Investment Highlights

Teripril US approved, sales inflection point emerging, we are optimistic about the accelerated release inflection point driven by the large indication of Teripril monoclonal antibody, revenue elasticity under the commercialization of multi-product portfolio, and PD-1 and other international breakthroughs brought about by the performance growth inflection point.

performance: rapid growth of commercial products, stable sales of Treplex 2023Q1-Q3, revenue of 0.986 billion yuan (YOY-19.04), net profit attributable to parent -1.407 billion yuan, total commercial drug sales revenue of about 0.892 billion yuan (YOY 67.8%) in the first three quarters, of which Treplimab revenue was about 0.668 billion yuan (YOY29.7%),VV116 revenue was about 0.124 billion yuan, and adalimumab revenue was about 0.099 billion yuan. It was calculated that 2023Q3 Treplimab achieved revenue of about 0.221 billion yuan (YOY about 1.4 percent), even under the pharmaceutical policy disturbance to achieve a better sales absolute amount.

research and development progress: teripril has been approved by FDA for listing, a number of domestic NDA continue to promote PD-1 indications NDA continue to promote, BTLA monoclonal antibody phase III MRCT is about to be launched. 2023Q3 Treplimab for advanced renal cell carcinoma first-line treatment, for extensive small cell lung cancer first-line treatment of new indications listed for NMPA acceptance, first-line treatment of melanoma phase III clinical studies reached the main study endpoint; the company's independent research and development of the world's first anti-tumor anti-BTLA monoclonal antibody tifcemalimab combined with teripilimumab into clinical development stage (first-in-human) as a randomized, double-blind, placebo-controlled, international multicenter phase III clinical study of consolidation therapy for patients with limited-stage small cell lung cancer who have not progressed after radiotherapy and chemotherapy has been approved by FDA and NMPA. Anti-PD-1 and VEGF bispecific antibodies (code: JS207) clinical trial has completed the first subject administration.

Trepley approved by the FDA, optimistic about the continued breakthrough in internationalization. October 29, 2023 Company Announcement: Treprozumab (US trade name: LOQTORZI?) combination cisplatin/gemcitabine as first-line therapy for adult patients with metastatic or recurrent locally advanced nasopharyngeal carcinoma and as monotherapy for adult patients with recurrent, unresectable, or metastatic nasopharyngeal carcinoma that has progressed during or after prior platinum-based therapy. The BLA application for biologics has been approved, and teripilimumab is the first and only approved drug for nasopharyngeal carcinoma in the United States, it is also the first Chinese independent research and development and production of innovative biological drugs approved by FDA. We are optimistic about the company's continued breakthrough in internationalization and the revenue and profit elasticity brought to Trepley by overseas markets.

Earnings Forecast and Valuation

Taking into account changes in global demand for emergency medication, we adjust the company's VV116 sales. Taking into account the impact of domestic pharmaceutical regulatory policies on the release of core products, we lowered the company's annual revenue and profit forecast for 2023-2025. Our model predicts that the company will continue to lose 14.15, 11.09 and 0.527 billion yuan in 2023-2025. We continue to emphasize that we are optimistic about the accelerated release inflection point driven by large indications such as the peri-operative period of Treplimab, the revenue elasticity under the commercialization of multi-product portfolios such as PCSK9 and IL-17 inhibitors, and the inflection point of performance growth brought about by international breakthroughs such as PD-1, and we maintain a "buy" rating.

risk tips

clinical failure risk, competitive risk, product sales less than expected risk, policy risk.