Upbeat Outlook on Phase III Clinical Data for Lazertinib
The authors are analysts of Shinhan Investment Corp. They can be reached at sehunjang@shinhan.com and shawn1225@shinhan.com, respectively. -- Ed.
3Q22 preview: Sales likely in line with market expectations
We now expect Yuhan to post sales of KRW486.6bn (+7.8% YoY) for 3Q22, in line with the market consensus of KRW491.9bn. Operating profit should come in short of the KRW19.6bn consensus estimate at KRW17.1bn (+161.9% YoY, operating margin of 3.5%).
Growth likely continued for pharmaceuticals after recording record-high sales in 2Q22, driven by the launch of a new incrementally modified drug (IMD) by subsidiary Addpharma and growth in prescription sales of LECLAZA (Lazertinib). Overall costs including R&D spend should have remained around 2Q22 levels in the absence of notable events.
Upbeat outlook on phase III clinical data for Lazertinib monotherapy
Yuhan, within 4Q22, is expected to release data on its phase III (LASER-301) clinical trial for Lazertinib as a monotherapy in first-line treatment of patients with EGFR-mutantnon-small cell lung cancer. Positive data will allow the company to expand into domestic and overseas markets for first-line treatment, with annual sales expected to exceed KRW100bn in the domestic market upon approval.
Expectations are high for the phase III trial, with phase II (LASER-201) data unveiled at the World Conference on Lung Cancer in August showing a median progression-free survival (mPFS) of 24.6 months. Although difficult to make a direct comparison, if the phase III data shows a longer PFS for Lazertinib than Tagrisso (mPFS of 18.9 months in the FLAURA trial as first-line treatment vs. 10.2 months of comparator drug, hazard ratio of 0.46), expectations should also grow for the Amivantamab/Lazertinib combo therapy as a first-line treatment. We will also need to pay attention to the clinical trial data on patients with central nervous system (CNS) metastases.
Retain target price with R&D momentum expected through 2023
In 4Q22, the announcement of LASER-301 trial results will be followed by the start of phase Ib trial and release of phase Ia data for the YH35324 candidate in treatment of IgE-mediated allergic diseases. R&D momentum should continue in 2023, with Yuhan expected to attend major conferences to unveil data on phase III clinical trial for the Amivantamab/Lazertinib combo therapy on patients showing resistance to Tagrisso (LACP cohort of MARIPOSA-2). Results of the FLAURA-2 trial, the phase III clinical trial of Tagrisso in combination with chemotherapy as first-line treatment, are also expected to be released in 2023. With market interest for EGFR-mutantnon-small cell lung cancer treatments to rise further in 2023, we recommend keeping an eye on the performance of Lazertinib in clinical trials.