【行业研究报告】信达生物-More than obesity

22Mar2024CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdateInnoventBiologics(1801HK)MorethanobesityStrongproductsalesinFY23.InFY23,InnoventrecordedtotalrevenueofRMB6.21bn,includingRMB5.73bnproductsalesrevenue(+38.4%YoY),inlinewithRMB6.21bn,includingRMB5.73bnproductsalesrevenue(+38.4%YoY),inlinewithourexpectation.Innoventhadastrong2H23,withproductsales+33.1%HoHvsthefirsthalf.AsperEliLilly,totalsalesofsintilimabinFY23reachedUS$393.3mn(RMB2.75bn),+34.0%YoY,thankstotheextensionofNRDLcoveragewithstablepricing.WeforecastsalesofsintilimabtoreachRMB3.29bnin2024E(+19%YoY)andexpectthedrugtomaintainitsleadingpositioninChina’sPD-(L)1market.SharpdecreaseinEBITDAlossthankstoimprovingcostefficiency.Thenon-IFRSEBITDAlossnarrowedsignificantlyby73%YoYtoRMB600mninFY23.Withfast-growingproductsalesandconsistentlyimprovingoperatingefficiency,Mgt.isconfidenttoachieveEBITDAbreakevenin2025E.Innovent’sgrossmarginonproductsalesreached80.7%in2H23(vs79.5%in1H23and77.5%in2022).SG&Aratiodroppedto60.9%in2H23from63.5%in1H23.FY23R&Dexpensesdecreased22.4%YoYtoRMB2.23bn,whileMgt.expectssteadyR&DexpensesinFY24.Asofend-2023,InnoventhadastrongcashbalanceofRMB11.0bn.ExpectpositivePoCdatareleaseforCLDN18.2ADC.Innoventhasarichportfolioofclinical-stageADCassets,includingADCstargetingCLDN18.2,HER2,HER3,B7H3,andTROP2.Severalbi-specificADCswillenterclinicaltrialsthisyear,includingtheEGFR/B7H3ADC.IBI343(CLDN18.2ADC)isleadingglobaldevelopmentofCLDN18.2ADCwithBICpotential.InnoventplanstostartaPh3MRCTtrial(NCT06238843)ofIBI343in3LGCshortly,followinginthefootstepsofAstraZeneca/Keymed'sCMG901,whichrecentlylaunchedaPh3MRCTin2L+GC(CTR20240730).PositivePh1bPoCdataforIBI343ingastriccancerareanticipatedtobereleasedin2024,alongwithinitialPoCdatainpancreaticcancer.InnoventisalsoexploringthepotentialofIBI343incombowithitsownPD-1sintilimabandVEGFR-2ramucirumabfor1Land2LGC.WethinkIBI343hasglobalBICpotentialduetoitssuperiorsafetyandsatisfyingefficacy.IBI343’sRP2Ddoseisashighas6mg/kg,suggestingabroadtherapeuticwindow.MovingfromglobalBICtoFIC.IBI363isaprospectiveFICPD-1/IL-2bsAbwithadifferentiatedα-biasedIL-2arm,distinctfromotherIL-2mAbsthateliminatethereceptorα(link).IBI363showedpromisingefficacysignalsinIO-resistantandcoldtumours.WeexpectInnoventtoreleasepositivePoCdataofIBI363inIO-resistantmelanoma,NSCLC,and3L+CRCin2024.InnoventplanstostartaPh2studyofIBI363intheUSin2024.Inaddition,manyinnovativebi/tri-specificantibodieshaveenteredclinic,includingCLDN18.2/CD3,EGFR/B7H3,GPRC5D/BCMA/CD3,etc.Multipleblockbusternon-oncologyassets.Besidestheblockbusterproductmazdutide(GLP-1R/GCGR),whichisunderNDAreviewinChinaforobesitysinceFeb2024,Innoventhasmultipleblockbusternon-oncologyassets.IBI112,anIL-23p19antibody,isexpectedtoreleasethePh3datainpsoriasisandsubmitNDAin2024.InthePhase2study,atweek52,upto86%ofpatientsintheIBI112armachievedPASI90,aresultcomparabletothe84%forguselkumab(anotherIL-23p19mAb)andsuperiortothe70%forsecukinumab(anIL-17mAb)atweek48(link).Withadosingintervalof12weekscomparedtoguselkumab's8weeks,IBI112showsBICpotentialforpsoriasistreatment.WebelieveIBI328(XOI)andIBI311(IGF-1R)alsohaveblockbusterpotential.MaintainBUY.WereviseourDCF-basedTPfromHK$57.35toHK$55.00(WACC:10.3%,terminalgrowthrate:4.0%)