Health & Beauty

According to Huacheng Import and Export Data Observation, as of April 16, 46 innovative drug listed companies have disclosed their 2022 annual reports, of which 34 have achieved positive revenue growth, with Shanghai Yizhong experiencing the largest year-on-year increase, reaching 5686.75%. From the perspective of net profit attributable to the parent company, 36 companies have achieved positive growth, among which 5 listed companies, including Haipu Rui, Kailaiying, Anke Biotechnology, Boteng Co., Ltd., and Fangsheng Pharmaceutical, have achieved performance growth of over 100%.

The main reason why some innovative pharmaceutical companies have achieved performance growth is that core innovative drugs have entered the harvest period. Entering 2023, the innovative drug market is gradually warming up, with frequent favorable policies, and pharmaceutical companies accelerating their layout of innovative drugs.

Multiple companies have seen significant performance growth

Due to turning losses into profits in the first year, Shanghai Yizhong became the first listed company to "pick U" on the Science and Technology Innovation Board in 2023. The company stated that 2022 is the first fiscal year after the approval of its core product, paclitaxel polymer micelles for injection, and it marks a significant turning point in the company's journey towards product commercialization.

Benefiting from this, Shanghai Yizhong achieved a turnaround from losses to profits. In 2022, the company achieved a net profit attributable to the parent company of 143 million yuan, compared to a loss of nearly 4 million yuan in the same period last year; The net profit after deduction was 103 million yuan, with a loss of 17.7327 million yuan in the same period last year, as reported by Huacheng Import and Export Data Observation.

In addition, Kelun Pharmaceutical achieved a revenue of 18.913 billion yuan in 2022, a year-on-year increase of 9.46%; Realized a net profit attributable to the parent company of 1.709 billion yuan, a year-on-year increase of 54.98%. The company stated that its subsidiary, Kelenbotai, has reached a cooperation agreement and paid exclusive license with MSD for its innovative research and development project. In 2022, Kelenbotai confirmed revenue of 730 million yuan from MSD, increasing its net profit attributable to the parent company by 300 million yuan.

Recently, the AACR (American Association for Cancer Research) conference will be held. According to data from Southwest Securities, more than 20 A-share and H-share innovative drug companies will disclose data on innovative products at this AACR conference, including Hehuang Pharmaceutical, Nuocheng Jianhua, Hengrui Pharmaceutical, Baekje Shenzhou, Xinda Biology, etc. Huacheng Import and Export Data Observation Report.

Many listed pharmaceutical companies also disclose their research and development progress to the market through announcements. As stated in the announcement released by Alice on April 4th, the Phase Ib clinical trial of the self-developed class 1 small molecule targeted drug, Vometinib, targeting advanced NSCLC patients with EGFR or HER2 mutations, has been approved for drug clinical trials, and the first-line treatment indications for the insertion mutation of the 20 exon of Vometinib in NSCLC have been approved for drug clinical trials.

Institutions are also paying attention to the innovative drug layout of listed companies through research. According to incomplete statistics, over 200 pharmaceutical companies have been surveyed by institutions since the beginning of this year, many of which belong to the field of innovative drugs.

Dongfang Securities believes that innovative drugs are worth long-term optimism, and the innovative drug industry is still at the bottom and is expected to gradually recover. On the one hand, the results of the medical insurance negotiations met the expected price reduction, the impact of cost control slowed down, and innovative drug varieties traded for quantity at price, gradually realizing performance; On the other hand, the review and approval policy continues to encourage innovative drugs and accelerate the speed of review and approval of innovative drug varieties.

Pharmaceutical companies accelerate the layout of innovative drugs

Many industry insiders interviewed by reporters believe that innovative drug research and development remains the biggest driving force for the long-term growth of the pharmaceutical industry. With the support of multiple favorable policies, innovative drugs may experience rapid development this year, and the industry's investment and financing landscape is expected to rebound.

Innovative drugs are the core direction for the future development of the entire pharmaceutical industry and also the direction encouraged and supported by policies, "Xu Minsui, a partner of Chengluo Capital, said in an interview with reporters. In fact, the path to innovation is not easy, and failure is a high probability event. But there are always companies that rely on down-to-earth research and development, effective market development, and high-quality business expansion to achieve success.

In terms of research and development investment, out of the 46 innovative drug listed companies that have disclosed their annual reports for 2022, a total of 5.87 billion yuan has been invested in research and development, an increase of 32.31% compared to 4.437 billion yuan in 2021. Huacheng Import and Export Data Observation Report.

Entering 2023, listed companies are paying more attention to investing in the research and development of innovative drugs and adhering to the direction of innovative research and development. For example, Biotech plans to raise no more than 1.64 billion yuan and invest 1.289 billion yuan in new drug research and development projects; Mr. Zeng Shaogui, the controlling shareholder and actual controller of Hanyu Pharmaceutical, intends to provide the company with a free loan of no more than 200 million yuan to support the research and development of innovative drug projects. Huacheng Import and Export Data Observation reports.

In terms of policy, the recent favorable policies related to innovative drugs have been further intensified. Recently, the Drug Evaluation Center of the State Drug Administration released the "Guidelines for Accelerating the Review of Application for Market Licensing of Innovative Drugs by the Drug Evaluation Center (Trial)", which states that innovative drugs specifically designed for children, innovative drugs used to treat rare diseases, and innovative drugs included in the breakthrough treatment drug program are eligible for accelerated review of market licensing applications, with clear communication, communication, and evaluation time limits. This is conducive to accelerating the launch process of innovative drugs.

In the view of Yu Xiaoming, a consultant at Jufeng Investment, with the further implementation of policies and the continuous promotion of innovative drug research and development, the speed and quantity of innovative drugs launched in China this year may further improve, especially in the fields of cancer, cardiovascular disease, etc.

In terms of the market, the innovative medicine sector has been frequently favored by funds recently. According to Oriental Wealth Data, as of April 14th, the index of the innovative medicine sector rose by more than 8%, with several stocks showing impressive gains, such as Shouyao Holdings, Haichuang Pharmaceutical, and Yahong Pharmaceutical, all of which rose by more than 30%.

However, Xu Minsui reminds that many innovative drug listed companies with high market value and influence are still struggling with losses. On the one hand, it is due to the high R&D investment, and on the other hand, due to the fierce competition for me-too targets, the increase in new entrants has led to a significant decline in terminal prices. Investors should carefully study the company's product line, market space, marketing capabilities, as well as subsequent financing and research and development capabilities, and carefully choose investment targets.