Kunpeng Project
Editorial Department of this journal|Liu Zenglu Wu Haishan
Investors may not have to wait too long, and if it goes well, it will take two or three years to see the launch of a new generation of domestic ** drugs.
From the perspective of the global market, **drug** lasted almost a whole year, and the stock price of foreign **pharmaceutical giants began to ** since March. The domestic ** high point has been since September, although ** has fallen with the recent changes in the market, but there will still be intermittent single-day rises**.
Institutions are still optimistic about the follow-up of the domestic drug market, with the approval of new drugs and commercialization, Chinese pharmaceutical companies are expected to usher in a large market supported by performance in the future.
The tide of mergers and acquisitions in the domestic and foreign drug markets is surging
Since September this year, **medicine** has risen suddenly, and it has become a new outlet for the pharmaceutical industry.
For example, on the evening of November 23, the "vaccine giant" Zhifei Biotech announced that it planned to acquire 100% of the shares of Chen'an Biotech, and Chen'an Bio's ** drug "recombinant semaglutide injection" has been in the phase III clinical stage, and the R&D progress is in the forefront of China. In addition, the GLP-1 GIP dual-target receptor agonist and oral semaglutide tablets are in the preclinical stage. This acquisition means that the former vaccine giant has officially entered the first-class pharmaceutical industry.
Huaan**'s evaluation of the acquisition has opened up new ideas for the expansion of Zhifei's business segment, "with the expiration of semaglutide patent approval in China, companies that have prepared in advance can apply for listing" and maintain its "** rating".
In the past few years, Zhifei Biotech has attracted market attention because of Merck's HPV vaccine, and its performance has continued to improve. In the first three quarters, Zhifei Biotech achieved operating income of 3927.2 billion yuan, a year-on-year increase of 4115%；Net profit attributable to the parent company was 65300 million yuan, a year-on-year increase of 1646%；Non-net profit attributable to the parent was 63800 million yuan, a year-on-year increase of 1413%。
Not long ago, Zhifei announced that it had signed an agreement with GSK (GlaxoSmithKline), a multinational pharmaceutical company, to become the exclusive importer and distributor of GSK recombinant herpes zoster vaccine in the cooperation area, with a total purchase amount of 20.6 billion yuan from October 8, 2023 to December 31, 2026.
This acquisition is the latest large-scale commercial merger and acquisition in the field of first-class pharmaceuticals in China.
At the same time, in foreign countries, mergers and acquisitions in the first-class pharmaceutical industry are also continuing. On December 4, the Swiss pharmaceutical giant Roche announced the acquisition of Carmot Therapeutics, an American biotechnology company, to enter the first-class drug market. Carmot Therapeutics has three main clinical-stage subcutaneous and oral increin candidates, with CT-388 being the most dominant product in the Roche acquisition.
According to the explanation on Roche's official website, the R&D product is in the preparation stage of phase 2 clinical trials, and needs to be injected subcutaneously once a week, or can be used independently and in combination with patients to improve their weight. Levi Garraway, chief medical officer and head of global product development at Roche, said that the current Phase 1B data from the drug candidate CT-388 shows significant weight loss in patients, and these data also indicate the potential of the drug** for differentiation in obesity and related diseases. Obviously, the popularity of the GLP-1 GIP track is an important consideration behind Roche's entry into the first-class drug market.
Earlier, AstraZeneca agreed to buy the patent rights to China's Chengyi Biologics' GLP-1 drug ECC5004 for $2 billion**Eli Lilly & Company ended July 19The $300 million acquisition of obesity drug maker Versanis has a new drug in development, bimagrumab, which could allow patients to reduce fat mass while preserving muscle mass.
At the beginning of December, Novo Nordisk also invested more than $6 billion to expand the Danish factory, and the production capacity of the first drug Wegovy is expected to be further expanded. The project will be progressively completed between the end of 2025 and 2029.
