(report producer/ analyst : Caitong Securities Zhang Wenlu )
1 Yahong Pharmaceutical - an innovative drug company for urogenital tumor treatment
Company was established in 2010 and officially listed on Science and Technology Innovation Board in 2022, and the company entered a stage of rapid development. In 2010, the company introduced patented technology from Johns Hopkins University in the United States and obtained the global development license for APL-1202 products. In 2013, it obtained NMPA approval for clinical trials. After nearly 10 years of in-depth research, it successfully promoted APL-1202 products to the phase III clinical stage. It is also the world's first oral and reversible MetAP2 inhibitor to enter a critical/phase III clinical trial in the field of anti-tumor.
Company deeply explores unmet clinical needs and lays out the HSIL blue ocean market. In 2019, the company introduced the Norwegian Photocure company APL-1702 product and won the global development and commercialization rights of the product. In the same year, APL1702 won the Fierce Innovation Award Life Sciences Section Medical Device Innovation Award, and is currently in the clinical phase III stage.
The founder of the company, Dr. Pan Ke, has more than 20 years of experience in new drug research and development, management and entrepreneurship. Dr. Pan Ke is the project leader of the "12th Five-Year Plan" and "13th Five-Year Plan" major national science and technology project "Major New Drug Creation". He has served as a new drug research and development scientist at Pfizer and Johnson & Johnson . He is a former founding team member of Hutchison Whampoa (Shanghai) Pharmaceuticals. He serves as senior director and senior director of new drug chemistry research and patent protection. He participated in leading two projects into the US clinical practice. Later, he became executive director of the BD department and successfully established strategic partnerships with Procter & Gamble, Germany, Merck, and Eli Lilly. Dr. Pan participated in the listing of Hutchison Health Insurance Group in the UK in 2006, raising £40 million in the listing.
core management team has rich experience in the pharmaceutical industry.
Dr. Zhuang Chengfeng, Dr. Wang Tielin and others have more than 20 years of experience in the pharmaceutical industry. They have held important positions in multinational pharmaceutical companies such as Johnson & Johnson and Sanofi , and have rich experience in the field of innovative drugs. Mr. Jiang Xinming, vice president of marketing at
, has served in many well-known multinational pharmaceutical companies such as Pfizer and Batt . He has served as the sales and marketing director of France's Pierre Faber Pharmaceuticals in China and the marketing director of Roche. He has rich experience in product market development and market operation. An excellent management team is the foundation for supporting the company's future sustainable and stable development.
The actual controller of the company is Mr. Pan Ke. Through the direct holding , PAN-Scientific and employee shareholding platforms (Taizhou Donghong and Taizhou Yahong) to control 32.58% of the company's shares , and the equity structure is stable.
company owns eight wholly-owned subsidiaries of , , among which Shanghai Yahong and Zhejiang Yahong are mainly responsible for product research and development. Yahong Pharmaceutical is the production base of Taizhou , Cayman Yahong, Hong Kong Yahong, American Yahong, and Australia Yahong are responsible for the company's overseas operations, and Hainan Yahong is responsible for the company's product import and domestic distribution.
stock incentive plan stabilizes people's hearts and demonstrates the company's confidence in future development. Company launched the "2022 Restricted Stock Incentive Plan (Draft)" in July 2022 to improve long-term incentive measures and lay the foundation for the company's stable development.
The company builds three core technology platforms based on a complete and efficient R&D system and years of clinical R&D practice.
currently has three core technology platforms, namely Targeted Immunomodulation Normalization (TIMN), Prodrug and Precision Drug Delivery (PADD) and Targeted Protein Degradation (FASTac) based on molecular fragment assembly. The three major technology platforms provide strong impetus for the company's new drug discovery and pipeline development.
targeted immunomodulation normalization (TIMN):
① Target discovery, research and discover potential immunomodulatory targets and their effects, and develop targeted drugs for this target;
② drug screening, used to screen immunomodulatory agents and evaluate their efficacy and mechanism of action;
③ mechanism research, analyze the immunomodulatory effects of various subpopulations of cells in autoimmune disease tissues and tumor tissues in situ tumors and the immunomodulatory effects of cytokine .
prodrugs and precision drug delivery (PADD):
① Improve the PK/PD attributes of the drug, and improve the PK/PD attributes of the drug molecules through prescription processes such as slow-controlled release technology, solubilization technology, microemulsion drug-loading technology;
② Improve the route of administration, and improve patient compliance by changing the dosage form of the drug (such as injection to oral administration).
