【Company Research】Simcere Pharmaceutical Group (2096 HK) – FDA approved trilaciclib for chemotherapy-induced myelosuppression

• The first and only myeloprotection therapy for chemotherapy-induced myelosuppression. On 12 Feb 2021, Simcere’s partner G1 Therapeutics (GTHX US) announced that the US FDA has approved COSELA (trilaciclib) for injection to decrease the incidence of chemotherapy-induced myelosuppression in adult patients when administered prior to chemotherapy for extensive-stage SCLC (ES-SCLC). Trilaciclib is the first and only therapy designed to help protect bone marrow (myeloprotection) when administered prior to treatment with chemotherapy. In Jan 2021, Simcere has obtained the IND approval from the NMPA to conduct a Phase I clinical trial of trilaciclib.

 

• Positive Phase 2 clinical data on trilaciclib in combination with chemotherapy in metastatic TNBC. At 2020 San Antonio Breast Cancer Symposium (SABCS), G1 Therapeutics presented data of a randomized Phase 2 trial of trilaciclib in mTNBC, showing that trilaciclib significantly improved OS for patients treated with trilaciclib in combination with chemotherapy compared with chemotherapy alone (19.8 months vs 12.6 months).

 

• Sanbexin’s Phase 3 result was recently published in STROKE. Sanbexin (edaravone dexborneol) has been developed as a novel neuroprotective agent, approved by the NMPA in Aug 2020. In the Phase 3 trial, among the 1,165 enrolled AIS patients, the edaravone dexborneol group showed significantly higher proportion of patients experiencing good functional outcomes on day 90 after randomization, compared with the edaravone group (modified Rankin Scale score ≤1, 67.18% vs 58.97%; odds ratio=1.42; P=0.004).

 

• Rich innovative drug pipelines. Simcere has established a comprehensive innovative portfolio with nearly 50 candidates in different stages of development. The Company has launched two innovative drugs, Orencia (abatacept injection) and Sanbexin in 2H20. Sanbexin was added into the NRDL, effective from Mar 2021. KN035, a potentially first-to-market subcutaneously injectable anti-PD-L1 monoclonal antibody worldwide, filed NDA in China for MSI-H solid tumors in Dec 2020.

 

• Maintain BUY. We expect Simcere’s attributable net profit to grow from RMB1,004mn in 2019 to RMB1,453mn in 2022E, representing a CAGR of 13.1%. We maintain our target price of HK$13.84 based on a 10-year DCF valuation (WACC: 10.4%, terminal growth rate: 2.0%).

 

• Risks: Lower-than-expected sales from key products, slower-than-expected R&D progress of innovative drugs.