Hao Miao, manager of Harvest Pharmaceutical, told this magazine: "There will definitely be more active business practices in the field of medicine. This market is very large, many companies at home and abroad have seen market opportunities, whether it is to do independent research and development, or through acquisitions, cooperative development and other extension methods, it is normal, and there may be a lot of business activities in the future. I believe that this market will always be active, and there will be many companies that want to participate, there is no doubt about it. ”
Companies participating in the global industrial chain are performing faster
Self-developed ** drugs are expected to be approved for marketing in two or three years at the earliest
The market is constantly calling for the pharmaceutical industry. In the first-class pharmaceutical sector, Hao Miao believes that companies participating in the global industrial chain, such as peptide CDMO companies, have quickly been reflected in their performance because foreign drugs were approved for marketing earlier and in rapid volume. It will take some time for companies to do independent product research and development, and it may not be reflected in the performance until the drug is approved for marketing. "But investors may not wait too long, if it goes well, it will be two or three years to see the launch of a new generation of domestic first-class drugs. Hao Miao said: "At that time, whether it is a generic drug or an innovative drug, it may see that domestic manufacturers have been approved, and at that time, the domestic domestic demand market will usher in a relatively large development, and the investment in the first-class drug sector may not be said to be biased from the theme, but a huge demand." ”
In the global first-class pharmaceutical market, Novo Nordisk and Eli Lilly can be called the two giants that deserve their name. There is still a gap between the domestic first-class drug market and international giants, but the layout of domestic enterprises is very positive. For example, as of August this year, China has 43 clinical trial projects of GLP-1** new drugs, accounting for 40% of the world's total, of which 11 companies have entered the clinical stage.
In terms of listed companies, many companies such as Hanyu Pharmaceutical, Huadong Pharmaceutical, Hisun Pharmaceutical, Aimeike, and Hengrui Pharmaceutical have made layouts in the field of first-class drugs. "Relatively speaking, there are indeed more domestic players than foreign countries for the same target, which is the reality of China. Not only in GLP-1, but also in many other popular areas, there are many Chinese players. Hao Miao said, "The participants are not only engaged in the research and development of terminal drugs, but also participate in the production chain of global blockbuster varieties." ”
In China, the participants of GLP-1 drugs can be divided into three categories: upstream GLP-1 raw materials and equipment suppliersMidstream GLP-1 API and CDMO companies;Downstream GLP-1 drug R&D and manufacturing enterprises and supporting injection equipment manufacturers (see Figure 1).
Naturally, the most attention is paid to the end product. At present, there are two ** pharmaceutical products that have been approved for marketing in China, namely benaglutide injection declared by Renhui Biotech and liraglutide injection of Huadong Medicine. From the point of view of ease of use, benaglutide injection needs to be injected three times a day, liraglutide once a day, and semaglutide once a week. Therefore, this is also one of the most important indicators to measure the best drug technology.
Chen Chen, a medical industry analyst at UBS** Research, said: "A number of relevant innovative drug companies have emerged in China, and their drug candidates have strong competitiveness. ”
Innovent Biologics' Maxdotide is a first-class product with rapid R&D progress in China. On September 12, Innovent announced that the company intends to place new shares to raise 23HK$5.6 billion, of which about 30% (i.e. about 7.).HK$0.7 billion) for the development, marketing and commercialization of IBI362 (Max Dou Peptide). The clinical phase is planned to be initiated by the end of 2023, and the clinical phase of the type 2 diabetes (6mg) indication study will be initiated in the first quarter of 2023. Previously, Cinda said that it expects to submit a marketing application for Masdotide in China from the end of this year to the beginning of 2024. Guolian** believes that the drug is expected to be commercialized in 2025.
Hangzhou Xianweida's ecnoglutide is also a drug with a rapid R&D process in China, and has undergone phase clinical trials for type 2 diabetes and obesity.
The clinical application for semaglutide injection submitted by Chia Tai Tianqing, a subsidiary of China Biopharmaceutical, on June 7 this year was accepted by the Center for Drug Review (CDE) of the National Medical Products Administration. In addition, 1 liraglutide injection has been submitted for marketing application.
According to the relevant person in charge of Gan & Lee Pharmaceutical, its self-developed GLP-1 drug product GZR18 has completed the dosing of the first subject in the phase IIB clinical trial. In addition, the drug is the first GLP-1 receptor agonist in China to evaluate the efficacy of the drug head-to-head with semaglutide injection.
Semaglutide's patent in China may expire in a few years, and many domestic pharmaceutical companies have begun to lay out the research and development of generic drugs, and when the patent expires, it can be approved for marketing in China. Hao Miao said.
