20220831-招银国际-开拓药业-B-09939.HK-Encouraging_data_of_pyrilutamide_for_treatment_of_AGA_5页_1mb

Kintor Pharmaceutical (9939 HK) Summary

Core Content and Key Information

Kintor Pharmaceutical is a biopharmaceutical company with a focus on developing novel therapies for various medical conditions, particularly in the areas of androgen receptor-targeted treatments and antiviral drugs. The company is currently in the process of advancing its drug candidates, pruxelutamide and pyrilutamide, through clinical trials and regulatory submissions.

Financial Performance (1H22)

• Net Loss: RMB518.4 million in 1H22.
• Adjusted Loss: RMB468.6 million (+56.3% YoY), after excluding share-based compensation expenses.
• R&D Costs: RMB461.1 million (+63% YoY), driven by clinical trial fees for pruxelutamide in the context of the pandemic.
• Admin Expenses: RMB65.5 million (+32% YoY).
• Cash Position: RMB337.3 million as of June 2022, with potential total cash position reaching RMB509.9 million if related-party borrowings and retrieved financial assets are added back.

Drug Development Highlights

• Pruelutamide for COVID-19:

  • Late-stage discussions with CDE and US FDA regarding BLA for outpatient treatment.
  • IIT study in Shanghai showed no virus detected after 7-12 days of treatment in severe/critical elderly patients who had rebound after paxlovid.
  • The Company is seeking to amend endpoints of other MRCTs for Omicron variant.
  • NDA for mCRPC is expected upon OS data release in 4Q22E, with data readout for 1L mCRPC in 2023E.

• Pyrilutamide for AGA:

  • Positive results from Ph2 trial in China: 5mg BID arm increased TAHC by 15.34 per $\mathrm{cm}^2$ (p = 0.024).
  • Ph3 trial ongoing in China, with NDA expected in 2H23E.
  • Potential head-to-head study against minoxidil for AGA.
  • Patient enrolment completed for Ph2 studies in both China and the US for male and female AGA patients.

Main Points and Viewpoints

• Investment Recommendation: Maintain BUY rating with a revised target price of HK$40.10 (previously HK$48.78).
• Potential Returns: The target price implies a potential upside of 148.4% from the current price of HK$16.14.
• Valuation: The DCF-based valuation model indicates a potential enterprise value of RMB13,209 million, with a terminal growth rate of 2.0% and WACC of 10.0%.
• Risks and Assumptions: The valuation is sensitive to changes in WACC and terminal growth rate, with a significant downward revision from previous estimates.
• Market Position: Kintor's stock has shown mixed performance in the short and long term, with a 12-month price performance chart included.

Shareholding and Stock Data

• Market Cap: HK$6,255.7 million.
• Average 3-Month Trading Value: HK$17.8 million.
• 52-Week High/Low: HK$85.00 / HK$7.78.
• Total Issued Shares: 387.6 million.
• Shareholding Structure:
  • Youzhi Tong: 13.2%
  • Chuangxing Guo: 11.1%

Analyst and Rating Information

• Analyst: Jill Wu, CFA and Andy Wang.
• CMBIG Ratings:
  • BUY: Potential return of over 15% over next 12 months.
  • OUTPERFORM: Industry expected to outperform the relevant broad market benchmark.
  • MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark.
  • UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark.

Valuation Table (RMB mn)

Financial Summary

• Cash Flow:
  • Net cash from operations: (416) million RMB in 2022E.
  • Net cash from financing: 300 million RMB in 2022E.
• Growth:
  • Revenue growth: 367.4% in FY22E.
  • Gross profit margin: 80.00% in 2022E.
• Profitability:
  • ROE: 56.1% in 2022E.
  • Operating margin: 33.2% in 2022E.

Risk and Disclaimer

• Risks: The report includes risks associated with investing in securities and does not provide individually tailored investment advice.
• Disclaimer: The information is not guaranteed and may differ materially from actual events. CMBIGM is not liable for any losses or damages resulting from reliance on this information.
• Distribution Restrictions: The report is for distribution to specific investors and may not be shared with others without prior written consent.