distributed, and large indications will be approved soon
At present, the company has three commercial varieties of treprizumab, etesverizumab (js016) and adalimumab. The core commercial product PD-1 inhibitor treprizumab was approved by nmpa in 2021, adding three indications: third-line nasopharyngeal carcinoma, second-line urothelial carcinoma and first-line nasopharyngeal carcinoma, of which the first two were successfully entered into the medical insurance catalogue in the same year. However, affected by the price reduction of medical insurance negotiation and the adjustment of commercialization team, the sales revenue of treprizumab in 2021 was 412 million yuan, a correction from the same period in 2020. In July and December 2021, the SNDA of teraprizumab combined with chemotherapy in the first-line treatment of esophageal cancer and non-small cell lung cancer was accepted by nmpa respectively. The clinical data of the two groups showed that the PFS and OS of patients in the combined group were significantly prolonged compared with those in the simple chemotherapy group. We expect that the above major indications will be approved within this year, which is expected to boost the rapid growth of monoclonal antibody sales. In addition, a number of early clinical studies such as adjuvant / neoadjuvant therapy have been carried out in an orderly manner. In the overseas market, the indications of nasopharyngeal carcinoma are waiting for FDA on-site verification.
After the adjustment of the sales team, the company’s commercialization is about to enter a positive cycle
In 2021, the company’s commercialization team experienced several rounds of adjustment of principals and sales personnel, which affected the stability and execution of the team to a certain extent. There were some setbacks in cooperating with AstraZeneca to promote treprizumab.
In November 2021, the company appointed Li Cong as the new co CEO to be fully responsible for the commercialization work. In December, the company negotiated with AstraZeneca to terminate the cooperation agreement. At present, the company has completed the adjustment of the commercialization team, including establishing and restoring the regional marketing team, supplementing the core marketing personnel, etc.
Covid-19 has a rich drug matrix, and the research and development of vv116 is progressing smoothly
At present, the company has deployed three covid-19 therapeutic drugs, including a neutralizing antibody js016 and two small molecule oral drugs vv116 and vv993. The RdRp inhibitor vv116 developed by the subsidiary juntuo biology in cooperation with Wangshan wangshui has been approved in Uzbekistan for the treatment of moderate and severe covid-19 patients. Vv116 has rapid oral absorption and good safety. The company is currently carrying out two international multicenter clinical trials for mild to moderate (phase II / III) and moderate to severe (phase III) covid-19 patients. Both trials have completed the enrollment and administration of the first patient, and we expect to complete them within this year. Another cooperative 3CL protease inhibitor vv993 is in preclinical development stage.
Private placement ensures R & D investment, and multiple heavy early research pipelines are promoted simultaneously
In March 2022, the company announced the additional issuance plan, and planned to issue no more than 3.980 billion yuan of A-Shares (including the issuance cost), including 3.682 billion yuan to be invested in the fund-raising of innovative drug R & D project. Since the beginning of 2021, the company has 14 pipelines approved by nmpa or FDA for clinical trials, including js006 (tigit monoclonal antibody), js007 (CTLA-4 monoclonal antibody) and js014 (IL21 / HSA fusion protein). At present, the company has more than 51 products under research, of which 23 are in clinical trial stage and more than 25 are in preclinical stage. Among them, many pipelines have FIC or BIC potential. For example, the BTLA monoclonal antibody tab004 / js004 independently developed by the company has entered the phase Ib / II dose expansion stage, and clinical trials are being carried out in China and the United States in combination with treprizumab in multiple tumor species. Preclinical studies have shown that js004 can promote tumor specific T cell proliferation, bind to PD-1 monoclonal antibody or improve patient response.
Profit forecast and investment rating
Considering the price reduction of treprizumab and the decrease of neutralizing antibody income, we will reduce the income from RMB 3.767 and 4.823 billion to RMB 2.750 and 3.251 billion from 2022 to 2023, and the net profit from RMB -363 and 90 million to RMB -592 and -494 million. We expect that the revenue in 2024 will be 4.368 billion yuan and the net profit attributable to the parent company will be – 308 million yuan. Maintain the “buy” rating.
Risk warning: repeated epidemic risk, drug R & D is less than expected, and drug sales are less than expected