Targeted protein degradation (FASTac) based on molecular fragment assembly:
① Develop drugs with difficult targets, establish linker-E3 ligand molecular fragment library with high DMPK performance, and improve the drug properties of PROTAC/molecular gel molecules;
② Accelerate compound screening, and the established molecular fragment library can be applied to the design and screening of degrading agents of different target proteins, and accelerate the development of new degrading agents.
has not yet achieved profitability. The main reason is that the core products APL-1202 and APL-1702 have not yet achieved commercialization and continuous investment in the R&D end.
In 2021, the company achieved a net profit attributable to shareholders of -235 million yuan, basically the same as in 2020.
2019-2022H1 The company's R&D expenses are RMB 142/172/191/93 million respectively, which is the main part of the company's expenses.
The growth in R&D expenses mainly comes from the increase in clinical pipelines, the advancement of clinical progress and the growth of R&D personnel, among which the company's R&D personnel increased from 77 in 2020 to 126 in 2022H1.
As of June 30, 2022, the company owned nearly 3 billion yuan in cash and trading financial assets . Currently, the company has 2.892 billion yuan in cash and transactional financial assets. The company's total expenses in 2021 will be around 250 million yuan. It is expected that in the future, without additional financing for , with the continuous increase in R&D expenses and the increase in sales expenses, assuming that the annual expenses increase to about 500 million yuan, it can also ensure the company's normal operation for at least 5 years.
2 The company's core products are about to be launched and are expected to fill the market gap
APL-1202 (Wei Shike) is the first oral targeted treatment drug for non-muscular invasive bladder cancer (NMIBC) to enter a critical/phase III clinical trial.
APL-1202 is an anti-tumor new drug independently developed by Yahong Pharmaceutical after nearly ten years of in-depth research based on the introduction of patented technology from Johns Hopkins University in the United States.
is the world's first (First-in-Class) to enter a critical/phase III clinical trial in the field of anti-tumor, and has also been developed for preoperative neoadjuvant therapy of muscular invasive bladder cancer (MIBC).
APL-1202 The expansion of indications is progressing smoothly, and the applicable patient population will be further expanded.
Currently, the second-line treatment of APL-1202 combined with chemotherapy and single-line treatment of NMIBC have entered the clinical phase III stage; the second-line treatment of NMIBC combined with BCG in the United States has completed the clinical phase I; the adjuvant treatment of MIBC project combined with PD-1 has entered the clinical phase I in China and the United States.
2.1.1 The number of new cases of bladder cancer in China reached 86,000, with a growth rate higher than the global level
Bladder cancer ranks seventh among male malignant tumors and is one of the most common malignant tumors in the urinary system. Bladder cancer can occur at any age, even in children. The incidence rate increases with age, with a high incidence age ranging from 50-70 years old. The incidence of bladder cancer in men is 3-4 times that in women.
According to Frost&Sulliven statistics, the number of new bladder cancer cases worldwide in 2020 reached 573,000, and is expected to reach 651,000 in 2025, with an annual compound growth rate of 2.6%; the number of new bladder cancer cases in China in 2020 reached 86,000, and is expected to reach 101,000 in 2025, with an annual compound growth rate of 3.4%, which is higher than the global average.
The specific pathogenesis of bladder cancer has not been clarified, mainly affected by genetic and environmental factors. Among environmental factors, smoking and long-term exposure to industrial chemical products are the most certain pathogenic factors of bladder cancer at present. Others include long-term chronic inflammatory stimulation in bladder , long-term foreign body stimulation, etc.; the specific mechanism of genetic factors is still unclear. The oncogene known to be related to bladder cancer includes HER-2, HRAS, BCL-2, etc., or tumor suppressor genes P53, RB, P21, etc.
