Innovative drugs are full prospects for next year

Innovative drugs are the most flexible industry in the pharmaceutical landscape, and unexpected catalysts always make stock prices bloom.

Akeso ushered in a moment of qualitative change, and the listing on the Science and Technology Innovation Board will completely solve the main shortcoming of lack of money, and the maximum transaction amount of 5 billion US dollars to authorize the dual antibody Evoxi (PD-1/VEGF, AK112) is the icing on the cake.

After the financial level is worry-free, the probability of Akeso growing into Biopharma has greatly increased.

2023 is coming, and we can expect more catalysts for more innovative pharmaceutical companies.

Today, we will comprehensively sort out the important nodes of innovative pharmaceutical companies in 2023. The sea is still in the stage of accumulating power, and BeiGene is still riding the dust, and it will only witness more blossoms in 2024. In terms of commercialization of domestic innovative drugs, it presents an overall positive situation.

Innovative drugs will go to sea next year

The License-out model of innovative pharmaceutical companies has already rolled over the heat wave, constantly refreshing the record of authorized amount, but so far only BeiGene's zebratinib has been successfully going overseas.

Zebratinib challenged ibrutinib head-to-head in a global phase 3 to achieve PFS efficacy results and was recommended at the highest level of NCCN guidelines.

This suggests two paths: to prove one's own best-in-class (BIC), not by lip service, but by action; To open the door to the sea, there is no shortcut, you can only break in.

So, we see Akeso AK112 challenge K drug head-to-head.

Zebratinib global sales totaled $1.065 billion in Q3 this year, up 25.1% sequentially, still in the early stages of climbing, and the largest indication has not yet been unlocked, and CLL/SLL listing applications have been submitted in the United States (updated resolution target date is January 2023) and Canada.

According to CICC, with the expansion of new indications overseas, zebratinib is expected to achieve a risk-adjusted sales peak of RMB 14.2 billion worldwide in 2028. Zhongtai Securities expects that with the entry of the large indication CLL/SLL into the NCCN guidelines and the approval in Europe and the United States, the global sales of zebratinib are expected to exceed US$3 billion.

Hengrui Pharmaceutical's international multi-center phase 3 trial of carrelizumab (PD-1) in combination with apatinib for the treatment of advanced liver cancer has reached the end point, and will submit a BLA to the FDA next year, hoping to compete for a breath.

Hutchison fruquintinib is a potent and highly selective VEGFR inhibitor, which has better competitive advantages in efficacy and safety than similar products, and the international multi-center registration clinical study FRESCO-2 has reached the primary endpoint of OS and the secondary endpoint of PFS, and is expected to successfully go overseas.

Ditze Pharma's EGFR inhibitor suvortinib has been recognized as the world's first Sino-US double "breakthrough therapy" in the field of lung cancer, and is expected to submit a marketing application to the FDA next year. The JAK inhibitor golixitinib has been certified by the FDA as a "fast track" and is expected to submit a marketing application to China and the United States next year.

CARsgen Pharmaceutical's core variety CT053 (BCMACAR-T), with amazing efficacy and safety data, is carrying out phase I.b/II. clinical trials in North America, and is expected to submit BLA to the FDA next year.

As companies gradually move towards source innovation and differentiation, coupled with the improvement of policies and payment environment, we can expect a pharmaceutical bull market. Next year, the industry will enter a mature and rational stage, the bubble will fade, the leader will be more certain, and it will return to the main line of investment head.

Hong Kong stocks are the base camp of innovative drugs and will surely share the dividends of this era. The Hang Seng Pharmaceutical ETF (159892) includes the top pharmaceutical stocks in Hong Kong, and (mentioned in this article) CSPC Pharmaceutical Group, China Biopharma, BeiGene, Innovent Biologics, Zai Lab and Akeso are all constituents.

The Hang Seng Pharmaceutical ETF also covers CXO head WuXi Biologics, WuXi AppTec, GenScript Ray, Kanglong Chemical, and Tigermed Pharmaceutical, which will benefit from the recovery of the innovative drug industry chain, and also covers Internet medical leaders Ali Health and JD Health, which will benefit from the optimization of epidemic prevention measures.

Most people invest in Hong Kong pharmaceutical stocks, and the safest choice is ETF funds (159892 Hang Seng Pharmaceutical ETF). With the optimization of epidemic prevention and control and the marginal slowdown of US CPI growth, the two major factors that suppressed the valuation of Hong Kong stocks showed an improvement trend, and Hong Kong stocks entered a recovery stage.

Some innovative drugs that are expected to be launched in China next year

Next year, about 30 heavy domestic new drugs will be launched, commercialization will enter the blowout stage, the new generation of innovative pharmaceutical companies can form a relatively complete product matrix, reflecting the compounding effect of synergistic combination, while traditional pharmaceutical companies can increase the proportion of innovative drug revenue, transformation to an inflection point.

It is expected that Hengrui Pharmaceutical's Q4 performance will bottom out this year, and innovative drugs revilumide, dalcilib and Henggliflozin will participate in medical insurance negotiations for the first time.

Next year will be a turning point for Hengrui Pharmaceutical, with the cumulative number of innovative drugs listed exceeding 15, and the proportion of innovative drug revenue is expected to exceed 50%.

Innovent will usher in a big year of commercialization, with new exclusive product volumes, ramolurumab and sepreptinib will begin to contribute increments next year, orebatinib and pemitinib sales are still climbing, and it is expected to commercialize PCSK9 and BCMA-CART in the first half of next year.

Zai Lab's world-class drug Efgartigimod will enter the commercialization stage as soon as next year, with the potential to expand single-variety and multi-indication, including generalized myasthenia gravis (gMG), primary immune thrombocytopenia (ITP), chronic inflammatory demyelinating polyradiculoneuropathy (CIDP) and pemphigus, and the clinical indications are expected to cover about 700,000 patients with various severe self-exemptions in China.

CSPC has submitted 5 products for marketing in China, including norvenlafaxine, irinotecan liposomes, RANKL, albumin paclitaxel II and Mingfule. In the next 5 years, the company expects 30+ new products to be approved for marketing one after another.

China's biopharmaceutical goal is to exceed the 10 billion yuan mark in innovative drug revenue by 2023.

Jingxin Pharmaceutical's first innovative drug, Darsinid, is about to come out, reflecting the differentiated efforts of third-tier pharmaceutical companies to expand their living space. Compared with similar drugs, didacinib capsules are a class 1 small molecule new drug for the treatment of insomnia disorders, which has less impact on the adverse reactions of movement disorders, sequelae, tolerance, ethanol interaction, body dependence, and memory impairment, which is conducive to improving patients' medication compliance.

Be optimistic, the winter of innovative drugs may pass unknowingly.