Fukai summary: cut into the ADC track, Baili Tianheng reached the peak after listing. Author |Sichuan fan if you want to say that the most amazing company in the chemical pharmaceutical sector in 2023 is none other than Baili Tianheng, the previously unknown Sichuan company Baili Tianheng after its listing in January 2023, from the first day of listing 2875 yuan shares, the highest rise in one year to 157$33 shares. 466 for the whole yearWith a rise of 4%, Baili Tianheng made Hengrui Pharmaceutical, a veteran company in the chemical pharmaceutical sector, 17The annual increase of 8% has been tearful, from less than 10 billion at the time of listing to 40 billion in a year, and the market value growth rate of Baili Tianheng has broken the heart of Kelun Pharmaceutical, a veteran pharmaceutical company in Sichuan, in the face of its own market value of 30 billion. 
The big bet on the ADC track won hempBaili Tianheng, a local pharmaceutical company in Wenjiang District, Chengdu, is the first company to successfully land on the Science and Technology Innovation Board in 2023, and it is also the first listed company on the Science and Technology Innovation Board in Wenjiang District. It has a business segment of chemical drug preparations and Chinese patent medicine preparations and an innovative biological drug business segment, and has a full range of drug R&D and production capacity including small molecule chemical drugs, large molecule biological drugs and antibody drug conjugates (ADC drugs). As an enterprise with a history of nearly 30 years, Baili Tianheng started with generic drugs in the early days, and there are also mature products on the market, but the company's revenue has increased from 120.7 billion yuan shrank to 70.3 billion yuan, showing a downward trend year by year, the reason is that the company's generic drug products have entered the national centralized drug procurement list, and the company has not won the bid, resulting in the loss of more market share of related products. Obviously, the old generic drug business of Baili Tianheng is facing the impact of centralized procurement pressure and intensified market competition, which cannot support the company's market value, and the company's bright spot depends on the innovative drug business that is actively transforming. Specifically, looking at the assets and business composition of Baili Tianheng, Baili Tianheng has R&D centers in China and the United States, 1 manufacturer of macromolecular biological drugs and antibody drug conjugates (ADC drugs), 2 manufacturers of chemical drug preparations, 1 manufacturer of chemical APIs, 1 manufacturer of chemical intermediates and 2 pharmaceutical marketing companies, and has become a chemical pharmaceutical enterprise with the ability of "R&D-production-marketing" full life cycle commercial operation.
Baili Tianheng's independent R&D pipeline of innovative biological drugs is mainly antibody protein drugs. These include bispecific antibodies, quadruspecific antibodies, multi-specific antibodies, monoclonal antibody ADCs, bispecific antibody ADCs and other pipelines. According to the R&D progress disclosed in the prospectus, Baili Tianheng has independently developed 16 innovative biological drugs, covering 8 innovative double and multiple antibody research projects, 7 ADC research projects and 1 fusion protein research project, of which 9 varieties have entered the clinical stage, and 5 are global exclusive varieties, with significant scarcity. Among them, SI-B001, a bispecific antibody with rapid progression, has been in 6 phase II clinical studies on multiple epithelial tumors such as non-small cell lung cancer, colorectal cancer, esophageal squamous cell carcinoma, and head and neck squamous cell carcinoma, and is expected to be approved for marketing in China from 2024 to 2025. The quad-specific antibodies GNC-038, GNC-039 and GNC-035 have all entered phase Ib clinical trials, making them the first three tetra-specific antibodies in the world to enter the clinical research stage. In December 2023, Baili Tianheng announced major good news, the company and BMS reached a cooperation on its world's first EGFR HER3 bispecific antibody ADC, with a potential total transaction volume of up to 8.4 billion US dollars, and a down payment of 800 million US dollars, winning the first place for ADC to go overseas, and the total transaction value of a single ADC drug will be the highest in 2023. Boosted by this positive situation, Baili Tianheng subsequently won the highest stock price in 2023.
The room for future growth may be overdrawnAlthough the stock price performance of Baili Tianheng in the first year of listing can be called perfect, but it may also overdraft the company's future valuation, Baili Tianheng's research investment is not large among its peers, but based on its size and scale, long-term R&D investment is still quite difficult. Like most innovative drug companies on the Science and Technology Innovation Board, Baili Tianheng is in a state of loss due to high R&D investment, and from 2019 to 2021 and the first half of 2022, Baili Tianheng's net profit attributable to the parent company was 773090,000 yuan, 3790160,000 yuan, -9999130,000 yuan and -13.8 billion yuan, and the net profit attributable to the parent company after deducting non-profits continued to be negative. According to the 2023 annual performance forecast recently disclosed by Baili Tianheng, it is expected that the net profit attributable to the owners of the parent company in 2023 will be -7about 300 million yuan, a year-on-year decrease of about 159%. In comparison, Baili Tianheng's R&D investment has increased from 1$8.1 billion increased to $2. in 20217.9 billion yuan, and the proportion of R&D expenses to revenue increased from 1503% to 3497%。In the first three quarters of 2023, Baili Tianheng's core bispecific antibody and bispecific antibody ADC products have entered the middle and late stages of clinical trial, and the R&D expenses are as high as 5100 million yuan, a year-on-year increase of 7977%。
In 2021, Baili Tianheng's first bispecific antibody ADC was approved for clinical trial in China, and its multiple technology platforms with differentiated value were gradually formed, and they were all independently developed, and the bispecific antibody ADC with global independent intellectual property rights was launched, and the clinical progress was also relatively rapid. 2023 is a big year for domestic ADCs to go overseas, and the transaction between Baili Tianheng and BMS has further attracted the attention of the domestic ADC track. Innovative drugs are generally a high-tech barrier, high threshold and high-risk thing, and the probability of success is extremely small, especially now that the competition has entered the white heat, Baili Tianheng's achievements have been partially realized, which also led to Baili Tianheng after the good announcement in December last year, the stock price began to enter a round of *** market value has exceeded Kelun Pharmaceutical's Baili Tianheng, there is currently no innovative drug on the market, coupled with the extremely expensive research and development of innovative drugs, dynamic PE, weighted return on net assets are negative Baili Tianheng, Even if there are good expectations and a good future in ADC, the four-fold increase in a year and poor fundamentals have also made it carry a heavier burden. Disclaimer: The information published by Fukai Finance does not constitute investment advice, and accordingly, the investment is at your own risk, and this article is original by Fukai Finance.