2.1.2 NMIBC As the main type of bladder cancer, the market space in the treatment field is sufficient
Non-muscular invasive bladder cancer (NMIBC) accounts for about 75% of bladder cancer. In 2020, the number of new cases of NMIBC worldwide was nearly 430,000. According to whether the tumor infiltrates the bladder muscle layer, it can be divided into non-muscular infiltrating bladder cancer and muscular infiltrating bladder cancer, among which NMIBC accounts for about 75% of bladder cancer.
According to Frost&Sullivan statistics, the number of new NMIBC cases worldwide in 2020 reached 430,000, and the number of new NMIBC cases in China reached 65,000. It is estimated that the number of new NMIBC cases worldwide in 2025 will reach 488,000, and China will reach 76,000.
Bladder cancer has a high recurrence rate after surgery, and the number of existing patients is huge. The recurrence rate of patients with bladder cancer within 5 years after surgery is as high as 60%, and the high recurrence rate causes the number of patients with bladder cancer to far exceed the number of new cases.
According to WHO statistics, the number of bladder cancer cases in China reached 235,000 in 2020, far higher than the number of new cases of bladder cancer. With the approval of first- and second-tier drugs for drug APL-1202 in the future, the domestic population of indication patients will reach about 300,000, with broad market prospects.
2.1.3 Weishike is expected to solve the clinical unmet needs of NMIBC
Weishike is expected to provide a new way for NMIBC treatment.
Currently, the main treatment method for NMIBC patients in clinical practice is to undergo chemotherapy/BCG perfusion after surgical cutting. The perfusion treatment process lasts for 1-2 hours, and the patient needs to constantly change positions to ensure full contact between the drug and various parts of the bladder. During this period, it is also necessary to endure the urge to urinate. The whole process is very painful and has great side effects.
oral administration methods that are unique to the patient are expected to greatly alleviate the patient's pain and improve patient compliance. Total bladder removal seriously affects patients' quality of life, and effective treatment methods are urgently needed in clinical practice to improve the possibility of patients retaining their bladder.
For high-risk NMIBC patients, the treatment method of total bladder is usually clinically treated. Patients need to wear urine bags for a long time after the operation, which will put great pressure on the patient's subsequent life and psychology.
APL1202 The clinical trial of
APL1202 combined with chemotherapy with second-line treatment of NMIBC and single-agent treatment of NMIBC has entered the phase III stage, which is expected to further slow down the progress of bladder cancer and increase the possibility of patients retaining their bladder.
2.1.4 NMIBC therapeutic drugs are difficult to develop, and international blockbuster anti-cancer drugs hit a wall
Msday Keytruda (K drug) has been approved by the FDA for the treatment of high-risk NMIBC patients, but the results are not good and have not been widely used. In January 2020, the FDA approved K drug for the treatment of patients with NMIBC who are not eligible for cystectomy or who have chosen not to undergo cystectomy.
According to the clinical results of K drug multicenter single arm phase II, among the 96 high-risk NMIBC patients, 39 patients achieved complete remission, with a complete remission rate of 41%.
Among the 39 patients who achieved complete remission, 46% of the patients had a response time of more than 12 months, accounting for only 19% of the total number of patients, which was below 30% of the recommended criteria.
In the first half of 2022, K drug sales reached US$10.061 billion, accounting for the fourth largest global drug sales.The current approved indications of K drug include non-small cell lung cancer , small cell lung cancer , liver cancer , esophageal cancer, melanoma, gastric cancer , cervical cancer , etc.
APL-1202 "perfusion" treatment through unique metabolic characteristics.
APL-1202 The target is methionamide peptidase (MetAP2). MetAP2 can resect the N-terminal methionine of the newly synthesized protein in cells, which is the basis for protein synthesis of . APL-1202 inhibits MetAP2 to achieve the purpose of blocking protein synthesis. APL-1202 can be rapidly metabolized in the body and delivered to the bladder through urine, which can then accumulate in the bladder to achieve therapeutic effects.
2.1.5 Only the treatment can have significant clinical efficacy and good safety
APL-1202 Phase II results show that the recurrence rate in 1 year reached 51.3%, and no myometrial progress occurred within 1 year. Compared with chemotherapy perfusion therapy, APL-1202 treatment significantly improved the recurrence-free rate within 1 year (51.3% vs 35%), with a median recurrence-free survival of more than 15 months, and no progression within 1 year.
