20201229-招银国际-诺诚健华-B-09969.HK-Orelabrutinib_received_approvals_for_treating_r_r_CLL_SLL_and_r_r-MCL_in_China_5页_905kb

InnoCare Pharma (9969 HK) Company Update Summary

Core Content

InnoCare Pharma (9969 HK) has received its first NDA approval from the National Medical Products Administration (NMPA) in China for Orelabrutinib (ICP-022), which is now approved for the treatment of relapsed or refractory Chronic Lymphocytic Leukemia/Small Lymphocytic Lymphoma (r/r-CLL/SLL) and relapsed or refractory Mantle Cell Lymphoma (r/r-MCL). This makes Orelabrutinib the second domestic BTK inhibitor approved in China.

CLL/SLL and MCL are the two major subtypes of non-Hodgkin's lymphoma (NHL), accounting for approximately 8% of all NHL cases in China. Orelabrutinib is also being evaluated for other NHL subtypes such as MZL, CNSL, WM, DLBCL, and FL in clinical trials in China and the US.

In addition, Orelabrutinib has received FDA approval to initiate a Phase II clinical trial for the treatment of relapsing-remitting multiple sclerosis (RRMS). MS is an autoimmune and inflammatory disease of the central nervous system, with over 2.8 million global cases. Despite existing treatment options, there remains a significant unmet medical need for drugs with better efficacy, safety, and convenience. Orelabrutinib's superior safety profile, potent efficacy, and good brain blood barrier (BBB) penetration capability position it as a potential best-in-class BTK inhibitor for MS.

Commercialization Readiness

• Chief Commercial Officer (CCO): Mr. Jin Xiaodong, with over 24 years of experience in global pharmaceutical commercialization, has been appointed to lead the commercial initiatives.
• Team Size: InnoCare has assembled a commercialization team of over 140 members, including 100 sales representatives.
• Hospital Coverage: The company aims to cover more than 300 core hospitals, representing 85% of NHL patients treated in China.
• Launch Timeline: Orelabrutinib is expected to be officially launched in China within one month.

Financial Overview

Earnings Summary (YE 31 Dec)

FY	Revenue (RMB mn)	Attributable Net Profit (RMB mn)	R&D Expense (RMB mn)
FY18A	2	(550)	(150)
FY19A	1	(2,141)	(213)
FY20E	2	(549)	(400)
FY21E	116	(333)	(400)
FY22E	298	(187)	(238)

Key Ratios

• Gross Margin: Improved from 80% in FY20E to 84% in FY22E.
• Current Ratio: Rose from 29 in FY18A to 249 in FY20E, then declined to 72 in FY22E.
• ROA: Negative in FY18A and FY19A, but improved to -7% in FY22E.

Investment Recommendation

• Rating: BUY
• Target Price (TP): HK$16.79 (Previously HK$16.21)
• Up/Downside: +22.37%
• Current Price: HK$13.72

Share Performance

• 1-month return: 7.2% (Absolute) vs. 9.3% (Relative)
• 3-month return: 35.9% (Absolute) vs. 19.6% (Relative)
• 6-month return: -16.1% (Absolute) vs. -22.0% (Relative)

Shareholding Structure

• Management: 36.39%
• Pre-IPO and Cornerstone Investors: 43.95%
• Free Float: 19.67%

Market Capitalization

• Mkt. Cap. (HK$ mn): 17,687
• Avg. 3mths t/o (HK$ mn): 22.69
• 52W High/Low (HK$): 16.80/9.31
• Total Issued Shares (mn): 1,289

Analyst Certification

• The research analyst certifies that the views expressed in this report accurately reflect their personal views.
• The analyst confirms no trading in the stock covered in the report within 30 days prior to its release and no trading for 3 business days after.
• The analyst has no financial interest in the companies covered in this report.

CMBIS Ratings

• BUY: Stock with potential return of over 15% over next 12 months.
• HOLD: Stock with potential return of +15% to -10% over next 12 months.
• SELL: Stock with potential loss of over 10% over next 12 months.
• NOT RATED: Stock not rated by CMBIS.

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