Because of the hot sales of overseas first-class drug products, domestic upstream and midstream enterprises in the research and development of GLP-1 peptide APIs and CDMO companies have also benefited.
For example, Nuotai Bio is mainly based on peptides, supplemented by generic drugs, and as the raw materials of a variety of first-class drugs, the revenue of peptide independent products in 2022 will increase significantly by 126 year-on-year3%。In May of this year, the company signed 1$0.2 billion in intermediates orders.
Hanyu Pharmaceutical has 31 peptide API varieties that have obtained the "Drug Production License". In September this year, Hanyu Pharmaceutical said on the interactive platform that the weight loss and hypoglycemic GLP-1 peptide drug has entered the "FDA Shortage Drug List" in the United States, and in terms of APIs, Hanyu Pharmaceutical signed 21.9 billion yuan of GLP-1 peptide API commercial order. In November this year, Hanyu Pharmaceuticals once again received a request from "a large pharmaceutical company in the United States" for liraglutide injection0.3 billion yuan of purchase orders, which accounted for 14 percent of the company's total revenue in 202263%, accounting for 130 percent of overseas business in 202237%。
WuXi AppTec has deployed its peptide platform to provide integrated CRDMO services from drug discovery to commercial manufacturing, and the company said at the interim results conference that "70% of the growth rate of the new molecule TIDES business this year includes the production of GLP-1 dual-target blockbuster drugs". WuXi STA also announced in September that its subsidiary, WuXi STA Pharmaceuticals, has started the expansion of peptide production capacity at its two production bases in Changzhou and Taixing, and after the expansion is completed, WuXi STA will add a number of peptide solid-phase synthesis production lines, and the new production capacity is expected to be put into use in December 2023, when the volume of the company's peptide solid-phase synthesis reactor will increase from the originally planned 20,000L to 32,000L.
In addition, Gloria expects the total solid-phase synthesis capacity to exceed 10,000L by the first half of 2024. Since 2022, Lanxiao Technology has become a major leader in the field of peptides. Navitas has broken the foreign monopoly on microsphere technologies such as chromatography fillers for biopharmaceuticals, and by the end of 2022, the number of customers has expanded to more than 1,000. Haofan Biotech can provide 160+ kinds of peptide synthesis reagent products for downstream customers, and there are more than 1,900 downstream customers.
Recently, the market has been calling for the pharmaceutical industry. In the first-class pharmaceutical sector, Hao Miao believes that companies participating in the global industrial chain, such as peptide CDMO companies, have quickly been reflected in their performance because foreign drugs were approved for marketing earlier and in rapid volume. It will take some time for companies to do independent product research and development, and it may not be reflected in the performance until the drug is approved for marketing. "But investors may not wait too long, if it goes well, it will be two or three years to see the launch of a new generation of domestic first-class drugs. Hao Miao said: "At that time, whether it is generic drugs or innovative drugs, domestic manufacturers may be approved, and the domestic domestic demand market will usher in a relatively large development. ”
**Future development trend of medicine:
Multi-target, oral, long-acting
Historically, the history of bariatric drugs is very long, as early as 2014, the first GLP-1 portable agonist, liraglutide, was approved and once became the mainstream of the market (see Figure 2).
From the perspective of the global weight loss market, Novo Nordisk's liraglutide (SAXENDA) has seen steady growth in sales since its launch in 2014, with sales of $1.5 billion in 2022, a year-on-year increase of 24%. Until June 5, 2021, semaglutide injection (wegovy) was approved for marketing. Because of its better efficacy, GLP-1RA has become the most popular target in the first-class drug market. According to Pfizer**, the overall global GLP-1RA market size will exceed $90 billion by 2030, which is expected to open a new growth cycle of biomedicine.
At present, the first research direction in the field of GLP-1 is multi-target, oralization. Founder ** said in August that the current overseas research and development trend of GLP-1 drugs has moved from single-factor regulation to multi-factor regulation, such as multi-component, multi-target, etc., for example, Novo Nordisk developed a mixed component of smex and canaglitide, and Eli Lilly is committed to developing dual-target or even triple-target GLP-1 drugs. "GLP-1 drugs have now evolved from a single target to a dual-target, three-target, and new dosage forms for oral administration. Chen Chen said to this magazine.