APL-1202 is safe and helps to reduce the pain during the treatment process and improve patient compliance. APL-1202 did not have serious drug-related adverse events (SAEs) during the treatment phase, with higher incidence of drug-related adverse events including gastrointestinal disorders (4.88%) and transient liver dysfunction (4.88%).
2.1.6 The competition pattern is becoming fierce, and the company's progress is at the leading position
APL-1202 R&D progress is at the leading position, and the first-line treatment and medication pattern is good. As of July 2022, China NMIBC has 7 products under development, including three oral drugs, two bladder perfusion drugs and two injectable drugs. Among them, the bladder perfusion drugs of Qilu Pharmaceutical and the PD-1 antibody injected with Pfizer are in the clinical phase III stage, and only Pfizer's products can be used for first-line treatment of NMIBC. In the future, the approval of APL-1202 first-line medications is expected to replace bladder perfusion chemotherapy/BCG, and there is sufficient potential market space. The entry of
competitors will help improve the market's awareness of oral drugs and increase the market penetration rate of . Both BMS and Janssen Pharmaceutical are in the clinical phase II stage. After subsequent marketing, it will help expand the share of oral drugs in the NMIBC market, improve the awareness of doctors and patients, and help further expand the sales of the company's products.
Xiweita (APL-1702) is an photodynamic treatment product integrating drugs and devices, and is currently in the clinical stage III stage. APL-1702 is a product introduced by the company from Photocure, mainly used to treat high-grade squamous intraepithelial lesions (HSILs) in the cervix that include all HPV virus subtype infections. When treating
, the doctor applies a drug ointment to the instrument device and places the device at the patient's cervix. The drug is absorbed by the lesion cells and metabolized into molecules used for photodynamic therapy within a preset period. The process lasts for about 5 hours. After that, the built-in light source of the product will automatically turn on. The activated photodynamic therapy molecules will kill the tumor cells through chemical reactions, thus having a therapeutic effect. The photoactivation therapy process lasts for about 4.6 hours.
After completing the set time light, the built-in light source will automatically turn off and the treatment process will be over. The patient can move freely throughout the treatment period, and the patient can remove the device by himself after the treatment is over. The total treatment process lasts for about 10 hours.
photodynamic therapy has the advantages of convenient administration and absorption, small environmental limitations and good patient compliance. Currently, HSIL treatment methods are mainly surgery. Traditional surgical treatments include two methods: cervical ring electroresection and cold-cut conical resection. They have the risks of bleeding, infection, cervical organic injury, premature birth , and miscarriage. In comparison, the non-surgical treatment methods of APL-1702 can effectively protect the patient's cervical function and have significant advantages in terms of safety.
2.2.1 The International Multicenter Phase III clinical trial successfully conducted
photodynamic therapy is a therapy based on the accumulation of photosensitizers in target cells that produce a large amount of reactive oxygen under light, thereby inducing apoptosis and necrosis of lesion cells.
Specifically, the active ingredient 5-aminoketovalerate (HAL) of APL-1702 is decomposed into ALA after entering the cell. ALA can be converted into photoactive porphyrin (PAP) in the cell. After light irradiation at a specific wavelength, PAP acts with tissue oxygen to generate reactive oxygen, which can induce apoptosis and necrosis of the lesion cell. The cells release HPV antigen during the apoptosis process, thereby helping to kill infected HPV cells. The results of the clinical phase II trial of
APL-1702 are in line with expectations and have significant efficacy. According to the results of the clinical phase II trial released by the company, APL-1702 has a good HSIL response rate (76% vs 28%) and HPV infection clearance rate (58% vs 34%) compared with the placebo group. As of July 2022, the international multicenter clinical enrollment of APL-1702 has completed all subjects.
2.2.2 Women have a high risk of HPV infection, and there is sufficient potential market space
In a woman's life, the probability of infection with the high-risk HPV of is more than 70%, of which less than 10% of women develop cervical cancer or cervical intraepithelial neoplasia (CIN). The main reason is that 80% of women have transient HPV infection.
