For many, 2023 should be memorable and difficult. Because in this year, changes in the internal and external environment, policy adjustments and other factors, everyone is struggling to ...... in the stock game
Of course, whether it is conceptual hype or real performance assistance, there are still some subdivisions on the tuyere this year, and a maverick growth curve has been walked out of the market against the market.
Investing is about taking advantage of the trend. Where eyes are gathered, money will follow.
So what is potential?
To some extent, the hot spot is the trend in the secondary market. So, looking forward to 2024, what are the other segments and opportunities worth paying attention to in the biopharmaceutical sector?
Hot section 1: weight-loss drugs
The first is the ** drug sector, although since the beginning of this year, the popularity of the ** drug sector has been quite high, but this does not prevent me from judging that this sector will continue to heat up next year.
1) The sales of overseas ** drugs continued to exceed expectations
In 2024, with the increase in the production capacity of first-class drugs, the sales of overseas weight-loss drugs will continue to grow.
Recently, there was an article in "Nature" in which analysts ranked second only to drug K in the top 10 drugs by global sales in 2024 with $16.1 billion in sales. If calculated based on the full range of semaglutide products, the total sales are expected to exceed 28 billion US dollars, becoming the global sales champion.
This craze for first-class medicine will also continue to spread from the west to the east. In the future, every time Eli Lilly and Novo Nordisk announce their financial reports that exceed expectations, there may be accompanying investment opportunities in the entire domestic industrial chain.
From peptide API companies and pharmaceutical equipment companies in the upstream of first-class drugs, to API manufacturers and CDMOs in the midstream, they will all benefit.
In fact, this year, the popularity of API companies in the upstream of ** drugs has been quite high, such as Changshan Pharmaceutical and Nuotai Biotechnology, whose stock prices have risen as high as % this year.
*CDMOs in the middle of the medicine are also preparing for a rainy day. For example, WuXi AppTec urgently expanded its production capacity in the second half of this year, expanding the production capacity of peptides from 20,000 liters to 320 thousand. It is estimated that in 2024, the utilization rate of this part of the production capacity will also be on the right track, and the performance of WuXi will bring a certain increase.
2) Domestic first-class drugs with better effects are ready to go
A catalyst that cannot be ignored in China is that domestic ** drugs with better effects may be approved for marketing.
At present, Innovent Biologics' GLP-1R GCGR dual agonist IBI362 is the most advanced in China, and phase II clinical data shows that it can lose 186%, the effect is still good. Innovent previously expected the full Phase 3 clinical data of IBI362 to be read out by the end of this year and early next year. If the IBI362 data is good, domestic pharmaceutical companies that follow in the weight-loss drug track should also usher in a wave of investment opportunities.
However, compared with the upstream and midstream of ** drugs, the uncertainty of downstream weight-loss drug R&D companies will be higher. After all, the mutual roll of Novo Nordisk and Eli Lilly has raised the threshold of the ** medicine track too much.
In particular, the indication of weight loss is not quite the same as other diseases, and the effect of its drugs is very intuitive. So once the drug data is average, it will bring a lot of volatility to the stock price. This also requires that domestic downstream R&D enterprises should come up with a level of me too or even me better.
Take Shuodi Biotech as an example, as soon as the phase IIA clinical data of the oral ** drug came out, everyone could basically judge that it was difficult to compete with Eli Lilly and Novo Nordisk, so the stock price fell by 42% in one day.
In addition, Novo Nordisk's semaglutide and Eli Lilly's tirpatide bariatric indications have both applied for marketing in China, and it is only a matter of time before they are approved, so it can be expected that the competition for subsequent domestic weight-loss drugs will be quite cruel. In this case, everyone still has to maintain a certain sanity in the first-class drug boom.
Hot section 2: HPV vaccine
The nine-valent HPV vaccine is also an old Internet celebrity, and the imagination behind it does not need to be repeated. In the first half of this year, Merck's quadrivalent and nine-valent HPV vaccines were 35 in ChinaWith sales of $8.1 billion, it speaks for itself.
In 2024, the hot trend of 9-valent HPV vaccine will continue. In the aforementioned Nature** list, the HPV vaccine in 2024 ranked ninth on the list with global sales of $10 billion**.
If we focus on the domestic market, there are still certain variables in the domestic market in the future for Merck & Co., Ltd. and its domestic vaccine ** Shangzhifei Biotech.
At present, the domestic 9-valent HPV vaccine is gaining momentum, and the 9-valent HPV vaccines of Wantai Biotech, Walvax Biotech and Kangle Health are all in the phase III clinical stage. According to the current situation, the first to reach the end of success may be Wantai Biotechnology.
On December 14, Wantai Biotech said on the investor interactive platform that the on-site work of the V8 phase of the main clinical trial of the company's nine-valent HPV vaccine has been completed, and specimen testing is underway. If the data is good, Wantai Biotech may hope to unveil the blinding after the V8 data is perfected, and then apply for listing.
Although the follow-up Wantai Biology said that there is still suspense about the time of the launch of the nine-valent HPV vaccine, the capital market has been boiling, and Wantai Biology has recorded 3 daily limits in the last 5 trading days.
The excitement of the capital market is understandable, and the logic behind the domestic substitution of the 9-valent HPV vaccine is quite clear. The current market is dominated by Merck and is in short supply. If the domestic nine-valent vaccine is launched, it will still have the ability to seize a part of the market by virtue of its best advantages, which will also bring new investment opportunities to HPV vaccines.
