The high value of EVER001 is related to the market it is in. The potential treatment population is huge, the clinical burden is heavy, and effective treatment is scarce, which determines that the field of kidney disease is a super blue ocean market. Take the primary membranous nephropathy market as an example. As the most common pathological type of adult kidney disease, there are nearly 2 million cases of primary membranous nephropathy in China, and the total number of patients in the United States, Europe, Japan and other countries exceeds 200,000.

Primary membranous nephropathy can cause renal failure. The "Future landscape for the management of membranous nephropathy" published in the Journal of Clinical Nephrology in August 2023 showed that if left untreated, 14% of patients with persistent nephrotic syndrome may develop renal failure at 5 years, 35% at 10 years, and 41% at 15 years. Unfortunately, no specific drug has been approved in the world. The main treatment method in clinical practice is the off-label use of rituximab, which has obvious limitations:

About 30% of patients have no effect, and among the effective group, half of the patients still suffer from nephrotic syndrome, and 1/3 of the patients will still progress to end-stage renal disease. For this reason, primary membranous nephropathy is currently the number one cause of dialysis, accounting for as high as 37%, even exceeding the total of diabetic nephropathy and hypertensive nephropathy dialysis (about 30%). Therefore, the sales of a clinically proven drug for the treatment of primary membranous nephropathy will not be too low. EVER001 can not only treat primary membranous nephropathy, but also a total of 4 primary glomerular nephropathy and secondary lupus nephritis.

Therefore, EVER001 has attracted much attention in the market. The multiple advantages of mechanism and molecule give it higher value expectations. As a BTK inhibitor, EVER001 acts on the upstream of the disease pathogenesis, reducing the activation, proliferation and differentiation of B cells, thereby reducing the autoantibodies produced by B cells. In addition to B cells, BTK inhibitors can also produce immunomodulatory effects on a variety of cell types. At present, the B cell-targeted antibodies that are being explored more in the field of kidney disease, including rituximab, CD38 antibodies or BAFF/APRIL antibodies, can only affect specific subpopulations of B cells.

At the same time, EVER001 is one of the few oral small molecule drugs, which further raises the "upper limit". On the one hand, it provides additional safety advantages, allowing treatment to be stopped when necessary, and can quickly restore B cell function after drug withdrawal; on the other hand, it provides more possibilities for the exploration of combined therapies. There are many therapies under development for kidney disease, and drugs with different mechanisms may complement each other. EVER001 has good safety and obvious compliance advantages brought by oral administration, so it has great potential for combined use in the future.

Compared with similar BTK inhibitors, EVER001 has unique advantages in molecular design. BTK inhibitors are divided into three categories: covalent irreversible, non-covalent reversible, and covalent reversible. At present, among the BTK inhibitors with the fastest progression of primary membranous nephropathy in the world, only EVER001 belongs to the covalent reversible design concept, which has comprehensive advantages such as better selectivity, stronger target binding ability, and less multi-off-target toxicity. It is for this reason that EVER001 may bring greater clinical value and ultimately reflect higher commercial value.

At the same time, the efficacy of EVER001 can be maintained for a long time. Data show that the immune effect of both cohort 1 and cohort 2 remained stable during the follow-up period of drug withdrawal (up to 52 weeks). At the data cutoff date, the proportion of anti-PLA2R antibody levels in both groups decreased by 100%. The effect is outstanding, and the safety of EVER001 is also very good. Most of its adverse reactions are grade 1 or 2, and no typical adverse reactions of traditional BTK inhibitors are observed, and there is no severe liver toxicity.

Unlike tumor drugs, kidney disease, as a disease that requires long-term medication, has more stringent requirements for safety. Obviously, good safety is a plus for EVER001. Judging from the latest clinical data, EVER001 is not only significantly superior to existing drugs such as rituximab, but also superior to potential BTK inhibitor competitors, and is expected to meet the clinical needs of the primary membranous nephropathy market to a greater extent, thus achieving great success.

This also indicates that the BD expectations of EVER001 are starting to heat up. There are many cutting-edge therapies explored in the kidney disease market. HI-Bio, Chinook, and Alpine mentioned above have won the favor of major pharmaceutical companies with their core pipelines and created multiple huge acquisitions. This not only reflects the market's high recognition of the value of innovative kidney disease therapies, but will also become an important reference for the valuation of EVER001.