The risk factors for cervical cancer are mainly two categories. One is the biological factor of , namely, the persistent infection of high-risk HPV; the other is exogenous behavioral risk factors, such as adverse sexual behavior, early marriage, early childbirth, poor menstrual hygiene, smoking, oral contraceptive pills, and immunosuppressive diseases. HSIL includes moderate and high cervical intraepithelial neoplasia.
Cervical intraepithelial neoplasia (CIN) is the precancerous lesion of the cervix , which is the intermediate stage in the development of HPV infection into cervical cancer.
Cervical intraepithelial neoplasia is usually divided into three levels, namely low-grade intraepithelial neoplasia (CIN1), moderate intraepithelial neoplasia (CIN2) and high intraepithelial neoplasia (CIN3). CIN at all levels may progress to cervical cancer, and the higher the level, the greater the risk.
About 20% of HSIL populations may progress to invasive cervical cancer within 10 years, and no non-surgical treatment products are available worldwide.
A normal cervix will gradually develop into low-grade cervical intraepithelial neoplasia after infection with HPV. After cell differentiation, it will further develop into high cervical intraepithelial neoplasia. The patient will gradually develop cell carcinoma without treatment, and eventually progress to cervical cancer. The survival rate of cervical cancer patients in 3-5 years is less than 50%, with the death toll of about 53,000 per year, accounting for 18.4% of all female malignant tumor deaths.
2.2.3 The number of people with cervical cancer risks is huge, and treatment needs are strong
Reasonable and effective screening methods are the key to early detection of precancerous cervical lesions.
According to the recommendation of the cervical cancer diagnosis and treatment guidelines (2022 edition), cervical/vaginal cytology smear examination and HPV detection are initial screening methods for early cervical cancer and precancerous lesions (CIN). Currently, cervical fluid-based thin-layer cytology examination (TCT) is mainly used.
With the increase of people's health awareness and the popularization of cervical cytology screening, more and more HPV infected patients will be detected in their pre-cancer phase, and it is expected that the number of HPV infected patients found in the examination will continue to increase.
According to Frost&Sulliven statistics, the number of HSIL infected globally reached 14 million in 2020, and is expected to increase to 16 million in 2030; the number of HSIL infected in China reached 2.1 million in 2020, and is expected to increase to 2.2 million in 2030. With the increase in people's health awareness and the popularity of cervical cytology screening, more and more HPV patients will be detected in their precancerous stages, and there is plenty of room for HSIL treatment.
2.2.4 HPV vaccine has little impact on the market in the short term, and the market space will be further expanded
HPV vaccination has not yet entered National Immunization Program , and the HPV vaccination rate will not increase significantly in the short term. In July 2022, the National Health Commission pointed out that it will focus on promoting regions with mature conditions to take the lead in introducing free HPV vaccination policies.
Currently, only Guangdong, Hainan and Fujian provinces have implemented free vaccination of domestic bivalent HPV vaccines for girls of appropriate age across the province. In addition, 6 cities including Wuxi, Jiangsu and Jinan, Shandong have launched free or subsidized vaccination for HPV vaccines. Therefore, at present, the domestic HPV vaccine still covers only a small number of areas, and the possibility of achieving large-scale coverage in the short term is relatively small.
In recent years, the rapid increase in the number of HPV vaccinations has little impact on the market in the short term. The batch issuance of HPV vaccines in China has shown rapid growth since 2017, while the ages of 17-24 and 40-44 are the two peak age groups for HPV infection in women in my country. The vaccination rate among women at the high-risk age group will be lower, and the coverage effect of HPV vaccines will not be reflected in the short term.
Cervical cancer screening covers a small population. It is expected that with the popularity of cervical cancer screening, the patient population will further expand. According to WHO statistics, in 2019, among women aged 30-49, only 29% of those who have undergone cervical cancer screening in the past five years were still considered. Most women have not received cervical cancer screening. With the increase in people's health awareness and the popularity of cervical cytology screening, more and more HPV patients will be detected in their pre-cancer stages. It is expected that the number of HPV patients infected with the examination will continue to increase.
