The innovative ophthalmology drug market has always been one of the hot areas that the market has paid great attention to, especially in the field of myopic ophthalmology.

In recent years, based on the huge population base, the myopia rate in our country has continued to rise, and the myopic population has exceeded 600 million. Especially among children and young people, myopia has become a major public health problem in our country. Market data shows that at present, the overall myopia rate of children and adolescents in China is 53.6%, which is the highest in the world.

Despite the serious problem of myopia, there is still a shortage of drugs that can treat myopia on the market. This means that behind the myopia market, there is huge unmet treatment demand and broad market development space.

Recently, the low-concentration atropine drug under Sinqi Pharmaceutical was approved for marketing. The aim was to slow the progression of myopia among children and adolescents. As soon as the news was released, it quickly sparked a buzz in the market. Debon Securities predicts that the current annual cost of mainstream atropine in-hospital preparations is about 3,600 yuan. Under normal circumstances, Sinqi eye medicine products are expected to reach a sales peak of 10.18 billion yuan in the 3rd full year of marketing (that is, 2027).

The capital market reacted even more warmly to this. Since the product was approved, the market value of Sinqi Pharmaceutical has soared to nearly 27 billion dollars in a short period of time, which undoubtedly highlights capital's high recognition and expectations for the huge potential of the low-concentration atropine market.

Looking further at the competitive pattern in the innovative ophthalmology drug market, it can be found that companies such as Zhaoke Ophthalmology, Oconvision, and Hengrui Pharmaceuticals are also actively deploying in the field of low-concentration atropine. In particular, Zhaoke Ophthalmology, as the company developing the fastest clinical trials of low-concentration atropine drugs in China, has always attracted market attention.

From the latest annual report released by Zhaoke Ophthalmology, the author noticed that the company has submitted an NDA application for the marketing of its new NDA drug for low-concentration atropine NVK002, which means it is one step closer to the second low-concentration atropine drug approved for marketing in China. If this drug is approved, it will undoubtedly open up new market space for Zhaoke Ophthalmology and further enhance its market position and competitiveness.

However, although Zhaoke Ophthalmology has shown great strength in the development of low-concentration atropine drugs, judging from a valuation perspective, its current market value is less than 1 billion dollars, which is more than 30 times different from Sinqi Pharmaceutical.

Data source: Futubull

This difference in valuation makes the market value of Zhaoke Ophthalmology appear particularly undervalued. Considering that Zhaoke Ophthalmology has a potential second approved atropine drug and its broad prospects in the innovative ophthalmology drug market, its valuation level may be expected to return to the path of Xingqi Pharmaceutical, and the room for improvement is worth looking forward to.

Focusing on fundamentals, over the past year, Zhaoke Ophthalmology has continued to focus on the “R&D+Commercialization+Globalization” three-wheel drive strategy. From the clinical and commercial layout of product development to the expansion of the global market, it has shown many positive marginal changes. You might as well explore this further.

Focus on R&D to achieve clinical value and enhance endogenous hematopoietic function

When it comes to innovative pharmaceutical companies, their ability to innovate is undoubtedly a top priority. It is not only a reflection of the company's core competitiveness, but also the core driving force for the development of the entire pharmaceutical industry.

Financial reports show that in 2023, Zhaoke Ophthalmology invested 330 million yuan in R&D, an increase of 12.4% over the previous year, reflecting the company's steady progress in clinical progress and commercialization of various core products, laying the foundation for the upcoming blockbuster product delivery period. In addition, Zhaoke Ophthalmology has a cash reserve of 1.5 billion yuan, providing a solid guarantee for its subsequent R&D and commercialization.

By product breakdown:

1) NVK002: High clinical value, application materials have been submitted, and it is expected to become the second low-concentration atropine drug approved in China

NVK002, a low-concentration atropine drug aimed at alleviating the progression of myopia in children and adolescents, has carried out CHAMP clinical trials covering North America, Europe, and China worldwide. It is one of the largest, longest, and most comprehensive Atropine drug research projects in the global market.

