The innovative drug maker’s stock price soared more than 18% in a single day on high hopes that its blockbuster drug Nefecon will be included on China’s national reimbursement drug list.
Key Takeaways: Everest Medicines’ Nefecon achieved sales of 167 million yuan just over a month after launch, showing great future potential Therapeutic vaccines are at the core of the company’s independent research and development Everest’s first personalized therapeutic mRNA tumor vaccine is currently in clinical trials.
Written by Molly Wen
The rally in Hong Kong and mainland China’s stock markets since late September has delivered a much-needed blow to China’s long-dormant innovative pharmaceutical sector. After four years of painful corrections, valuations suddenly became attractive again, with the CSI Hong Kong Innovative Medicines Index up 26% in September alone.
Some of these gains returned during the widespread market pause in early October, but innovative drug makers with steady earnings and strong international prospects continued to command attention. One of these is Everest Medicines Ltd. (1952.HK), which focuses on autoimmune diseases and mRNA-based treatments.
Everest’s stock has tumbled in recent months, rising about 50% and outperforming its peers in innovative medicines. This includes more than 18% in a single business day, reflecting high expectations that the company’s blockbuster new drug, Nefecon, will soon be covered by China’s medical insurance, during pre-negotiation sessions on China’s National Reimbursable Drug List. This included a sharp rise in Such inclusion would make the recently approved drug immediately available to thousands of hospitals across the country, significantly increasing sales.
Shares rose another 16% on Wednesday, giving the company a market value of more than HK$11 billion ($1.4 billion).
Business is now stable and Everest has achieved a major milestone: the first commercial level profit in the company’s history. According to the latest financial report, revenue for the first half of this year was 301.5 million yuan ($42.5 million), an increase of 158% compared to the second half of 2023. CEO Luo Yongqing said in a report that the company expects to sell three products by the end of this year and achieve full-year sales of 700 million yuan. This should be a major catalyst towards its goal of achieving cash break-even by the end of 2025.
The strong sales growth was primarily due to the contributions of Nefecon, the world’s first treatment targeting the cause of IgA nephropathy (IgAN), and Zerava, the first fullcycline antibiotic. In May alone, just after the first prescription for Nefecon was issued, the drug recorded sales of 167 million yuan, showing its great potential.
China has the highest incidence of primary glomerular diseases in the world, with IgAN patients accounting for approximately 35-50% of cases. Previous treatments for IgAN have had side effects, including serious infections. As a gut-targeted mucosal immunomodulator, Nefecon is the first regimen to target IgAN at its source. Two years of subpopulation data on Nefecon during treatment and observation in China were published in the prestigious industry publication Kidney 360 in October.
Industry analysts also note that the drug has the potential to address an important unmet clinical need, particularly in Asian populations where IgAN is more prevalent and progresses more rapidly. Positive results from the Chinese subpopulation in clinical trials further support the efficacy of Nefecon in this population.
Overall, the industry considers Nefecon to be a breakthrough treatment that can improve the quality of life for many IgAN patients. The drug’s approval and positive clinical data create optimism about its future impact on the field of nephrology.
Nefecon has been approved for sale in Taiwan, the fifth region after mainland China, Hong Kong, Macau and Singapore. The drug is expected to receive similar approval in South Korea by the end of the year. Everest is actively promoting the drug’s inclusion on China’s national reimbursement drug list, with the aim of improving drug affordability and access.
Additionally, Everest’s etrasimod, another new drug with great potential for treating ulcerative colitis, has been approved for sale in Macau and Singapore, and a new drug application will be submitted in mainland China by the end of the year. It is planned. An application has already been submitted to Hong Kong. Utilizing the region’s “Hong Kong and Macau Access to Medicines and Medical Devices” policy, which connects the Greater Bay Area in southern China and neighboring Guangdong Province, benefits to ulcerative colitis patients may begin by the end of the year. .
Everest also plans to submit a new drug application in mainland China in 2025 for cefepime-taniborbactam, a powerful antibiotic intended to treat complicated urinary tract infections.
Bet on mRNA tumor vaccines
As other innovative pharmaceutical companies compete for position with a new generation of targeted anti-cancer drugs, such as PD-1 inhibitors and antibody-drug conjugates (ADCs), Everest is pursuing a position in the relatively less developed field of mRNA tumor vaccines. He is setting his sights on an empty green field. Such vaccines utilize the host cell’s protein synthesis machinery to introduce mRNA encoding a disease-specific antigen into the body, produce the antigen, and activate a specific immune response, thereby immunizing tumor cells. cause an attack. They are considered to be highly safe and can be rapidly designed and synthesized, allowing rapid response to tumor changes.
In September 2021, Everest partnered with mRNA therapeutics and vaccine manufacturer Providence Therapeutics to develop mRNA therapeutics and vaccines. Through the partnership, Everest was able to acquire the necessary technology to manufacture these vaccines, build a clinically proven mRNA platform, and establish an mRNA industrialization base in Jiashan, Zhejiang Province, eastern China. The site is equipped with all functions, from bulk and pre-production to filling individual vaccine vials.
The two companies ended their partnership in February of this year, but prior to the end of the agreement, Everest acquired all intellectual property rights and worldwide rights to prophylactic and therapeutic mRNA vaccine products from Providence. Everest has now shifted its focus to mRNA therapeutic cancer vaccines and is currently developing four similar vaccine programs for various solid tumor indications.
The company’s first personalized therapy vaccine, developed independently through the company’s mRNA technology platform EVM16, began clinical trials in August this year. Another spot tumor-associated antigen vaccine, EVM14, also plans to submit new drug clinical trial applications in China and the United States early next year.
Another of Everest’s drugs, EVER001, is expected to present Phase 1b clinical data later this year for the treatment of primary membranous nephropathy (PMN), a kidney disease. The drug is expected to enter phase 2 clinical trials by next year, reflecting promising early results for the drug as a potential new treatment option for PMN.
As a typical innovative pharmaceutical manufacturer with a license-in model, Everest is able to leverage its strengths in clinical development, registration and listing, and commercialization to bring products to market quickly. The company’s significant investment in its mRNA platform also signals its ambition to become a leading biopharmaceutical company.
Currently, Everest’s price-to-sales (P/S) ratio is around 14 times, almost double the 7.5 times of Zylab (ZLAB.US; 9688.HK), another pharmaceutical company that uses a license-in model. are. Investors’ expectations for Everest are rising. In remarks at the company’s latest financial report, CEO Luo said Everest will lead Asia by achieving annual sales of up to 10 billion yuan in four major product areas by 2030. The company aims to become a global comprehensive biopharmaceutical company. Achieving the ambitious pace of new drug launches will be one of the company’s biggest challenges, and investors will be watching closely.
The Bamboo Works provides extensive coverage of Chinese companies listed in the United States and Hong Kong, including some sponsored content. For any other questions, including questions about individual articles, click here to contact us.
Click here to subscribe to Bamboo Works’ free weekly newsletter