At present, the only oral GLP-1RA on the market in the world is Novo Nordisk's semaglutide (Rybelsus). The League of Nations** believes that oral semaglutide has a stronger weight loss effect, showing a higher weight loss effect than semaglutide (Wegovy, 24mg) has a better weight loss effect, and is expected to become the next blockbuster drug of Novo Nordisk.
Under this trend, domestic pharmaceutical companies are also taking active actions. For example, in addition to the approved liraglutide drugs, Huadong Medicine has also self-developed and introduced a variety of single, double and three-target GLP-1RA;Hengrui Pharmaceutical's layout in the field of GLP-1RA also includes GLP-1 GIP dual targets, GLP-1 GCGR dual targets, oral peptides and oral small molecule agonists.
Novo Nordisk and Eli Lilly still have strong sales momentum
The prospects of domestic pharmaceutical companies are promising, and the cost advantage is obvious
The global **drug** has been in the United States since the beginning of the year. Runuo and Nordisk March single month**135%, 15% in a single month in August, and 44% in the year as of December 11. Notably, in September of this year, Novo Nordisk replaced LVMH (LVMHFUS) became the most valuable listed company in Europe. Eli Lilly, which is also the leading pharmaceutical company, also reached % and 22% in March, April and August this year, and as of December 11, the stock price for the year was 61%.
But into December, Novo Nordisk's ** began to fall. Some Wall Street institutions have become "cautious" about the future performance of the two giants in the secondary market. For example, Niall Gallagher, manager of global investment management company Gam Investments, said in a recent interview that he has reduced Novo Nordisk's ** position by about 50% because the hype around its ** drug is so crazy that the company's ** valuation has soared.
He said that while he did not see any competitors from Novo Nordisk and Eli Lilly, which also makes the drug Mounjaro, for quite some time, Gallagher noted that there are no permanent patents for pharmaceutical companies' drugs, and patents expire at some point. As of the end of July this year, the largest heavy stock was Novo Nordisk. But by the end of October, Novo Nordisk had become the fifth-largest holding.
However, putting aside the market sentiment and returning to the perspective of the market demand and company fundamentals, the growth potential of Novo Nordisk and Eli Lilly is still very huge. For example, Wegovy and Mounjaro are the most discussed drugs on the market, and they both belong to the new class of GLP-1 (glucagon-like peptide-1) receptor agonists.
Total sales of Novo Nordisk Wegovy in the third quarter reached DKK 9.6 billion (13.).US$600 million), an increase of 28% from the previous quarter and eight times that of the same period last year. The financial report also shows that the sales revenue of Novo Nordisk** drug in the United States increased by 254%, and the revenue of the American market reached 239DKK 8.4 billion (34.4 billion$1.6 billion), accounting for 7889%。
Although lower than Novo Nordisk, Eli Lilly's ** drug Mounjaro (tirpatide) revenue also increased by 652 in the third quarter43% to 140.9 billion US dollars, the United States revenue increased by 1212 times, revenue outside the U.S. increased by 4711%。In the first three quarters of 2023, the total revenue of this product increased by 13% year-on-year55 times to 29$5.8 billion, of which the cumulative revenue of the U.S. region reached 27$2.9 billion, accounting for 9228%, a year-on-year increase of 2383 times!In May last year, Mounjaro was first approved in the United States as a diabetes drug. Although Mounjaro is currently only approved for diabetes, its efficacy in terms of ** is comparable to that of Novo Nordisk's star drug Wegovy.
Novo Nordisk's Wegovy and Eli Lilly's Mounjaro sales are expected to reach $21 billion this year and increase to $53 billion by 2028, according to FactSet. According to data from Novo Nordisk, by August 2023, the global branded drug market will grow by 936%, of which the growth rate in the United States reached 1321%, and the market growth outside North America was 666%。Growth in the United States has been particularly striking. According to the Centers for Disease Control and Prevention (CDC), about 42% of Americans suffer from obesity. In the European Union, about 17% of people were obese and 36% were overweight in 2019.
At present, the market demand for GLP-1 products continues to grow, and Novo Nordisk's Wegovy is currently only available in the United States, the United Kingdom, Germany, Norway and Denmark, and the latest news is that it will be launched in Japan in February next year, making it the first market in Asia.
