On the morning of December 13th, Shiyao Group announced that it has entered into an exclusive authorization agreement with BeiGene for the development, manufacturing, and commercialization of the group's new methionine adenosyltransferase 2A (MAT2A) inhibitor (SYH2039), as well as any subsequent drugs composed of or containing this compound worldwide.

According to the agreement, Shiyao Group will receive a total advance payment of $150 million and has the right to receive up to $135 million in potential development milestone payments and up to $1.55 billion in potential sales milestone payments, as well as tiered sales bonuses calculated based on the annual net sales of the product.

Excluding tiered sales commissions, the total amount of the above-mentioned cooperation is as high as 1.835 billion US dollars, which is approximately 13.3 billion yuan at the latest exchange rate.

SYH2039 is a clinical candidate drug obtained by Shiyao Group through an AI driven small molecule drug design platform, with the potential to become a best in class anti-tumor drug. This platform uses AI technology to analyze the binding mode between target proteins and compound molecules, optimize molecular drug resistance design, and ultimately screen for highly active and selective small molecule MAT2A inhibitors.

At present, SYH2039 has conducted Phase I clinical trials in China, and preliminary data shows good safety, PK behavior, and PK-PD marker correlation. In the first three quarters of 2024, the revenue of Shiyao Group decreased by 4.9% year-on-year to RMB 22.686 billion, and the net profit decreased by 15.9% year-on-year to RMB 3.778 billion; Among them, the third quarter revenue and shareholder net profit decreased by 17.8% and 51.5% year-on-year, respectively.

Zhongtai International believes that the pharmaceutical business revenue of Shiyao Group will decrease by 7% year-on-year in 2024, and gradually recover from 2025 to 2026. The reasons include:
 Firstly, although the company stated that the newly approved tumor drugs Irinotecan, Amphotericin B Liposome, and Omeprazole, which were approved in 2024, have performed well in sales since their launch, it usually takes some time for the new drugs to go from market to volume. Moreover, the joint procurement of Jinyuli and Domesol will continue to be implemented in various regions from March 2024, so the price reduction of joint procurement will still have an impact on revenue in the fourth quarter and 2025.
 Secondly, Enbipu and Xuanning have been listed for nearly 20 years, and the possibility of a significant rebound in sales revenue in the short term is not high in the context of tight medical insurance cost control and intensified market competition.
 In addition, according to the third quarter situation, it is expected that due to the decline in demand for vitamin C and the decrease in caffeine prices, the revenue of raw material products, functional foods, and other sectors for the whole year of 2024 will be slightly lower than expected, and it is difficult to significantly recover in the short term.

As of press time, the stock price of Shiyao Group is HKD 4.79, a decrease of 4.39%, and the latest market value is HKD 55.7 billion; BeiGene's Hong Kong stock price was HKD 108.4, a slight decrease of 0.28%, with a latest market value of HKD 157.8 billion.

Source: https://pharm.jgvogel.cn/c1479067.shtml