2.2.5 The competitive landscape in the treatment field is good, and it is expected to take the lead in occupying the market to form a differentiated advantage
APL-1702 The research and development progress is in the leading position. As of July 2022, there are only three drugs used to treat HSIL or CIN2/3 in the R&D stage, two of which are photodynamic therapeutic drugs, namely the company's APL1702 and Fudan Zhangjiang 's ammonia valeric acid (ALA).
Alamellovaleric acid hydrochloride (ALA) is a Fudan Zhangjiang industrialization project and is a photodynamic drug for genital warts . Compared with traditional therapies, ALA treatment regimens have significantly reduced the recurrence rate of genital warts and have become the first choice for clinical choice.
ALA New indication development includes cervical precancerous lesions, severe acne, brain glioma, etc. Among them, clinical trials used to treat cervical precancerous lesions are in the clinical phase II stage.
ABC-3100 is a DNA immunotherapy targeting the E6/E7 protein of HPV-
ABC-3100 DNA plasmid is introduced into human cells through an electro-rotation gun to encode antigens, activate the human immune system, and achieve the purpose of clearing HPV virus. According to clinical phase IIb results, ABC-3100 can effectively clear virus (82% vs 45%).
3 Commercial layout - integrated diagnosis and treatment solution
Company layout integrated diagnosis and treatment solutions, and the synergistic effect between products is conducive to enhancing patient stickiness.
company has built an advantageous product portfolio covering bladder cancer diagnosis, treatment and follow-up to solve unmet clinical needs and provide full-cycle solutions for doctors and patients.
Company's company's products include disposable soft cystoscopy (APLD-2101) and developer drugs (APL-1706), covering cystoscopy and pathological biopsy in the diagnosis stage, transurethral bladder tumor resection (TURBT) in the treatment stage and cystoscopy in the follow-up stage.
company independently built the "Biyihui" online doctor service platform, providing doctors with full-course management services through a combination of online and offline models.
Company has now established the company's first integrated bladder cancer diagnosis and treatment center in Hainan Provincial People's Hospital , laying the foundation for the company's subsequent successful promotion of commercialization.
Hakway® (APL-1706) is a new generation of fluorescent developer and is the only developer drug approved for diagnosis or surgery of bladder cancer.
Company introduced the exclusive registration and commercialization rights of APL-1706 in mainland China and Taiwan from Photocure in 2021, and was established in Boao Lecheng, Hainan, and has completed the first patient surgery. In March 2022, the CDE approved the inclusion of APL-1706 into a pilot application of drug clinical real-world data.
APL-1706 is a new generation of fluorescent developer, whose active ingredient is hexyl 5-aminoketovalerate (HAL). When used, the doctor dissolves APL-1706 into buffer and perfuses it into the patient's bladder. After the developer is highly selectively absorbed by the tumor tissue, under specific blue light, the tumor lesions will clearly show a significantly different red fluorescence from the normal tissue, assisting the diagnosis and surgical resection under cystoscopy.
APL-1706 can effectively improve the detection rate of bladder cancer and help improve the efficiency of the entire process of diagnosis, treatment and follow-up.
cystoscopic biopsy pathology is the gold standard for diagnosing bladder cancer. Studies have shown that compared with the most commonly used white cystoscopy, the detection rate of bladder cancer by APL-1706 and blue cystoscopy can be increased by 20%-30%, especially for carcinoma in situ, the detection rate is more significant.
More studies have shown that the recurrence rate of patients undergoing surgery under APL-1706 and blue cystoscopy is 16% lower than that of white cystoscopy.
APL-1706 product has been launched in more than 30 countries and has shown good safety and effectiveness in many years of clinical applications. It has been recognized by various national drug administrations, major guidelines and well-known expert organizations.
products are used as first-line medications for bladder cancer diagnosis in NMIBC guidelines recommended by the European Association of Urology (EAU), American Association of Urology (AUA), and the National Institute of Health and Clinical Optimization (NICE). Currently, the country is in the clinical stage III.
disposable soft cystoscopy has the advantages of small damage, good comfort, no blind spots in the field of vision, high safety and low cost.
