20211229-招银国际-开拓药业-B-09939.HK-Continue_to_pursue_the_development_of_proxalutamide_for_treatment_of_COVID-19_5页_891kb

Kintor Pharmaceutical (9939 HK) Summary

Core Content

Kintor Pharmaceutical (9939 HK) is a biopharmaceutical company that is continuing its development of proxalutamide for the treatment of COVID-19. The company is conducting multiple phase 3 MRCT trials to evaluate the drug's efficacy and safety.

Key Trial Information

• Outpatient Trial (NCT04870606):

  • Interim analysis did not meet the primary endpoint due to a limited number of hospitalization events.
  • Positive efficacy trend was observed in the treatment group.
  • No safety concerns or drug-related serious adverse events were reported.
  • The Independent Data Monitoring Committee (IDMC) suggested amending the trial protocol to include more high-risk outpatients with multiple comorbidities or no vaccination history.
  • Kintor plans to seek US FDA consent for the amendment and will enroll more at-risk patients.

• Other Trials:

  • NCT04869228: Another outpatient trial with a different primary endpoint (percentage of subjects requiring oxygen by day 28).
  • NCT05009732: An inpatient trial for COVID-19 is also ongoing.

Challenges and Adjustments

• Kintor's aggressive study design and US-only patient enrollment have made it difficult to show statistical differences.
• Compared to other drugs like PAXLOVID and Molnupiravir, Kintor's trial includes vaccinated patients and low-risk individuals, which may lower the chances of meeting endpoints.
• The placebo hospitalization rate in Kintor's trial was 0%, while in PAXLOVID and Molnupiravir trials, the placebo groups had 6.4% and 9.7% hospitalization rates, respectively.
• The amendment to the trial protocol is expected to improve the probability of success.

Main Points

• Interim Results: The outpatient trial did not meet the primary endpoint, but a positive efficacy trend was noted.
• Safety: No safety concerns or drug-related serious adverse events were reported.
• Trial Adjustments: IDMC suggested enrolling more high-risk patients, which Kintor is planning to implement with US FDA approval.
• Comparison with Other Drugs: Kintor's trial design is more inclusive, which may affect the statistical power and success chances.
• Market Position: The company is still pursuing the NDA filing for Pyrilutamide for androgenetic alopecia by the end of 2022.

Key Information

• Equity Research Rating: BUY (Maintain)

• Target Price (HK$): 35.22 (Previously: 98.07)

• Price Performance:

  • 1-month: -21.1%
  • 3-month: -13.2%
  • 6-month: -23.5%

• Market Capitalization (HK$ mn): 5,194

• Shareholding Structure:

  • Management: 24.30%
  • CloudAlpha: 8.64%
  • Gree: 6.77%
  • Others: 60.29%

• Financial Highlights (RMB mn):

  • Revenue: 0 (FY19A), 0 (FY20A), 0 (FY21E), 23 (FY22E), 1,019 (FY23E)
  • Attributable Net Profit (Loss): -233 (FY19A), -508 (FY20A), -682 (FY21E), -718 (FY22E), 254 (FY23E)
  • R&D Expenses: -214 (FY19A), -329 (FY20A), -600 (FY21E), -630 (FY22E), -400 (FY23E)
  • EPS (RMB): N/A (FY19A), -1.64 (FY20A), -1.76 (FY21E), -1.85 (FY22E), 0.65 (FY23E)
  • ROE (%): -63 (FY19A), -34 (FY20A), -38 (FY21E), -68 (FY22E), 19 (FY23E)
  • ROA (%): -42 (FY19A), -27 (FY20A), -32 (FY21E), -54 (FY22E), 15 (FY23E)

• Valuation and DCF:

