On April 25, Sanofi released its Q1 2024 financial report, in which its total revenue of 10.464 billion euros was contributed 2.835 billion euros, equivalent to 21.98 billion yuan, to dupilumab, the core product of the autoimmune pipeline. According to the annual report disclosed by Sanofi, the total global sales of the drug will reach $11.5 billion in 2023.
This sales volume is not yet commercialized in the domestic IL4R monoclonal antibody track, Gemini Kangnuoya-B (02162) and Conrad Biologics (CNTB. US), which is clearly out of reach. However, after years of research and development, one of the twin stars, Kangnuoya, seems to be about to enter the commercialization stage this year, aiming at the global market of more than 20 billion US dollars for atopic dermatitis, and the commercialization certainty has been significantly enhanced compared with before.
From the perspective of secondary market performance, since the company's share price reached a high of HK$82.85 on February 3 last year, Kangnuoya's share price has been in a volatile downward trend for more than a year, and hit the lowest point of HK$26.60 on April 26 this year, with a maximum decline of 67.9%.
It is not difficult to see that the valuation of Connoya on the eve of product commercialization has been greatly compressed, and if Connova wants to achieve a rebound in valuation, the subsequent approval time point and commercialization performance of sprecizumab are worth paying attention to.
Whether hematopoietic expectations can inflate valuations
Judging from the 2023 annual report disclosed by Keynova, at present, Keynova spalzimab (CM310) has achieved NDA acceptance for moderate to severe atopic dermatitis and the indication of chronic rhinosinusitis with nasal polyps that has reached the primary endpoint of phase III, plus the company recently announced that the phase III study of the drug for the treatment of seasonal allergic rhinitis was successful and the marketing authorization application was accepted by the State Food and Drug Administration. In other words, three indications of Kangnuoya's core product, spriqimab, have entered the harvest stage.
In addition, CMG901, another world's first-in-class ADC product targeting Claudin18.2, has also entered the global phase III clinical application stage, but in the first half of last year, Connova and AstraZeneca reached an overseas licensing order of more than US$1 billion for the drug, and received a down payment of US$63 million.
From a commercial point of view, in addition to the core product sepunizumab, although Kangnuoya's other pipeline products also have certain potential for differentiated innovation, the clinical progress has not yet reached the late stage, and it is difficult to support the company's short-term hematopoietic expectations. In other words, the subsequent commercialization and valuation expectations of Keynova can only depend on the performance of sparkzimab in the three important indication markets.
Referring to the sales of dupilumab, although it has been approved for many indications around the world, the indication of atopic dermatitis is still a key area to support its sales. The same may be true for the same target spricimbinimab.
According to Zhitong Financial APP, from the perspective of the domestic market, the number of atopic dermatitis patients in China is relatively large, and the number of AD patients in China has reached 65.7 million in 2019. Statistics show that in 2019, the number of AD patients in China has reached 65.7 million, of which about 47.5 million are mild and 18.2 million are moderate to severe. The number of ADs in China is expected to increase at a CAGR of 2.3% to 73.7 million in 2024 and to 81.7 million in 2030 at a CAGR of 1.7%. According to the neutral assumption of Essence Securities, it is estimated that the domestic market size of moderate to severe atopic dermatitis is expected to reach 29.1 billion yuan by 2030.
For chronic sinusitis with nasal polyps (CRSwNP), according to Frost & Sullivan, the prevalence of CRSwNP in China was 20.1 million in 2021 and is expected to reach 23.1 million in 2030. In 2021, the size of China's CRSwNP drug market was US$131 million, and it is expected to reach US$622 million, equivalent to RMB4.505 billion, by 2030, at a CAGR of 18.9%.
In the allergic rhinitis treatment market, the global market reached $13.95 billion in 2020 and is expected to grow to $17.86 billion in 2027. However, due to the low penetration rate in the domestic market, the rhinitis drug market is expected to be 4.4 billion yuan in 2024.
From the market space, it is not difficult to see that the future commercialization path of sprezimab may converge with dupilumab, that is, to vigorously dig into the market space for the indication of atopic dermatitis, but from the perspective of market competition and commercialization channel construction, the possibility of Kangnuoya getting a big cake is low.
BIC in the commercialization stage is difficult to do
In recent years, Sanofi has failed in the research and development of BTK inhibitors and other products, and the company itself is also laying off employees and slimming down, and its trend of betting on dupilumab is increasing. Therefore, as mentioned above, on the road to commercialization of spalzimab, whether in the field of atopic dermatitis, sinusitis or allergic rhinitis, the drug will always be unable to avoid head-to-head competition with dupilumab.
Taking the indication of atopic dermatitis as an example, a previous phase III clinical trial of spalzimab showed that after 16 weeks of treatment, 66.9% of subjects in the splankimab treatment group met the EASI75 standard, while 44.2% of subjects achieved an IGA score of 0 or 1 and decreased by ≥2 points from baseline. In contrast, in the phase 3 clinical trial of Dabital in China, the proportion of patients with EASI50 and EASI75 at week 16 was 71% and 57%, respectively. While these data show the efficacy of dorbital, it is clearly at a disadvantage compared to sparcibelimab.
In addition, a previous phase III clinical trial mainly used to confirm the efficacy and safety of spalzimab in the treatment of patients with chronic rhinosinusitis and nasal polyps also showed that although spalzimab and dupilumab were not head-to-head studies in the field of sinusitis, both had significant efficacy in improving patients with sinusitis in terms of efficacy and safety. Recently, the phase III clinical trial of spalzimab in the indication of allergic rhinitis disclosed by Kangnuoya also showed positive trial data results, and the primary endpoint was fully met, and spalzimab was significantly better than that of the placebo group, with a highly significant statistical difference and a good safety profile.
The above data show that the two are equal in the field of clinical treatment, and even sprezimab has more BIC potential, but between the gap between R&D companies at the commercialization level, the real gap between the two may lie in sales performance.
Zhitong Financial APP learned that as the most successful target in the field of TH2 pathway, regeneron/Sanofi's dupilumab has been approved for AD and asthma and other indications. After the success of chronic urticaria and COPD last year, Wall Street raised its future sales peak to nearly $20 billion, and its sales in 2023 have reached 11.5 billion euros, accounting for large indications and expanding indications in the pathway.
In addition, dupilumab was included in the National Medical Insurance Catalogue only 5 months after its marketing in China, and became the only targeted biologic agent for the treatment of moderate to severe atopic dermatitis in the new version of the Medical Insurance Catalogue. At present, the price of 200mg of atopic dermatitis dabital (dupilumab) is 1,631 yuan for two vials.
From the perspective of production, at present, Kangnuoya has a production capacity of 18,600 liters to support the commercial production of spalzimab, and on the sales side, Kangnuoya is also preparing to set up a commercial team of about 200~300 people by the end of 2024, but the scale of this sales team is obviously difficult to compare with Sanofi. In addition, it is expected that the sexplumab on the market in the second half of this year will also be stuck by the medical insurance price of dupilumab, so it is necessary to seize the opportunity of the adjustment of the medical insurance catalog at the end of this year to be able to compete with dupilumab at the hospital entrance in the future.