EVER001 also allows the market to see the possibility of reshaping Everest's valuation. Based on a steady and steady approach, Everest has set a step-by-step strategic goal of license in, license out, and then independent research and development to go global. However, the excessive success of the license in model has made the market believe that Everest only has the logic of "introduction" and ignores other values. The release of the latest data of EVER001 shows that the company is accelerating towards the third stage of its strategy and is able to deliver on all expectations. Not only is it introduced, Everest Medicines has the rights to develop EVER001 for the treatment of kidney disease worldwide. The subtext is that it has achieved the development of EVER001 from 0 to 1 in the field of primary membranous nephropathy.

This is not easy. Because there is great heterogeneity in the response of patients with this disease to treatment, coupled with the difficulty of long-term management and prognosis, the research and development is extremely difficult. For this reason, kidney disease is an area that BTK inhibitors rarely involve. The Insight database shows that when Everest Medicines entered this field in September 2021, only Hengrui Medicine's SHR-1459 among the 22 BTK inhibitors in China applied for membranous nephropathy.

It can be said that the research and development of EVER001 in the field of primary membranous nephropathy is based entirely on Everest Medicines' own understanding, exploration and practice, and finally achieved "breaking the ice", which verifies its comprehensive R&D capabilities and there is no R&D short board. Therefore, Everest Medicines has the ability to continue to expand new molecules and develop new indications, ensuring that its layout in kidney disease and more fields continues to deepen, bringing more high-value "global equity" products. The company's outstanding forward-looking layout capabilities in the past have guaranteed this.

For a long time in the past, kidney disease has always been a niche field due to its complex mechanism and long clinical cycle. Traditional clinical studies of kidney disease use "hard" endpoints such as death and end-stage renal disease as the main evaluation indicators, facing comprehensive pain points such as long-term follow-up, which to a certain extent has caused relatively few high-quality clinical trials of kidney disease. However, since 2021, first the KDIGO guidelines recommended that the proteinuria reduction index be used as a reasonable alternative endpoint for drugs to alleviate the progression of IgA nephropathy, and then Naifenkang became the first FDA to approve the first IgA nephropathy drug based on an alternative clinical endpoint of proteinuria reduction, indicating that the research and development threshold of kidney disease has been greatly reduced.

It is for this reason that the kidney disease market has shown a hot trend in recent years. Everest Medicines has achieved early layout and completed the positioning, proving the extraordinaryness of the management. Behind this, the company has built a successful combat system. In specific disease areas, Everest usually combines global resources through its own top scientific research team to build capabilities from R&D, clinical and even subsequent global commercial operations.

Therefore, in the field of kidney disease, Everest's understanding is absolutely industry-leading, which ensures that the company can continuously explore potential molecules in the field of kidney disease and formulate appropriate clinical strategies to ensure the transformation of R&D results and maximize global value. In the conference call, the company stated that it will promote the corresponding internationalization of EVER001 based on the benefit dimension in the future. It can be said that the breakthrough of EVER001 seems accidental, but it is inevitable. In the future, Everest will bring more surprises to the market in terms of R&D and going overseas. This process will also be accompanied by the switching of the company's valuation logic.

The hope of spring is always buried in the cold winter, and great changes usually come from the darkest moments. In the past few years, the development of China's innovative drug industry has exceeded everyone's expectations. The sudden change in the environment caught many pharmaceutical companies off guard. Everest also failed to meet market expectations for a time, and its stock price fell to a freezing point. But it is precisely the thinking and sowing in response to extreme challenges in the past few years that has driven the company's rebirth.

In September 2022, with the joining of Luo Yongqing, Genting Neway launched a series of strategic reforms. On the one hand, it has straightened out the efficient strategic approach of "focusing on the blue ocean + dual-wheel drive", completed the layout in the fields of kidney disease, anti-infection and autoimmunity, and strengthened the layout of self-research and mRNA technology platforms. On the other hand, it has promoted the reshaping of the company's culture, united people's hearts and enhanced combat effectiveness. Thanks to this, Genting Neway has quickly ushered in a new life. Since 2023, three commercial products have been launched. Now the "dual-wheel drive" model is about to enter the harvest period. It can be said that although a tuition fee was paid before 2022, the company has gained the ability to cross the cycle and successfully regained the recognition of the market. Since the beginning of this year, its stock price has risen by more than 120%. Being able to constantly reshape itself in turmoil indicates that Genting Neway's future path will become wider and wider. This is not only the story of Genting Neway, but also the fundamental logic of China's innovative drug industry.

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