InnoCare recorded total revenue of RMB188mn in 2Q23, including RMB169mn sales from orelabrutinib (+12% QoQ, +52% YoY). In 1H23, the sales of orelabrutinib totalled RMB321mn, +48% YoY, accounting for 33% of our previous full-year estimate. In comparison, BGNE’s zanubrutinib achieved US$97mn revenue in China in 1H23, +38% YoY. InnoCare’s GP margin (vs total revenue) improved significantly from 77% in 1Q23 to 82% in 2Q23. The selling expenses/ R&D expenses/ admin expenses as a percentage of product sales were 62%/ 128%/ 30% in 2Q23, compared to 57%/ 93%/ 24% in 1Q23, or 78%/ 112%/ 32% in FY22. InnoCare recorded a net loss of RMB410mn in 2Q23 vs net loss of RMB12mn in 1Q23. As of June 2023, the Company had sufficient cash and cash equivalent of RMB8.7bn.
Consistent efficacy and differentiated safety profile of orelabrutinib for MS. Positive preliminary Ph2 data of orelabrutinib for the R/R MS at 12 week treatment was released in Mar 2023. InnoCare released the further follow-up results. At week 24, a 92.3% relative reduction (p=0.0037) was achieved in cumulative number of new Gd + T1 brain lesions at 80mg QD (N=29 patients) compared to the placebo arm (switched to orelabrutinib 50mg QD after week 12), consistent with the 12-week results of 92.1% (N=35 patients). One case of SAE was observed and two cases of ALT/AST >8xULN were reported, one in the 50mg BID, and the other in the 50mg QD group. The safety profile of 80mg QD arm was similar to that of the placebo arm. InnoCare is working with FDA to lift the partial clinical hold. To date, Ph3 trials of Sanofi’s tolebrutinib and Merck’s evobrutinib are still on partial hold by FDA. For the treatment of SLE, the Ph2b study of orelabrutinib may complete enrolment of 183 patients in 1H24. The Company expects to complete an interim analysis by end-2024, and will discuss with CDE to expand the study to a registrational trial. In addition, with positive Ph2 data of orelabrutinib for ITP, InnoCare is conducting a Ph3 registration study in China for ITP.
Rich early-stage pipelines in hematologic malignancies and auto- immune diseases. We expect orelabrutinib to add MZL indication to the NRDL in early 2024. The Ph3 study of orelabrutinib in 1L CLL/SLL has fully enrolled with NDA filing expected in 2024, and a Ph3 study in DLBCL-MCD is ongoing in China. In the US, InnoCare completed the patient enrolment in 1H23 for the Ph2 registrational trial of orelabrutinib in r/r MCL with the BLA expected in mid- 2024. The Company is actively looking for an overseas partner for orelabrutinib. ICP-248 (BCL-2) is in Ph1 dose escalation stage with promising early signals. In 3 patients, 2 reached CR and uMRD, suggesting the potential of ICP-248 to combo orelabrutinib for 1L CLL/SLL, with the US IND filing expected by end-2023. The bridging study of tafasitamab in mainland China has fully enrolled the 52 patients. With data release in the next 6 months, the Company expects to file the BLA of tafasitamab in mainland China in 2Q24.Additionally, the Ph2 trial of ICP-332 (TYK2, JH1) for atopic dermatitis (AD) is ongoing with the internal data available by end-2023. For ICP-488 (TYK-2, JH2), a psoriasis cohort has been added to the Ph1 study with the PoC data in psoriasis expected by end-2023.
Maintain BUY. We look forward to the future clinical progress of orelabrutinib in MS. We revised our TP from HK$10.84 to HK$9.07 (WACC: 12.65%, terminal growth rate: 2.0%)