20220407-招银国际-开拓药业-B-09939.HK-Proxalutamide_showed_very_promising_efficacy_signals_in_a_Ph3_MRCT_trial_in_COVID-19_outpatients_5页_1mb

Kintor Pharmaceutical (9939 HK) Company Update Summary

Core Content

Kintor Pharmaceutical recently released the topline results of its Phase 3 MRCT trial of proxalutamide for the treatment of mild to moderate COVID-19 patients. The trial was conducted in the US, with the majority of participants (727 out of 736) enrolled from that region, indicating high data quality. The trial included patients infected with the delta and omicron variants, and participants were randomized 1:1 to receive proxalutamide 200mg once daily (QD) plus standard of care (SOC) or placebo plus SOC for 14 days.

Key Trial Results

• Primary endpoint: The trial did not meet the primary endpoint of reducing hospitalization or mortality by Day 28, but showed a 50% reduction in hospitalization risk (4 vs. 8 patients hospitalized, including one death in the placebo group), though the difference was not statistically significant due to limited events.
• Subgroup analysis:
  • Among patients with more than 7 days of treatment (N=693), proxalutamide reduced the risk of hospitalization/death by 100% (p < 0.02).
  • In high-risk patients (obesity and ≥50 years old), the drug showed a 100% reduction in hospitalization/death (p < 0.02).
  • In patients aged ≥60 years, there was also a 100% reduction (p < 0.02).
• Viral load reduction: Proxalutamide significantly and continuously reduced viral load compared to the control group (p < 0.01 on Day 3 and Day 28).
• Safety: The drug was well tolerated, with TEAE rates of 7.9% in the control group and 9.6% in the proxalutamide group.

EUA Approval Expectations

Kintor is optimistic about the potential for EUA (Emergency Use Authorization) approval in China, the US, EU, and other countries. The company expects to complete the full dataset analysis within the next 4–6 weeks. Manufacturing capacity is projected to reach 1.4 billion tablets per year by year-end, sufficient to meet the demand of 50 million patients.

Investment Recommendation

• Rating: BUY (Maintain)
• Target Price (HK$): 48.78 (Previously: HK$34.37)
• Price Target Upside: +69.10%
• Current Price (HK$): 28.85

Financial Overview

Revenue (RMB mn)

• FY20A: -
• FY21A: 34
• FY22E: 2,174
• FY23E: 4,175
• FY24E: 3,230

Attributable Net P&L (RMB mn)

• FY20A: (508)
• FY21A: (842)
• FY22E: 420
• FY23E: 1,448
• FY24E: 1,042

R&D Expenses (RMB mn)

• FY20A: (329)
• FY21A: (768)
• FY22E: (500)
• FY23E: (500)
• FY24E: (500)

EPS (RMB)

• FY20A: (1.64)
• FY21A: (2.36)
• FY22E: 1.08
• FY23E: 3.73
• FY24E: 2.69

Consensus EPS (RMB)

• FY22E: N/A
• FY23E: N/A
• FY24E: (0.14)

ROE (%)

• FY20A: (34)
• FY21A: (51)
• FY22E: 20
• FY23E: 41
• FY24E: 23

ROA (%)

• FY20A: (27)
• FY21A: (41)
• FY22E: 15
• FY23E: 31
• FY24E: 18

Valuation Analysis

DCF Valuation (RMB mn)

• 2022E: 1,739
• 2023E: 3,382
• 2024E: 2,649
• Terminal Value (2030E): 22,019

Equity Value (HK$ mn)

• 2022E: 18,908
• 2023E: N/A
• 2024E: N/A
• 2030E: N/A

Terminal Growth Rate: 2.0%

WACC: 10.7%

Share Performance

• 1-month return: 13.7% (Absolute) / 10.6% (Relative)
• 3-month return: 22.6% (Absolute) / 24.8% (Relative)
• 6-month return: -62.5% (Absolute) / -59.8% (Relative)

Shareholding Structure

• Youzhi Tong: 13.17%
• Chuangxing Guo: 11.13%
• Gree Financial: 6.77%
• Legend Holdings: 6.00%
• CloudAlpha: 4.98%
• Others: 57.95%

Market Capitalization

• Market Cap (HK$ mn): 11,182
• Average 3-month trading volume (HK$ mn): 98.40
• 52-week High/Low (HK$): 89.00 / 6.91

Key Ratios

• Gross Margin:
  • FY22E: 80%
  • FY23E: 81%
  • FY24E: 82%
• Current Ratio (x):
  • FY20A: 8.4
  • FY21A: 6.9
  • FY22E: 13.7
  • FY23E: 14.6
  • FY24E: 24.1
• ROE:
  • FY20A: (34)
  • FY21A: (51)
  • FY22E: 20
  • FY23E: 41
  • FY24E: 23
• ROA:
  • FY20A: (27)
  • FY21A: (41)
  • FY22E: 15
  • FY23E: 31
  • FY24E: 18

Key Financial Highlights

• Operating Profit (RMB mn):
  • FY22E: 509
  • FY23E: 1,736
  • FY24E: 1,268
• Net Profit (RMB mn):
  • FY22E: 420
  • FY23E: 1,448
  • FY24E: 1,042
• Net Margin:
  • FY22E: 35%
  • FY23E: 32%

Summary of Key Information

• The Phase 3 MRCT trial showed promising efficacy signals in specific subgroups, particularly those with more than 7 days of treatment and high-risk patients.
• The primary endpoint was not met, but the efficacy in subgroups is considered very positive.
• Safety profile is favorable, with low TEAE rates.
• Kintor is targeting EUA approvals in multiple regions, including China, the US, and the EU.
• Manufacturing capacity is expected to reach 1.4bn tablets annually by year-end.
• The target price has been revised upwards to HK$48.78, reflecting the positive outlook on EUA approvals and the potential for growth.
• Financial performance is expected to improve significantly, with increased revenue and profit in the coming years.
• The current ratio has improved over time, indicating strong liquidity.
• The financials suggest a positive outlook for the company, with improved profitability and increased equity value.