\u3000\u3 Guocheng Mining Co.Ltd(000688) 180 Shanghai Junshi Biosciences Co.Ltd(688180) )
Key investment points
Event: Shanghai Junshi Biosciences Co.Ltd(688180) released the report for the first quarter of 2022. During the reporting period, the company’s operating revenue was 630 million yuan, a year-on-year decrease of 61.02%; The net profit attributable to the shareholders of the listed company was -396 million yuan, which turned from profit to loss year-on-year; Non net profit attributable to parent deduction -430 million yuan; Basic earnings per share -0.44 yuan.;
Comments: the performance met expectations and PD-1 sales returned to normal. The year-on-year decrease in revenue was mainly due to the down payment of US $150 million paid by coherus for the teraprizumab cooperation project in the same period of last year; The current revenue includes: 1) overseas technology license income paid by coherus for exercising the option of specific anti tigit monoclonal antibody (tab006 / js006) (USD 35 million); 2) Overseas franchise income of covid-19 neutralizing antibody etecivir monoclonal antibody (js016 / ly-cov016); 3) Sales revenue of PD-1 monoclonal antibody trepril: in the first quarter of 2022, the sales revenue reached 110 million yuan, with significant year-on-year and month on month growth. The sales activities in the Chinese market have come out of the trough and gradually returned to normal.
Covid-19 is rich in products and pays attention to the clinical progress of vv116: oral nucleoside covid-19 small molecule drug vv116 is in the international phase III clinical stage, and a number of studies are under way, including 1) for the international phase III clinical of moderate and severe covid-19, the first administration was completed in March 2022; 2) The international phase II / III clinical study on mild to moderate covid-19 (nct05242042) completed the enrollment and administration of the first patient in Shanghai public health clinical center in March 2022, and set up clinical centers in many places across the country; 3) For the mild to moderate phase III clinical study (nct05341609), vv116 was compared with Pfizer’s oral drug paxlovid in the head-to-head test, and the first administration was completed in April 2022. On April 28, 2022, the clinical research center of the Chinese University of Hong Kong announced that it would cooperate in the clinical study of vv116. We believe that under the current epidemic situation, there is a large supply gap for covid-19 oral drugs outside China. We expect that vv116 will be declared as soon as Q3 this year and is expected to be approved within this year, which has great commercial value.
PD-1 overseas registration received a complete reply from FDA and is expected to be successfully approved after on-site verification. On May 2, Shanghai Junshi Biosciences Co.Ltd(688180) announcement received a complete reply letter from FDA on the indication BLA of trepril for nasopharyngeal carcinoma. The reply letter requires a change in the quality control process. Junshi plans to meet directly with FDA and is expected to resubmit the BLA before midsummer 2022. The reply mentioned that the on-site verification to be completed was hindered by travel restrictions related to the outbreak of novel coronavirus pneumonia. The specific time of on-site verification will be notified separately. We believe that the reply letter does not mention any questions about clinical trials and data, and it is expected to be successfully approved after on-site verification.
We have made many progress in innovation and continued to promote internationalization. On April 20, Shanghai Junshi Biosciences Co.Ltd(688180) announced the nomination of Dr. Zou Jianjun as the executive director of the company, and appointed him as the deputy general manager of the company and President of global R & D. Dr. Zou once served as Jiangsu Hengrui Medicine Co.Ltd(600276) chief medical officer. Recently, cd112r monoclonal antibody has obtained FDA clinical approval, and trepril has obtained FDA orphan drug qualification for the treatment of small cell lung cancer; In April, the company announced that it would release the clinical research results of self-developed anti BTLA monoclonal antibody (tab004 / js004) at ASCO annual meeting in 2022.
Profit forecast: without considering the revenue contribution of covid-19 oral drug vv116, we expect the company’s revenue from 2022 to 2024 to be RMB 2.092 billion, RMB 3.163 billion and RMB 4.11 billion respectively, with a year-on-year increase of – 48%, 51.2% and 39.4% respectively. The company has rich innovative drug pipeline and strong product development ability. It has the potential to grow into a large global innovative drug enterprise and maintains the “buy” rating.
Risk warning events: the risk of R & D and listing falling short of expectations, the risk of sales falling short of expectations, and the risk of policy uncertainty
