20221220-招银国际-瑞科生物-B-02179.HK-Superior_immunogenicity_on_ReCOV_vs._Pfizer_s_mRNA_vaccine_5页_1mb

Recbio (2179 HK) Summary

Core Content

Recbio (2179 HK) has announced positive results from a Phase II study comparing its COVID-19 vaccine ReCOV with Pfizer's mRNA vaccine, COMIRNATY®. The trial, conducted in the Philippines, evaluated ReCOV's immunogenicity and safety as a booster vaccine. The results, measured 14 days post-booster, showed ReCOV to have superior immunogenicity compared to the mRNA vaccine.

Main Points

• Superior Immunogenicity:

  • In live neutralization assays against prototype strains, ReCOV demonstrated a higher seroconversion rate (SCR) and geometric mean titers (GMT) compared to COMIRNATY®.
    • SCR: 96.0% vs. 91.0% (P=0.039)
    • GMT: 7,781.8 vs. 5,605.3 (P<0.001)
  • ReCOV induced a 25.1 times increase in neutralizing antibodies compared to baseline, which is higher than the 15.7 times increase for the mRNA vaccine.
  • Against Omicron BA.2 and BA.5, ReCOV also showed significantly higher GMTs (5687 and 4387.4) compared to COMIRNATY® (3997.2 and 3100.6), with P<0.001.
  • The superior performance was consistent across adult and elderly sub-groups.

• Cross-Neutralization Effect:

  • ReCOV showed better cross-neutralization against BA.2 and BA.5, with neutralizing antibody levels only 1.37 and 1.77 times lower than those against prototype strains.
  • This is in contrast to Pfizer's vaccine, which showed a 7.0 and 21.0 times lower neutralization against BA.2 and BA.4/5, respectively, two weeks after a homologous booster.

• Safety Profile:

  • No serious adverse events (SAEs) or treatment-emergent adverse events (TEAEs) leading to discontinuation were reported.
  • Most TEAEs were mild (grade 1-2) and resolved quickly.
  • Common adverse events included headache, fever, and myalgia.
  • Safety was similar in adult and elderly sub-groups, supporting its use in the elderly population.

• Regulatory and Development Updates:

  • Recbio has received FDA approval in the Philippines to conduct a Phase I trial for its recombinant shingles vaccine, REC610, which will be compared to GSK's Shingrix®.
  • The vaccine's indication has been expanded to adults aged 40 and above, which is broader than Shingrix®'s target age group of 50 and above.

Key Financial Highlights

Earnings Revisions

Valuation and Target Price

• Target Price: HK$38.86 (revised from HK$38.77)
• Current Price: HK$22.55
• Upside Potential: 72.33%
• DCF Valuation (HK$ mn): 483
• Terminal Growth Rate: 2.5%
• WACC: 11.2%

Financial Projections

Analyst Ratings

• Recommendation: Maintain BUY
• Target Price: HK$38.86
• 12-Month Return Potential:
  • BUY: Over 15%
  • HOLD: +15% to -10%
  • SELL: Over 10% loss

Share Performance

Market Capitalization

• Mkt Cap (HK$ mn): 10,891
• Avg 3 mths t/o (HK$ mn): 4.84
• 52w High/Low (HK$): 28.30 / 17.72
• Total Issued Shares (mn): 94

Shareholding Structure

• Management: 17.3%
• Legend Capital: 10.0%

Valuation Table

Terminal Value

• Terminal Value (RMB mn): 53,984
• Equity Value (HK$ mn): 483
• DCF per share (HK$): 38.86

Valuation Sensitivity

Financial Summary

• Revenue Growth: Expected to increase significantly from FY22E to FY23E and FY24E.
• Gross Profit Margin: Improved to 20.00% in FY23E and 23.00% in FY24E.
• Operating Margin: Negative in FY22E to FY24E, indicating ongoing operational challenges.
• ROE: Improved in FY23E and FY24E, showing potential for better returns.

Key Financial Ratios

Analyst Certification

• The analyst certifies that the views expressed in the report reflect his/her personal views.
• No compensation is directly or indirectly related to the specific views expressed.
• The analyst did not trade in the stock within 30 days prior to the report's issue date.
• The analyst will not trade in the stock within 3 business days after the report's issue date.
• The analyst has no financial interest in the companies discussed.

Important Disclosures

• The report is not tailored to individual investors and is not an offer to buy or sell securities.
• CMBIGM is not liable for any losses incurred from reliance on the report.
• The information is based on publicly available data and is subject to change.
• CMBIGM may have conflicts of interest due to investment banking relationships.