- Increased R&D spending due to accelerated R&D progress. Kintor reported attributable net loss of RMB508mn in 2020 vs loss of RMB233mn in 2019. R&D cost increased 53.6% YoY to RMB329mn in 2020. As of end-2020, Kintor had a robust pipeline of 6 clinical stage drug candidates, incl. 1 Ph III stage asset, 2 Ph II assets, and 3 Ph I assets. Kintor is conducting multiple trials, including (i) phase III clinical trials for Proxalutamide monotherapy and combination therapy with Abiraterone for mCRPC in China; (ii) phase Ib clinical trials for Pyrilutamide in the US; (iii) phase II clinical trials for ALK-1 in Taiwan; (iv) trials for Proxalutamide for COVID-19 in Brazil; (v) trials for Pyrilutamide for acne vulgaris in China; (vi) phase II clinical trials for Pyrilutamide for androgenetic alopecia in China, etc. As of end-2020, Kintor had RMB1,389mn cash on hand, which will be sufficient to support the Company’s future R&D activities.
- Proxalutamide showed promising efficacy on COVID-19 in several IIT studies in Brazil. For mild or moderate COVID-19 patients treated with Proxalutamide, the hospitalization rate of male patients was reduced by 100%, while that of female patients was reduced by 90%. More importantly, for hospitalized COVID-19 patients, the mortality rate was reduced by 92%, and the length of hospital stay was cut by 9 days (5 vs 14). Kintor has received approval from the US FDA to conduct a registrational phase III trial of Proxalutamide’s treatment of male COVID-19 outpatients with mild or moderate symptoms. Kintor is also conducting trials assessing Proxalutamide for treatment of mCRPC and mBC. Two Phase III trials of Proxalutamide monotherapy for 2L+ mCRPC and in combination with Abiraterone for 1L mCRPC are ongoing in China.
- Highly innovative pipelines. For Pyrilutamide: Kintor completed the enrolment of 120 patients for Pyrilutamide’s phase II trial for androgenetic alopecia in China and the data may be released in 2021. Kintor obtained NMPA’s IND approval of Pyrilutamide gel formula for acne vulgaris in Sep 2020, while the trial may start in 2Q21E. For GT90001 (ALK-1 antibody): In a Ph II trial of GT90001 in combination of Nivolumab for 2L HCC in Taiwan, among the 20 evaluable patients, eight patients (40.0%) were observed PR. In Feb 2021, Kintor obtained US FDA approval to start a Ph II trial of GT90001 + Nivolumab for 2L HCC. For GT20029 (AR-degrader): The IND applications of GT20029 for androgenetic alopecia and acne vulgaris were accepted by the NMPA in Feb 2021.
Maintain BUY. Considering the positive progress of Proxalutamide in treating COVID-19, we expect it will be approved and launched to the US market in 2022 with a COVID-19 label. We raise our 22E/23E revenue forecast by 142%/54%, and raise our TP to HK$38.88 based on a 10-year DCF model (WACC: 9.5%, terminal growth rate: 3.0%). Risks: Delay in pipeline progress; Competition from peers.
