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Blue Whale financial reporter Wang Jianwen.
Another domestic pharmaceutical company's semaglutide injection has been approved for bariatric clinical trials.
On the evening of February 5, Livzon Group announced that its holding subsidiary, New Beijiang Pharmaceutical, had been approved for clinical trial of semaglutide injection for weight loss indication. This is also the third domestic pharmaceutical company approved for this indication after Federal Pharmaceutical and Jiuyuan Gene.
In recent years, affected by factors such as the reduction of medical insurance prices, the performance growth rate of Livzon Group has gradually declined. Therefore, the company has also continued to increase research and development, and continued to deploy in the fields of microsphere preparations and innovative drugs.
Semaglutide was approved for bariatric clinical trials.
On the evening of February 5, Livzon Group announced that the company's holding subsidiary, New Beijiang Pharmaceutical, received a notice issued by the National Medical Products Administration (CDE) to approve semaglutide injection to carry out clinical trials for weight management indications in accordance with the technical requirements of biosimilars.
This also means that Livzon Group has become the third domestic manufacturer to be approved for the clinical trial of semaglutide injection for weight loss indication after Federal Pharmaceutical and Jiuyuan Gene.
As early as 2021, Semaglutide Injection was approved for Phase III clinical trial for hypoglycemic indications.
For this product, Livzon Group has high hopes. At the recent investor meeting, the company said that there are more than 100 million diabetic patients in China, and the follow-up weight loss indication market demand is wider, and the company will carry out reasonable production capacity planning according to the actual situation, and we currently plan to reserve 2000-40 million doses in terms of production capacity.
Judging from the current market situation, the market size of semaglutide is large. Taking Novo Nordisk, a leading semaglutide company, as an example, according to the company's recently released 2023 annual report data, its global revenue in 2023 will reach 2322DKK 6.1 billion, about 337$3.8 billion, up 31% year-on-year. Net profit 121$4.9 billion, a year-on-year increase of about 51%. Among them, semaglutide accounts for half of its performance. In 2023, the cumulative sales of Novo Nordisk Semaglutide products reached 14581.1 billion DKK, or about 211$800 million.
According to CIC data, China's semaglutide market also has great potential. In 2022, the market size of this product was about 2.5 billion yuan, and it is expected that by 2032, its market size will grow to 43.9 billion yuan, with a compound annual growth rate of 330%。
However, although the market size of semaglutide is huge, as early as 2021, Novo Nordisk's semaglutide injection (hypoglycemic indication) has been approved for marketing in China. On January 26, Novo Nordisk's oral semaglutide product for hypoglycemic indications was also approved for marketing in China.
In the future, even if Livzon Group's semaglutide products can successfully complete the phase III clinical trial and be approved for marketing, they will still have to face competition with Novo Nordisk.
The sales volume of digestive tract drugs declined, and the performance growth slowed down.
Founded in 1985, Livzon Group is a pharmaceutical group integrating R&D, production and sales of pharmaceutical products, including APIs, chemical drugs, traditional Chinese medicines, biological drugs and other fields. The main products include ilaprazole enteric-coated tablets, digestive tract products such as ilaprazole sodium for injection (Yilian) and bismuth potassium citrate (Livzon Dela), gonadotropin products such as urinary follicle-stimulating hormone for injection (Lishenbao) and urotropin for injection (Lebaode), as well as APIs and intermediates such as mevastatin, acarbose, colistin sulfate, phenylalanine, etc.
Among them, digestive tract drugs are Livzon Pharmaceutical's advantageous areas, and they are also the product categories with the highest proportion of the company's revenue. Among the many digestive tract drugs of Livzon Group, ilaprazole is the company's exclusive product, which is a proton pump inhibitor (PPI) independently developed by Livzon Group, which is mainly used for peptic ulcer.
In 2017, Livzon Group's product ilaprazole sodium for injection was approved for marketing, and in the same year, ilaprazole tablets were included in the national medical insurance list, and the sales of this product have grown rapidly since then. PDB data shows that by 2021, Livzon Group's sales of ilaprazole will exceed 1 billion yuan.