  • DCF Valuation (RMB mn):
    • 2021E: -695
    • 2022E: -726
    • 2023E: 296
    • 2024E: 355
    • 2025E: 850
    • 2026E: 1,108
    • 2027E: 1,400
    • 2028E: 1,759
    • 2029E: 2,079
    • 2030E: 2,435
  • Terminal Value (RMB mn): 22,322
  • Equity Value (HK$ mn): 13,650
  • Terminal Growth Rate: 2.0%
  • WACC: 10.7%

• Sensitivity Analysis (HK$):

  • Terminal Growth Rate:
    • 3.0%: 46.79
    • 2.5%: 44.15
    • 2.0%: 35.22
    • 1.5%: 32.49
    • 1.0%: 30.07

Financial Statements

Income Statement (RMB mn)

• Revenue: 0 (FY19A), 0 (FY20A), 0 (FY21E), 23 (FY22E), 1,019 (FY23E)
• Cost of Sales: 0 (FY19A), 0 (FY20A), 0 (FY21E), -5 (FY22E), -194 (FY23E)
• Gross Profit: 0 (FY19A), 0 (FY20A), 0 (FY21E), 18 (FY22E), 826 (FY23E)
• R&D Expenses: -214 (FY19A), -329 (FY20A), -600 (FY21E), -630 (FY22E), -400 (FY23E)
• Operating Profit (Loss): -229 (FY19A), -505 (FY20A), -673 (FY21E), -709 (FY22E), 307 (FY23E)
• Pre-tax Profit (Loss): -233 (FY19A), -508 (FY20A), -682 (FY21E), -718 (FY22E), 299 (FY23E)
• Net Profit (Loss): -233 (FY19A), -508 (FY20A), -682 (FY21E), -718 (FY22E), 254 (FY23E)

Cash Flow Summary (RMB mn)

• Operating Cash Flow: -228 (FY19A), -381 (FY20A), -671 (FY21E), -753 (FY22E), 179 (FY23E)
• Investing Cash Flow: -7 (FY19A), -440 (FY20A), -100 (FY21E), -100 (FY22E), -100 (FY23E)
• Financing Cash Flow: 296 (FY19A), 1,780 (FY20A), 950 (FY21E), 0 (FY22E), 0 (FY23E)
• Net Change in Cash: 61 (FY19A), 960 (FY20A), 179 (FY21E), -853 (FY22E), 79 (FY23E)
• Cash at the End (RMB mn): 196 (FY19A), 1,065 (FY20A), 1,245 (FY21E), 392 (FY22E), 471 (FY23E)

Balance Sheet (RMB mn)

• Total Net Assets: 370 (FY19A), 1,508 (FY20A), 1,776 (FY21E), 1,058 (FY22E), 1,312 (FY23E)
• Current Ratio (x): 2 (FY19A), 8 (FY20A), 10 (FY21E), 8 (FY22E), 6 (FY23E)
• Shareholders' Equity: 370 (FY19A), 1,508 (FY20A), 1,776 (FY21E), 1,058 (FY22E), 1,312 (FY23E)

Key Ratios

• Gross Margin: N/A (FY19A), N/A (FY20A), 80% (FY21E), 80% (FY22E), 81% (FY23E)
• ROE (%): -63 (FY19A), -34 (FY20A), -38 (FY21E), -68 (FY22E), 19 (FY23E)
• ROA (%): -42 (FY19A), -27 (FY20A), -32 (FY21E), -54 (FY22E), 15 (FY23E)
• EPS (RMB): N/A (FY19A), -1.64 (FY20A), -1.76 (FY21E), -1.85 (FY22E), 0.65 (FY23E)

Analyst Ratings

• CMBIS Rating: BUY
• Potential Return: Over 15% over the next 12 months

Disclosures and Disclaimer

• This report is not investment advice and should not be relied upon for investment decisions.
• CMBIS does not provide tailored advice and does not guarantee the accuracy or completeness of the information.
• The report is intended for specific investors only and may not be distributed to others without prior consent.
• The company is a wholly owned subsidiary of China Merchants Bank.