【Company Research】InnoCare Pharma (9969 HK) – Orelabrutinib received approvals for treating r/r-CLL/SLL and r/r-MCL in China

• InnoCare received its first NDA approval from the NMPA. Orelabrutinib (ICP-022) was granted marketing approval for treating elapsed or refractory Chronic Lymphocytic Leukemia/Small Cell leukemia (r/r-CLL/SLL) and relapsed or refractory Mantle Cell Lymphoma (r/r-MCL) by the NMPA, which has made it the second domestic BTK inhibitor approved in China. CLL/SLL and MCL are the two major sub-types of non-Hodgkin’s lymphoma (NHL), accounting for approximately 8% of NHL cases in China. Besides CLL/SLL and MCL, Orelabrutinib is also assessed for treatment of other types of NHLs, including MZL, CNSL, WM, DLBCL and FL, in clinical trials in China and the US.

 

• Well prepared for the commercialization of Orelabrutinib. The Company has appointed Mr. Jin Xiaodong (金肖东) as its Chief Commercial Officer (CCO) to lead commercial initiatives, who has more than 24 years’ solid experience in production commercialization in global pharmaceutical industry. InnoCare has built a commercialization team with over 140 members (including 100 sales representatives), aiming to cover more than 300 core hospitals, or 85% of NHL patients treated in China. We expect that Orelabrutinib will be launched officially in China within one month.

 

• Large potential of Orelabrutinib in multiple sclerosis (MS). Orelabrutinib received approval from the FDA to initiate a Phase II clinical trial treating relapsing-remitting multiple sclerosis patients (RRMS) in Nov 2020. MS is an autoimmune, inflammatory disease of the central nervous system that is mediated by autoreactive B and T cells. According to the MS International Federation (MSIF), more than 2.8mn people around the world are affected by MS with around 500k in the US and around 1mn in EU. Although several drugs are available for MS patients, substantial unmet medical needs remain for drugs with improvements in efficacy, safety and convenient dosing. To date, four BTK inhibitors have been marketed in worldwide, though none of them has been approved for treatment of MS. With a superior safety, potent efficacy, as well as good Brain Blood Barrier (BBB) penetration capability, Orelabrutinib has the potential to become a best-in-class BTK inhibitor for MS, in our view.

 

• Maintain BUY with TP raised to HK$16.79. Considering the approval of Orelabrutinib in Dec 2020, we revised the probability of success of Orelabrutinib in different indications and raised our TP accordingly from HK$16.21 to HK$ 16.79 based on our DCF-based model (WACC: 10.0%, terminal growth rate: 5.0%).