20231101-招银国际-荣昌生物-09995.HK-Strong_growth_amid_challenging_environment_5页_1mb

Financial Performance in 3Q2023
RemeGen achieved strong revenue growth of HK$347 million, up 37% quarter-on-quarter and 58% year-on-year, driven primarily by RC18. The gross margin improved to 76.3%, and SG&A expenses decreased as a percentage. Net loss narrowed to HK$327 million from HK$380 million in the previous quarter.

Product Developments

• RC18 sales reached approximately HK$180 million in 3Q23, with a 45% quarter-on-quarter increase, and RC48 sales also grew significantly. Key advancements include regulatory filings and clinical trial progress for RC18 in autoimmune diseases outside China and global expansion.
• RC48 is focused in the US for ulcerative colitis, with partnerships and trial completions. Third-party payer negotiations were completed for this product.

R&D and Expansion Updates
RC18 is advancing in autoimmune trials globally, including US and European markets, with upcoming data presentations. The company is exploring RC18 for lupus, rheumatoid arthritis, and other indications in China. Product revenue expects continuation in 4Q23 and beyond.

Valuation and Recommendation
Maintain a BUY recommendation with a target price of HK$57.65, up from the previous HK$55.54, based on DCF valuation adjustments. The analysis highlights potential for RC18 and RC48, including licensing deals, with a base case for sustained growth.

Summary
RC18 patient enrolment is set to complete in 4Q23, supporting future sales recovery. RemeGen expects to sustain revenue growth and secure regulatory renewals, reinforcing its position in autoimmune and oncology markets.