On the other hand, Eli Lilly's ** drug Zepbound has been approved by the FDA on November 8. The market is very optimistic about the drug's data. According to a recent report released by data analytics firm GlobalData, Zepbound's sales in the U.S. could reach $4.1 billion by 2031. Analysts at Wall Street investment bank Cowen believe that the approval of Zepbound is likely to become the highest-selling drug within five years.
And Frost & Sullivan estimates that by 2025, there will be 15 obese people in the world500 million. China has the largest obese population in the world, and it is increasing year by year. According to the Report on Nutrition and Chronic Diseases in China (2020), more than 50% of adult residents in China are overweight and obeseThe prevalence of overweight and obesity among adults is 343% and 164%。According to Frost & Sullivan's estimates, there will be about 2 obese people in China by 2025700 million.
According to Sullivan data, by 2030, according to the current calculation of semaglutide 500 injection, the market size of China's GLP-1** drug is expected to reach 65.8 billion yuan by 2030.
Domestic **medicine** has been ignited since September this year. **Drug index (8841718.)WI) was close to 13% in August, and fell back after October. The drug index was up 4% in November, and as of December 12, it was more than 2%. However, the market is still full of confidence in the ** drug market.
According to public information, the domestic core patent of semaglutide (Wegovy) will expire on March 20, 2026. "It is very normal for the drug sector to appear for a while, because there are still very few GLP-1 drugs approved in China, and the plate has a certain theme attribute, but in the long run, whether it is a generic drug or an innovative drug, more and more GLP-1 has been approved for ** indications in China, which is a high probability. In the long run, there is a lot of room for weight loss. Hao Miao said.
Chen Chen said: "GLP-1 has not only become a hot track this year, but will also continue to become the focus of domestic innovative drugs in the future. With the first batch of drugs being declared for marketing in 2024 or one after another, its popularity will continue, and its commercialization is worth looking forward to. ”
From the perspective of listed companies, their secondary market performance is greatly affected by drug research data and business activities. For example, on December 5, Changshan Pharmaceutical (300255SZ) share price** nearly 20%. In the past three months ended December 12, Changshan Pharmaceutical**180%.
From a fundamental point of view, Changshan Pharmaceutical's operating income in the first three quarters of 2023 was 11400 million yuan, down 3647%;The net profit attributable to shareholders of the listed company was a loss of 38,833060,000 yuan, down 677 from the same period last year10%, performance and stock price show "** two days".
The reason why Changshan Pharmaceutical has attracted much attention is its drug abenatide. Although the company announced that the clinical trial of ebenatitide it carried out is indicated for type 2 diabetes mellitus and does not involve obesity indications. There are also no clinical trials of ebenatide for obesity or weight loss, and there is no revenue from efficacy products. But the market is still full of expectations. At present, Changshan Pharmaceutical has completed the clinical trial of ebenatide and has not yet submitted an application for a new drug certificate to the National Medical Products Administration.
Hao Miao said: "The research and development of innovative drugs needs to do a lot of preclinical and clinical trials, and then apply for approval and marketing. From the perspective of our investors, it is difficult to predict in advance whether a truly innovative drug will eventually be approved for marketing. ”
Of course, there are also analysts who are cautious about the future prospects of ** drugs. According to market researchers, the flow of obese patients is likely to be increasingly constrained due to HC (human capital) budgets, and as a result, more effective products may gain a larger share of new patients. In fact, one of the main reasons why some Wall Street investors are not optimistic about the stock prices of Novo Nordisk and Eli Lilly is the issue of affordability, especially whether health care spending can better cover such drugs.
But at this point, domestic pharmaceutical companies have a natural advantage in cost. "There will be more domestic players, and the result may be that the ** of domestic GLP-1 drugs will be significantly lower than overseas, and the affordability of consumers will be much higher. Hao Miao said. Guolian** also pointed out in the research report that in the generic drug track, semaglutide analogues from companies including Huadong Pharmaceutical, Federal Pharmaceutical, Livzon Pharmaceutical and other companies are in the phase III clinical stage, and are expected to seize the low-end market through lower costs and selling prices in the future.
(This article was published in the December 16 issue of Market Weekly.) The ** mentioned in this article is for analysis only and does not constitute investment advice. The views of the guests are personal and do not represent the position of this journal. )