IBI-363

The investment in Fortvita, the market is highly concerned about the actions of innovative pharmaceutical companies, which is a supervisory force, which is also increasingly normal for innovative pharmaceutical companies. At the same time, a good company should be able to stand up to and respect multiple opinions. So can a persuadable creature of faith still be trusted? After the emotion, the debate has calmed down, or to return to the main line of investment growth logic. Innovent Biologics is facing three key changes: break-even, the birth of pharmaceutical king, and internationalization, which means value enhancement. After the PD-1 encountered obstacles at sea, Innovent Biologics had a deep sense of crisis, and pursued efficiency and fine management through a low-key bottom-up route, and miraculously supported a huge R&D pipeline with robust R&D expenditure. The product revenue of Innovent Biologics 2024Q3 exceeded 2.3 billion yuan, an increase of 40% year-on-year and 15% quarter-on-quarter. In the last four quarters, product revenue has climbed continuously, which is better than expected, verifying the excellent strength of domestic commercialization capability. Unlike most Biotech companies, Cinda no longer only looks at the situation of a single product, but wins with a diversified product matrix, which is similar to the robustness of traditional pharmaceutical companies Hengrui Pharmaceutical and China Biopharmaceutical. According to IQVIA statistics, in 2024H1, the total patient share of listed PD-(L)1 in China was the first for Xinda Biobasu, with a total share of 56% together with Beigene Beizan, and the market pattern was still relatively concentrated. As a cornerstone drug for cancer treatment, PD-1 market share is crucial, representing the right of pharmaceutical companies to speak in the field of cancer drugs. Innovent Biologics has crossed the death valley of the life cycle of innovative pharmaceutical companies, is sprinting to the break-even line, 2024H1 loss convergence to 393 million yuan, 2025 is expected to achieve adjusted EBITDA breakeven. This is all based on endogenous product revenue, rather than transient external BD licensing revenue. Cinda Bio-Mastal peptide is the world's first GLP-1R/GCGR dual-target agonist in the NDA stage, with NDA applications submitted in January 2024 for weight loss indications and NDA applications submitted in August 2024 for Type II diabetes indications, and both indications are expected to be approved for marketing in the first half of 2025 at the earliest. Compared with competing products (Simeaglutide, Tipotide), Maaldotide has a strong weight loss effect, and the 9mg group achieved a better weight loss benefit of 18.6% at 48 weeks when the average BMI and average body weight were higher at baseline. In addition to weight loss, Masidin is more worthy of expectation in terms of comprehensive metabolic benefits. The improvement of fatty liver was more obvious, activated liver GCGR, promoted fatty acid oxidation and lipopolysis, and the phase III clinical results showed that the liver fat content decreased by 80.2%, which was better than GLP-1R single agonist and other double-target agonists. Cinda has proven its commercialization efficiency, and Masaldopeptide as a super drug is about to explode the market. In the field of cardiovascular metabolism, there are high-potential products such as Symbila (PCSK9), which was approved for market last year, and Tetuzumab for thyroid ophthalmopathy, which is expected to be approved next year. Ophthalmology, free of large products are expected to be approved within 1-2 years. Tetuzumab (IGF-1R) was accepted as the NDA for the treatment of thyroid eye disease in May 2024, which is the first IGF-1R antibody to be declared for market in China, which will be a breakthrough variety exclusive to Cinda in this field; Piconcibezumab (IL-23p19) in the treatment of plaque psoriasis has potential better efficacy and advantages of long interval administration, and has been submitted for application. IBI302 is the world's first VEGF/ complement dual-target molecule in the treatment of stage 3 age-related macular degeneration. In recent years, we have also seen that Innovent Biologics is preparing for internationalization. The first is the layout of a new generation of innovative technology and self-research pipeline, involving ADC, double antibody, multi-antibody, small nucleic acid, in the first half of this year, self-developed varieties IBI343 (CLDN18.2 ADC) and IBI363 (PD-1/IL-2) disclosed preliminary clinical phase I data, showing positive early clinical signals. Secondly, the company invests more resources to simultaneously carry out overseas early clinical research and expand overseas research and development teams. It can be seen that the company attaches great importance and prudence to internationalization. From the appearance of the sea platform Fortvita, the company is still in a very early stage, the risk is extremely high, most of them are pre-clinical research and development projects, there is no pipeline assets to reach overseas POC, the layout is related to antibodies, involving tumor, non-tumor fields, similar to listed companies. It does not yet have production and sales functions. We seem to see that the muscle memory of the last failure is still dull, and Cinda Biology is extremely cautious about the first step of internationalization. Fortvita's current situation and direction are unclear, which precisely shows that internationalization is still in the exploratory stage. It is not ruled out to open other channels or ways to go to sea, License-out, NewCo model, cooperative development are all potential options, everything is full of variables. It is in the midst of uncertainty that management is prepared to demonstrate its commitment to internationalisation with real money, and that the market is too quick to judge the ethics of management. Even if the deal is withdrawn now, Fortvita's independent sea is still a proposition that Xinda and shareholders need to solve jointly. In any case, the internationalization of Innovent Biologics is also like an arrow from the string, there is no turning back, and it will eventually be achieved. China's new drugs are trekking a difficult road, fortunately has run out of a small number of leading companies, the fate is not tied to a clinical trial or business progress. Compared with the broad fundamentals of Xinda, this controversial event is just a small floating cloud, which will not shake the value of Innovent Biologics.