Everest-B (01952.HK) achieved its sales target as planned. According to the annual performance announcement released on March 26, in 2024, Everest recorded revenue of 706.7 million yuan, a year-on-year increase of 461%; the loss during the year was 1.0414 billion yuan, compared with a loss of 844.5 million yuan in the same period last year, and the loss increased year-on-year.

According to the announcement, Everest's performance growth was mainly due to the sales of two commercial products, and the increase in losses was mainly due to the one-time, non-recurring impairment loss of intangible assets related to the mRNA COVID-19 vaccine in the first half of 2024. As of the end of 2024, Everest recognized the full impairment loss of US$50 million (equivalent to RMB 356.3 million) for the mRNA COVID-19 vaccine because it could not recover any economic benefits.

Regarding the performance in 2024 and subsequent development, Luo Yongqing, CEO of Everest, said at the performance communication meeting held on the morning of March 26, "With our current financial situation, we are now eligible to apply to remove the 'B' logo in front of Everest's stock name, which means that the company has grown from a Biotech company to a Biopharma company, and our future growth will be more stable and the foundation will be more solid. At the same time, we will continue to adhere to the dual-wheel drive strategy as always, and will continue to introduce blockbuster products that have synergistic effects with our products and treatment areas. At the same time, we will proactively invest in some areas with breakthrough treatment methods, including mRNA, membranous nephropathy, and autoimmune hepatitis."

According to He Ying, President and CFO of Everest, the company's goal is still to achieve a cash flow balance by the end of 2025.

Two flagship products sold over 700 million yuan

In 2024, Everest exceeded its sales target of 700 million yuan, becoming the key to its substantial revenue growth. In the 2024 interim report, Everest wrote in the commercialization outlook section, "We maintain the full-year total sales guidance of RMB 700 million for Naifon and Yijia."

Yiga and Naifon are both products that Everest has commercialized. Among them, Yijia is an antibiotic product that will be launched in mainland China in late July 2023 for the treatment of complicated intra-abdominal infections (cIAI) in adults. Everest has officially entered the commercialization stage. Financial report data shows that in 2024, Yijia recorded revenue of 352.8 million yuan, a year-on-year increase of 256%.

As the world's first drug for the causal treatment of IgA nephropathy, Naifon is the second approved product of Everest and is also the trump card product in its current pipeline. The sales of this drug have been highly anticipated by the market since its launch.

In October and November 2023, Naifon was approved in Macau and mainland China respectively; in October and November 2024, Naifon was approved in Taiwan and South Korea respectively, and was successfully included in the 2024 National Medical Insurance Catalog. Financial report data shows that in 2024, Naifon recorded revenue of 353.4 million yuan, a year-on-year increase of 1581%.

Before being included in the medical insurance, Naifon was priced at 23,800 yuan per bottle. On January 1 this year, Naifon officially reduced its price to 5,000.04 yuan per bottle. After medical insurance reimbursement, the price is about 1,000 yuan per bottle, and 1 bottle can be taken for 1 month.

After being included in the medical insurance, what is the impact on the sales volume of the product? In the above meeting, Luo Yongqing mentioned, "In the first quarter of this year, more than 10,000 patients have been using Naifon, which I think is in line with our expectations. I believe that with the implementation of the medical insurance catalog, it can be implemented very smoothly around the second quarter, and the sales volume at that time will be more objective."

In order to improve the market coverage of Naifon, Luo Yongqing revealed in the above meeting that Everest plans to expand the sales team of Naifon to 200 people in 2025, which is expected to cover more than 80% of the market potential.

Regarding overseas market sales, Luo Yongqing further mentioned, "This contribution of the entire overseas market may mainly occur in 2026 and after 2026."

Looking for BD opportunities for kidney disease drugs

In addition to the above two flagship products, Everest currently has a third commercialized product - Itramod (trade name in mainland China: Weishiping; trade name in Hong Kong, Macao and Taiwan: Weichangning), which is mainly used to treat moderate to severe active ulcerative colitis in patients aged 16 and above. In April 2024, Itramod was approved in Macau, China, and was successfully commercialized in Macau in the same year. According to the announcement, the drug was included in the "Catalogue of Hong Kong and Macao Drugs and Medical Devices Urgently Needed in Clinical Practice in Nine Cities in the Guangdong-Hong Kong-Macao Greater Bay Area of Guangdong Province (2024)" through the "Hong Kong-Macao Drug and Medical Device Access" policy, and the first prescription was issued in Guangdong Province in December 2024.

However, judging from the revenue data, the contribution of this drug to the company's performance is still in its infancy. On December 17, 2024, Everest announced that the National Medical Products Administration had accepted its application for a new drug marketing license for Itramod. In this performance announcement, Everest further stated that the application is expected to be approved in 2026.

With the approval and commercialization of products, Everest's distribution and sales expenses will further expand in 2024. Financial report data shows that its distribution and sales expenses in 2024 will be 508.1 million yuan and 231.4 million yuan in 2023.

As a company that has achieved breakthroughs through license-in, in addition to the three commercial products mentioned above, Everest Medicines also has Cefepime-Taniborbactam, Zetomipzomib, and EVER001, which are all imported projects.

Among them, the research and development of Cefepime-Taniborbactam has made the fastest progress. According to the performance announcement, it is expected that the new drug application for Cefepime-Taniborbactam will be submitted in mainland China this year. This is also an antibacterial drug, and its development indication is complicated urinary tract infection. Everest Medicines has rights in Greater China, South Korea, and Southeast Asia.

Zetomipzomib is currently developing an indication for autoimmune hepatitis and is currently in Phase 2a clinical trials.

EVER001 has two indications under development, namely membranous nephropathy and Gram-negative bacterial infection, which are in Phase 1b/2a and Phase 1, respectively. According to Everest, based on the company's global rights to EVER001 in the field of nephrology, it is actively seeking strategic cooperation opportunities outside of China.

In terms of self-research, Everest is developing four projects: personalized tumor vaccines, tumor-associated antigen vaccines, immune-modulating tumor vaccines, and autologous CAR-T. All of them are currently in the early clinical stage. The fastest personalized tumor vaccine has started IIT research (clinical research initiated by researchers).

According to the financial report data, Everest's R&D expenditure in 2024 was 528 million yuan, and this figure was 540.1 million yuan in 2023.

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