\u3000\u3 Guocheng Mining Co.Ltd(000688) 180 Shanghai Junshi Biosciences Co.Ltd(688180) )
Event: the company released the performance of 2021 annual report and realized an operating revenue of 4.025 billion yuan, a year-on-year increase of 152.36%. Compared with the same period of the previous year, the net loss attributable to the parent narrowed to 720 million yuan, and the non net loss attributable to the parent narrowed to 884 million yuan. The income was in line with our expectations and the loss was slightly higher than our previous expectations.
Comments:
Covid-19 small molecule drugs are ahead of schedule, and the multi-level layout of covid-19 antiviral field is gradually entering the harvest period. Vv116, a covid-19 small molecule RdRp inhibitor jointly developed by the company, has made a leading progress in China. It has previously obtained emergency authorization from Uzbekistan. At present, vv116 has been started for phase III clinical treatment of moderate and severe covid-19 patients and phase II / III clinical treatment of mild and moderate covid-19 patients, and the first patient has been enrolled. Another covid-19 small molecule 3CL protease inhibitor vv993 is in preclinical stage. The company has a multi-level layout in the field of covid-19 antiviral. The company’s covid-19 neutralizing antibody has obtained emergency authorization in more than 15 countries around the world. The sales share and milestone revenue in 2021 exceeded 2 billion yuan, contributing strong revenue.
The sales of PD-1 monoclonal antibody declined in 21 years. With the approval of major indications in 22 years, it is expected to usher in the turning point of commercialization. The company’s core product treprizumab achieved an annual revenue of 412 million yuan in 21 years, down from the previous year, mainly due to 1) the failure to realize “price for quantity” after the decline of terminal price at the beginning of the year; 2) At the end of the year, after it was included in the 21st edition of the national medical insurance catalogue and further reduced the price, the company compensated the price difference for all the inventory of dealers; 3) In the past 21 years, the company has experienced the adjustment of the person in charge of commercialization. Looking forward to 22 years, the first-line treatment of esophageal squamous cell carcinoma and non-small cell lung cancer with treprizumab have been submitted to NDA and accepted. After the company appointed Mr. Li Cong to be fully responsible for the commercialization related work, the adjustment of the commercialization team has been completed and is expected to usher in a breakthrough. Overall, the company’s multi-level R & D layout is expected to gradually enter the commercial value realization period in 22 years.
R & D investment continued to be strong, and the product echelon under research for indications such as tumor immunity, autoimmunity and metabolism was orderly. In the past 21 years, the company’s R & D expenses reached 2.069 billion yuan, with a year-on-year increase of 16.35%. A total of 23 products in the pipeline under research are in clinical trial stage (PCSK9 monoclonal antibody, bevacizumab and PARP inhibitor are in phase III clinical), and more than 25 products are in preclinical development stage. The company takes treprizumab as the cornerstone drug to comprehensively layout the IO field. At the same time, it is also actively layout the next-generation immunotherapy targets and new technologies, such as dual antibody platform, ADC drug R & D platform and siRNA drug R & D platform. At present, BTLA monoclonal antibody (currently carrying out a number of phase Ib / II clinical trials in China and the United States), cd112r (clinical trial application approved by FDA), tigit monoclonal antibody, PARP and other varieties are arranged in the field of tumor immunity, which is expected to make steady progress in the research and development of innovative drugs.
Profit forecast, valuation and rating: considering the declining income of covid-19 neutralizing antibody and other factors, we lowered the company’s 22-23 year net profit forecast to -730 / – 90 million yuan (the previous time was -0.2/130 million yuan), and increased the 24-year net profit forecast to -79 million yuan. The company is the first tier innovative biopharmaceutical company in China. The R & D Progress of covid-19 small molecule drugs is leading, and the commercialization of core varieties is expected to usher in an inflection point, Maintain the “buy” rating.
Risk tips: the risk of drug R & D failure, the risk of product sales falling short of expectations, and the risk of product price reduction.