In terms of the domestic market, Zhaoke Ophthalmology has completed a one-year Mini CHAMP trial in China with 526 subjects, and the number of ongoing two-year China CHAMP test subjects is 777.

According to the latest data from Zhaoke Ophthalmology, NVK002 at both 0.01% and 0.02% concentrations successfully reached the main effective endpoints in the phase III one-year clinical trial (Mini CHAMP) of NVK002. Compared with placebo, both drugs showed significant differences in statistical and clinical significance in slowing the development of myopia, and were well tolerated and safe, laying a solid foundation for future marketing of NVK002.

It is worth mentioning that the clinical quality of the Mini CHAMP trial has also been recognized by the industry. These data, where the dropout rate of patients was less than 10% and the dosage compliance of subjects was as high as 95% or more, not only fully demonstrated the rigor and reliability of clinical research, but also further highlighted the advantages of NVK002 in clinical application.

In foreign markets, NVK002 tested 600 people in CHAMP in the US. It has 3+1 year data support, providing rich data support for the safety and efficacy of the drug. Currently, Zhaoke Ophthalmology's partner Vyluma is also communicating with the US FDA about the NDA listing process.

The company mentioned in its annual performance report that the company has submitted new drug application documents to the regulatory authorities. Since the regulatory authorities have recently issued new policies and regulations relating to registration classification, the company is awaiting the relevant acceptance and registration guidelines.

2) Cyclosporine A (CsA) eye gel: plans to submit a new drug application to the State Drug Administration

As a self-developed product to treat dry eye, compared to similar ciclosporin drugs on the market, the advantages of cyclosporine A eye gel are not only reflected in its efficacy, but also in the great convenience it brings to patients.

In terms of frequency of administration, ciclosporin drugs currently on the market need to be used twice a day, while patients using ciclosporin A eye gel only need to use it once every night, which has achieved significant optimization. While greatly reducing the burden of medication use, it also improves patients' adherence to medication.

In terms of efficacy, compared to current ciclosporin drugs on the market, which require 7 to 8 weeks to improve symptoms, ciclosporin A eye gel can significantly improve patients' symptoms in just 2 weeks. The shortened course of treatment not only brought patients a faster rehabilitation experience, but also further enhanced the product's market competitiveness.

From a commercialization perspective, Zhaoke Ophthalmology is actively preparing a new drug application for ciclosporin A eye gel, and plans to submit relevant information to the State Drug Administration to move towards commercialization.

It is worth mentioning that ciclosporin A eye gel not only has potential in the domestic market, but also has global commercial rights and is protected by global patents. This advantage enables ciclosporin A eye gel to maximize its commercial value, bringing broader market prospects to Zhaoke Ophthalmology. Currently, the company is actively exploring overseas opportunities for this product, including communicating with the FDA about the US IND application and examining development possibilities in neighboring Asian markets, with the aim of further expanding the global opportunities for cyclosporine A eye gel.

3) BRIMOCHOL PF: Potentially best-in-class medicine for presbyopia

BRIMOCHOL PF is a drug specifically used to treat short-range vision loss due to presbyopia. Previously, Zhaoke Ophthalmology introduced its development and commercialization rights to Visus in Greater China, South Korea, and designated Southeast Asia regions.

Financial reports show that in January of this year, the company's IND application for using BRIMOCHOL PF to treat presbyopia in China was approved by the State Drug Administration, and research in the field of presbyopia treatment has made significant progress.

In previous overseas clinical trials, the company's partner VISUS announced positive top-line data for Brimochol PF in the US phase III key trial Brio-I. This data not only shows that the drug has reached the main research endpoints set by the FDA, EMA and MHRA, and achieved significant statistical improvements, but its efficacy can last up to 8 hours, ensuring effective treatment time once a day, and has good tolerability, providing effective data support for the company's clinical trials in the Chinese market.

