InnoCare recorded total revenue of RMB189mn in 1Q23, including RMB151mn sales from orelabrutinib (-9% QoQ, +44% YoY). The QoQ decrease in sales of orelabrutinib was mainly due to the COVID-19 outbreak and Chinese New Year break in 1Q. InnoCare continued to improve its cost efficiency in 1Q23. The selling costs/ R&D costs/ admin costs as a percentage of product sales decreased to 57%/ 93%/ 24% in 1Q23, from 78%/ 112%/ 32% in FY22, respectively. The R&D costs in 1Q23 were RMB141mn, compared to RMB164mn in 4Q22. InnoCare narrowed the attributable net loss to RMB12mn compared to loss of RMB52mn in 4Q22. As of 1Q23, the Company has RMB8.9bn cash and cash equivalent, sufficient to support the Company’s R&D and operations for multiple years.
　　Look forward to the further data readout of orelabrutinib for autoimmune　diseases. Positive preliminary data of Ph2 trial (NCT04711148) of orelabrutinib for the R/R MS with 12-week treatment was released in Mar 2023. As the primary endpoint of the study has been met, InnoCare decided to cease further patient enrolment for the Ph2 global trial and to continue patient follow-up with the treatment results at week 24 internally available by end May 2023. The Company expects to submit the full 24-week efficacy and safety data to the FDA to discuss about lifting the partial hold of the Ph2 MS trial and initiating a Ph3 study. To date, Ph3 trials of Sanofi’s tolebrutinib for MS are still on partial hold by FDA. Additionally, in Apr 2023, the FDA also placed a partial clinical hold on Merck’s evobrutinib (link) due to suggestive drug-induced liver injury cases. We will keep a close eye on FDA’s further decisions on the study hold for the three BTK inhibitors. For the treatment of SLE, the Ph2b study of orelabrutinib expects to complete the enrolment of 183 patients within the next 12 months. The expected DoT of the study is 48 weeks. The Company may conduct an interim analysis and seeks to upgrade the study to a registrational study upon CDE’s approval. In addition, InnoCare will release detailed data of the Ph2 trial of orelabrutinib for ITP at the EHA meeting in the coming Jun.
　　Smooth progress of regulatory and research development. Orelabrutinib　was recently approved for r/r MZL, becoming the first BTKi in China for the treatment of r/r MZL. In the US, the Company has completed the patient enrolment for the Ph2 registrational trial for r/r MCL with the US BLA expected within the next 12 months. The bridging study of tafasitamab in mainland China is expected to be finished this year, and the Company expects to file the BLA of tafasitamab in mainland China by end-2023 or early-2024.Additionally, the Ph2 trial of ICP-332 (TYK2, JH1) for atopic dermatitis (AD) is ongoing with the data readout expected within the next 12 months. 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 further data readout of orelabrutinib’s Ph2 MS trial and the next steps of the FDA. We maintain our TP unchanged at HK$10.84 (WACC: 11.37%, terminal growth rate: 3.0%).