However, for Zhifei Biotech, domestic substitution may be a ghost story, after all, the main source of its income is Merck's HPV vaccine.
Popular sector 3: self-exemption field
In addition to the above two plates that have been on fire for a while, this new sector may also have good opportunities next year.
1) The domestic self-exempt market began to explode
Globally, the imagination of self-immune drugs is considerable. In 2022, the global drug market in the field of autoimmunity reached US$132.3 billion, second only to oncology and infection.
However, in China, the self-exempt market has not been too large in the past, only about 3.6 billion US dollars in 2022, compared with the global 100 billion US dollars, the gap is still quite large. Even if it is the old medicine king Humira, the sales situation in China is not optimistic.
The reason behind this is, on the one hand, that autoimmune diseases are basically chronic diseases, which require long-term medication, and the domestic ability to pay is insufficientOn the other hand, domestic patients do not have enough awareness of autoimmune diseases, because autoimmune diseases are not as fatal as tumors, so the opportunities in the field of autoimmune diseases in the past have not been fully explored.
But now, this is changing as more self-exempt drugs enter health insurance at reduced prices, and everyone's pursuit of health continues to increase. Sanofi's IL-4R monoclonal antibody dopriyu is a good example of this.
I have seen the industry's ** disclosure that the annual sales of dupilumab in China are expected to reach 7 billion yuan. Although I knew that this drug was selling well, the figure of 7 billion still exceeded most people's expectations.
Of course, the big sales of dupilumab are just the beginning, and the subsequent domestic autoimmune market will continue to explode.
2) It's time for domestic substitution
As in other industries, the greater opportunity in the field of self-exemption lies in domestic substitution.
Even if dupilumab has been reduced in price and entered the medical insurance, it is still not cheap, and one needs 2780 yuan. For this kind of drug that requires long-term medication, ** is still the core pain point. This also leaves an opportunity for domestic drugs to counterattack.
At present, for IL-4R targets, domestic Kangnuoya CM310, Hengrui Pharmaceutical's SHR-1819, Conrad's CBP-201, Zhixiang Jintai's GR1802 and Akeso's AK120 are all in phase III clinical trials. Among them, CM310 has already applied for listing, and if it goes well, it may have the opportunity to be approved for listing next year.
In addition, for a number of self-exempt fire targets, domestic alternative products are already on the verge of listing.
For example, Novartis' IL-17 monoclonal antibody, secukinumab, will have a revenue of 47 in 2022$8.8 billion. In response to this target, Zhixiang Jintai's cerikimab and Hengrui Pharmaceutical's SHR-1314 have submitted marketing applications.
and AbbVie's IL-23 inhibitor Skyrizi, which sold 53 percent in the first three quarters of this year$6.9 billion. For this target, Akeso's erokimab has also applied for marketing.
Overall, in 2024, there may be a number of domestic alternative products on the market in the field of self-exemption. With these new industry milestones reached, the popularity of the sector may continue to heat up.
Hot sector 4: ADC field
Finally, there is the ADC sector, which has been hot for two years.
2023 is a big year for global ADCs, and the main players are domestic pharmaceutical companies, and the license out transactions of domestic ADCs have exceeded dozens.
Some people may think that after a two-year boom period, ADCs will be flat in 2024, but I personally feel that there will still be investment opportunities in this sector next year.
1) Overseas ADC drug sales exceeded expectations
In 2023, the commercialization progress of several newly marketed ADC drugs around the world will basically exceed expectations.
Global sales of drugs like HER2 ADC DS-8201 have reached 11US$6.9 billion, an increase of 168% over last year;The FR ADC drug Elahere was just launched in November last year, and its sales in the first three quarters of this year have reached 2$1.2 billion, a pretty rapid increase;Trop2 ADC sales in the first three quarters were 7$6.4 billion, and sales are expected to exceed $1 billion this year.
The scale of the overseas ADC market is also expanding, which is equivalent to making a positive guide for domestic followers. It just so happens that next year should coincide with the commercialization of many domestic ADC drugs.
For example, SKB-264, the TROP2 ADC drug of Columbotech, has been declared for marketing and is expected to be approved for marketing in the second half of 2024. Elahere, which was introduced in East China, is expected to be approved for marketing in the first half of 2024. It is worth paying attention to whether these products can bring new investment opportunities to the ADC sector.
However, compared with overseas, the domestic payment capacity is relatively weak, so it is also necessary to observe whether the commercial performance of domestic ADCs can meet expectations after being approved for listing.
2) Domestic biotech ADCs continue to go overseas
This year, domestic pharmaceutical companies have more than dozens of license out transactions in ADCs.
Some people may think that after this round of ADCs going overseas in 2023, overseas leading pharmaceutical companies have almost bought ADC pipelines in China, and the popularity of domestic ADCs may drop next year.
But I personally think otherwise, the overseas of domestic ADCs should be expected to continue next year. Because ADC has basically become the standard configuration of global pharmaceutical companies, overseas big pharmaceutical companies have been paying attention to the ADC track, and as long as the domestic ADC data is enough to play, it should continue to attract overseas pharmaceutical companies to bet.
As long as the overseas transaction continues, the investment opportunity for biotech will always exist.
Because in essence, investing is actually a game of poor expectations. Although China has been experiencing a round of ADC investor fever, the expectation gap of the ADC track still exists.
In the current capital winter, most of the domestic ADC biotechs are still in an undervalued state, and once a large license out transaction appears, it will be able to bring a lot of investment value to these biotechs.
Therefore, from the above two perspectives, the domestic ADC sector is still worthy of continuous attention.