4) TAB014: Enrollment of patients who have completed the phase III trial

Tab014 is a drug used by Zhaoke and Dongyao Pharmaceutical to treat wAMD (wet age-related macular degeneration). It is the first bevacizumab-based antibody to treat wAMD in the clinical phase in China, and the company's first innovative drug focused on post-eye diseases to enter phase III clinical trials.

At present, the company has completed the recruitment of Phase III clinical patients for TAB014 and will complete the trial within this year.

5) Further progress has been made in the generic drug product portfolio

Last year, Zhaoke Ophthalmology successfully launched the first commercialized generic ophthalmology drug, bemesol timolol eye drops (Jingbeiying), which are specially designed to treat glaucoma and ocular hypertension, especially for patients with primary open-angle glaucoma who have poor single-agent treatment.

At the same time, the company also actively submitted ANDA applications for bameprost, travoprost, levoprost, latanoprost and latanoprost to further enrich the company's glaucoma product portfolio and provide patients with more diverse and efficient treatment options.

In addition, the company's generic drug pipeline also includes epinastine hydrochloride eye drops for allergic conjunctivitis, and an ANDA application was submitted after completing clinical trials in 2023.

It is easy to see that from the promising low-concentration atropine NVK002 and cyclosporine A eye gel, to BRIMOCHOL PF eye drops, which are attractive in the market, to the successfully marketed Jingbeiying and more generic products, the potential value of Zhaoke's ophthalmology product pipeline is gradually being unleashed.

Innovate the omnichannel ecosystem and enhance the driving force for commercialization

Zhaoke Ophthalmology focuses on deepening and expanding traditional channels, continuously building commercial teams, establishing close cooperative relationships with many public hospitals and private ophthalmology hospitals or institutions across the country, and gradually forming an extensive sales network.

Being in the first tier in the field of innovative ophthalmology drugs, Zhaoke Ophthalmology believes that the future of commercialization needs to cover all channels of TOB to C and online and offline. Therefore, in addition to traditional ophthalmology hospitals, Zhaoke also covers emerging channels such as optometry centers, and makes full use of internet platforms, including Baoddeshi Tmall flagship stores, Jingdong pharmacies, social media, etc., to provide consumers with a more convenient and efficient drug purchase experience, while deepening brand promotion and interactive marketing, thereby increasing brand awareness.

On the doctors' side, in order to strengthen contacts and interaction with ophthalmologists, Zhaoke Ophthalmology has set up a public account “Zhaoke Expo” for the Chinese ophthalmologist community to regularly publish professional ophthalmology academic content, clinical cases, and the latest research results, providing a platform for ophthalmologists to learn and exchange. Since its launch, the public account has continued to grow in popularity. Currently, it has more than 15,000 followers, accounting for nearly half of the total number of ophthalmologists in China.

Go overseas and go global and open up new growth points

Going overseas is multiple verification of a company's brand, product quality, and market prospects. With a high-quality product pipeline, Zhaoke Ophthalmology has now gone overseas to South Korea, Malaysia and Thailand, involving its core products including NVK002, BRIMOCHOL and glaucoma drugs, and a medical device.

These collaborations not only successfully opened up new markets for Zhaoke Ophthalmology, but also further enhanced the company's popularity and influence in Southeast Asia and internationally, laying a solid foundation for its future development in other overseas regions.

According to reports, in the future, Zhaoke Ophthalmology will continue to further explore the Southeast Asian market and evaluate the potential for activities in more countries and regions such as Australia. The company will lay out the development and commercialization of innovative drugs from a global perspective to continuously enhance its competitiveness in the international market.

epilogue

All in all, the innovative pharmaceutical industry's dual attributes of “people's livelihood” and “technology” have laid the foundation for its long-term steady development.

It is easy to see from this annual report handed over by Zhaoke Ophthalmology that the company has anchored the potential for innovative ophthalmology drugs, showing steady continuous innovation strength and profit potential.

As an innovative pharmaceutical company with a potential second low-concentration atropine drug approved for marketing, I believe that as Zhaoke Ophthalmology continues to achieve its performance level, this growth will eventually be reflected in the capital market, and the company also has the potential for market revaluation.