As an investor who has been following the innovative medicine sector of Hong Kong stocks for a long time, the Hong Kong stock capital market has continued to be sluggish recently, showing a rare situation of continuous decline. Shareholders have begun to panic, causing many high-quality companies to be affected.

In particular, in the field of innovative drugs in ophthalmology, the author noticed that Zhaoke Ophthalmology, as the leading company on the racetrack, dropped by nearly 40% in just 3 trading days in February, which led to many discussions and speculations.

After browsing the stock bar, I found that the most talked about topic was mainly due to the fact that the results of the low-concentration atropine NVK002 application for marketing by Zhaoke Ophthalmology partner Vyluma in the US FDA have not yet been announced, and market sentiment is tense.

Let's just use this incident to discuss some of the author's own opinions on NVK002's listing.

1. No atropine is on the market yet, pay attention to the progress of the domestic market

As can be seen, NVK002 is an atropine eye drop with a globally patented formula, low dosage, no preservatives, and high stability. It is mainly aimed at relieving the deepening of myopia in children.

Previously, through a strategic cooperation with the US company Vyluma, Zhaoke Ophthalmology obtained the right to clinical development and commercialization of NVK002 in Greater China, South Korea, and specific Southeast Asian countries. This means that Vyluma will continue to be responsible for the clinical registration and marketing of NVK002 in the US, while domestic clinical reporting and commercialization work is dominated by Zhaoke Ophthalmology, and is independent of the US in various procedures.

Numerous literature and clinical studies have confirmed that low-concentration atropine eye drops have significant effects in controlling myopia in children and adolescents, but due to the shortcomings of the instability of current hospital formulations, the shelf life is relatively short.

NVK002 solves this problem very well. The storage period is expected to be about 24 months, providing patients with more stable and long-lasting treatment options. At the same time, it also contains no preservatives, and its patented formula is protected worldwide.

Considering the remarkable effects of low concentration atropine eye drops in myopia control and the advantages of NVK002 in addressing atropine instability, this collaboration undoubtedly has great potential and value for Zhaoke Ophthalmology.

Judging from the market pattern, there is currently no atropine drug to delay myopia on the market in China. Zhaoke Ophthalmology's NVK002 is expected to become the second low-concentration atropine drug approved for marketing in China.

Since the review procedures in China and the US are independent of each other, the basis for the submitted clinical data is also different. The author believes that as investors, we should pay more attention to NVK002's clinical results and reporting progress in China.

2. Both doses in the Mini CHAMP trial showed efficacy, and domestic new drug applications are being planned to advance

In June 2023, JAMA Ophthalmology published the results of Vyluma's phase III clinical trial of CHAMP in the US, showing that 0.01% concentration of atropine can effectively slow eye axis lengthening and progression of degrees in children aged 6 to 10, and is safe to use and well tolerated; 0.02% concentration showed poor performance at individual measurement endpoints.

On the Chinese side, NVK002, whether at 0.01% concentration or 0.02% concentration, successfully reached the main curative end point in the Phase III one-year clinical trial (Mini CHAMP) conducted by Zhaoke Ophthalmology.

According to the Zhaoke Ophthalmology Bulletin, data showed that compared with the use of placebo, 0.01% concentration and 0.02% concentration of NVK002 showed differences in statistical and clinical significance in reducing the deepening of myopia in children and adolescents, as well as good tolerability and safety.

According to reports, Zhaoke Ophthalmology indicated during last year's roadshow that the company will use domestic clinical data as the main basis to promote the listing of NVK002 as a new drug in China.

On the other hand, Mini CHAMP has shown high clinical quality, providing further strong support for its future therapeutic applications.

Mini CHAMP is a randomized, double-blind, placebo-controlled, multi-center clinical study involving 16 centers and enrolling a total of 526 children and adolescents. During the one-year clinical trial, the dropout rate of patients remained within 10%, and the subjects' compliance with medication was as high as 95% or more.

Good control of the patient dropout rate means that patients participating in the trial have a higher retention rate during the trial, making the test data more representative and reliable. In addition, good patient adherence to medication also means that patients are using the medication correctly according to the doctor's instructions, which is critical to obtaining accurate test results.

The author believes that with good clinical data and clinical quality, NVK002's next domestic new drug application process is worth looking forward to.

3. Summary

Overall, under the current trend of early onset and high incidence of myopia among young people, the overall myopia rate among young people in China has reached 52.7%, of which 35.6% are elementary school students, 71.1% are middle school students, and 80.5% are high school students. Taking effective measures to prevent and control myopia has become a top priority. As can be seen, Zhaoke Ophthalmology is actively promoting the clinical progress of NVK002 in China.

From an investment perspective, Zhaoke Ophthalmology's stock price has fluctuated and adjusted to an all-time low. From a rational point of view, as the company's NVK002 and other ophthalmic products progress and commercialization progress one after another, their value will eventually be reflected in the performance of the capital market. We can look forward to the subsequent boost in the capital market performance and valuation repair of Zhaoke Ophthalmology.