However, in the medical insurance negotiations in the fourth quarter of 2021, the ** of ilaprazole injection was significantly reduced, from 156 yuan to 71 yuan. As a result, the sales of this product will drop to 60.3 billion yuan. The sales growth rate of Livzon Group's digestive tract products has also gradually declined. In 2022, the company's sales of digestive tract products decreased by 6 percent year-on-year48%, accounting for 30 percent of the company's total revenue80% to 2744%。In the first three quarters of 2023, the sales of the company's digestive tract products fell again, with a decrease of 1293%。
Under this influence, the overall performance growth rate of Livzon Group also began to decline. In 2022 and the first three quarters of 2023, the company's operating income will be 1263 billion yuan, 965.5 billion yuan, a year-on-year increase76%;Achieved a net profit of 195.6 billion yuan, 162.4 billion yuan, a year-on-year increase10%。
In comparison, in the decade from 2012 to 2021, Livzon Group's operating income grew at a compound annual growth rate of 1323%, with a compound annual growth rate of 1700%。
Bet on microsphere preparations and innovative drugs.
The slowdown in the growth of traditional products has made Livzon Group set its sights on the research and development of new drugs. In recent years, Livzon Group has continuously increased its R&D investment in an attempt to expand the market through the development of new drugs. The company's key research directions are mainly focused on microsphere preparations and innovative drugs.
From 2020 to 2022 and the first three quarters of 2023, Livzon Group's R&D expenses were 88.4 billion yuan, 114.6 billion yuan, 142.7 billion yuan, 98.6 billion yuan, showing a continuous growth trend.
Among them, microsphere preparation is one of the key R&D directions of Livzon Group. Microsphere preparation refers to the microsphere or spheroid-like form formed by the dissolution or dispersion of drugs in natural or synthetic polymer materials. With this technology, the drug can be released slowly, extending the half-life of the drug.
According to the 2023 semi-annual report, Livzon Group currently has a total of 7 microsphere preparations under development, among which, triptorelin acetate microsphere prostate cancer indication has been approved for marketing, and in addition, the product has completed phase III clinical trials for endometriosis indication. In addition, the company has a variety of products such as aripiprazole microspheres for injection, octreotide acetate microspheres for injection, leuprolide acetate microspheres for injection, etc., which are in the early clinical or BE trial stage.
According to the data of Huajing Industry Research Institute, from 2015 to 2019, the market size of the domestic microsphere preparation industry increased from 22300 million yuan increased to 47400 million yuan, with a year-on-year growth rate of 17-26%. It is estimated that the market size of China's microsphere preparation industry will increase to 116 in 2024100 million yuan.
In terms of innovative drugs, in addition to semaglutide, Livzon Group is also laying out a new generation of innovative drugs for the digestive tract.
As an important product of Livzon Group, ilaprazole belongs to the second-generation proton pump inhibitor (PPI) products. However, compared with PPI, the new generation of antacids, potassium competitive acid blockers (P-CABa), have advantages in terms of onset of action, acid suppression time and number of doses.
Therefore, in March 2023, Livzon Group and Onconic Therapeutics Inc., a South Korean pharmaceutical companyA licensing agreement was signed for the introduction of a P-CAB product, Zastaprazan (JP-1366).
Under the agreement, Livzon Group is required to submit a request to Onconic Therapeutics IncMake a down payment of $15 million and pay no more than $1$1.3 billion in milestone payments. Livzon Group has access to the development, manufacturing and commercialization rights of the product in Chinese mainland, Hong Kong, Macau and Taiwan.
However, at present, there are three p-CAB products on the market in the domestic market, namely Takeda Pharmaceutical's vonora fumarate raw tablets, Luoxin Pharmaceutical's tegola raw tablets and Fosun Pharma's kepra hydrochloride raw tablets. In the future, Livzon Group's new products will still face fierce market competition.