APLD-2101 is a fully functional integrated design disposable soft cystoscope introduced by the company from UroViu, the United States.
has little damage and good comfort: metal hard cystoscopy will cause inevitable damage when passing through the urethra, while the soft cystoscopy lens is soft, has a thin tube diameter and is bent. There is only a slight discomfort after entering the urethra, which greatly improves the patient's compliance.
No blind spots in the field of vision: Due to the limitation of the observation angle, there is a certain blind spot in the field of vision, while the soft mirror can be bent upward by 210° and downward by 130°, which increases the field of vision and reduces the rate of missed tumor diagnosis.
has high safety: hard lenses have the risk of cross infection during reuse, and a one-time use method can minimize the risk.
has high convenience and low cost: Compared with desktop cystoscopy, the integrated design of disposable cystoscopy improves the convenience of doctors during use, and also reduces the cost of purchasing desktop cystoscopy in the hospital.
4 Profit forecast and valuation
Company’s two core products are in phase III clinical, assuming that the risk of R&D to be listed is 90%.
Considering that there is no oral targeted drug on the field of bladder cancer treatment, the company needs to gradually expand the market after it goes public. Therefore, assuming that the market share of APL1202 will be 0.5% in 2024, and will grow to 30% in 2032, and will remain unchanged afterwards.
APL-1202 The treatment cost is based on the common pricing experience of innovative drugs, assuming it is 100,000 yuan, and it will be reduced to 50,000 yuan after entering medical insurance.
Consider that there is no drug on the market in the HSIL treatment field. After the company goes public, it needs to gradually expand the market. Therefore, assuming that the market share of APL-1702 will be 0.2% in 2024 and will grow to 20% in 2033. The annual treatment cost of
APL-1702 is assumed to be 30,000 yuan, and it will be maintained at 15,000 yuan after entering medical insurance. Assuming that the company's net profit margin remains at 25%, the value of WACCh is 15%.
core commercialization/latest pipeline products adjusted for sales peak after POS We predict that APL-1202 products will be commercialized in 2024, and the sales in 2024 to 2026 will be 122/252/519 million yuan, respectively, with growth rates of -/106.12%/105.94% respectively.
As the aging process accelerates, the number of new bladder cancer patients increases by 2,000 each year, and the APL-1202 market share peaked in 2032, accounting for 30%. After APL-1202 is launched, it will reduce the price by a small amount every two years after the medical insurance price is implemented in 2025.
predicts that APL-1702 products will also be commercialized in 2024, with sales expected to be RMB 128/323/648 million from 2024 to 2026, with growth rates of -/151.17%/100.93% respectively. The number of new HSIL patients increases by 10,000 per year, and the APL-1702 penetration peaks in 2033, accounting for 20%.
DCF Core Assumption: comprehensively considers the company's long-term growth prospects and subsequent pipeline development and operation risks. We give the 12% WACC assumption and the 2% perpetual growth rate assumption in the DCF model, which is consistent with the biotech companies we cover.
Revenue: is expected to generate revenue in 2024, mainly driven by newly listed products;
Net profit margin: refers to the net profit margin level of innovative drug companies. After the product is commercialized, the general net profit margin level will remain at around 25%.
valuates the company through the DCF model, with the core products APL-1202 and APL-1702 being valuated to 4.653 billion yuan, other pipelines being 1.5 billion yuan, and the company has 2.892 billion yuan in cash, which was the company's overall valuation in 2022 of 9.045 billion yuan.
5 Risk warning
5.1 The commercialization of core products is less than expected
The company's main products are still in the R&D stage and have not formed actual sales. The company's R&D investment is high and the product cycle is long. It is difficult for core products to be listed in the short term. The company will be in a loss state in the near future.
5.2 APL-1202, APL-1702 Product R&D risks
The company's product and technology research and development risks are at risk of R&D failure and R&D progress is not as expected. There is uncertainty as to whether the commercial application of R&D results can be finally achieved.
5.3 Industry competition intensifies risks
Due to the trend of aging, the demand for the biopharmaceutical market has increased and the market development prospects are improving, which may have attracted a large number of companies to enter, and industry competition has also intensified. If the company cannot launch cost-effective products in time and provide high-quality services in the industry competition, then the company's operating performance may be affected.
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