On September 25, 2023, Youzhiyou Bio-B (02496) was officially listed on the Hong Kong Stock Exchange. As a scarce target of double antibodies, it has attracted a lot of investor attention when it was listed.
According to Zhitong Financial APP, in the IPO stage, Youzhiyou Biotechnology entered into a cornerstone investment agreement with Optics Valley Health, Chuxing Yourui and Puhua Kaizhi, and the three institutions subscribed a total of 651380,000 offer shares, with a subscription amount of about 1HK$0.6 billion, accounting for 338%。
On the second day of listing, Youzhiyou Biotech closed up 215%, reflecting the "gold content" of the scarce target of Hong Kong stocks. It's just that when investors thought that this was the beginning of a bio-innovative pharmaceutical company to the peak, they didn't expect it to be over.
On September 27, it peaked at 19 in a hurryAfter 8 Hong Kong dollars, Youzhiyou Biotech opened the "All the Way **" mode. From September 27 to October 3, the company's stock price fell "four times in a row", and the lowest share price came to 14HK$6, compared with the issue price of HK$16**875%。Although the company successfully stopped falling and closed up on October 4, the trading volume on that day was only 8640,000 shares, after the trading volume fell below 100,000 shares, the ** trading volume of Youzhiyou Biotechnology never exceeded the level of 100,000 shares.
This also means that a week after the listing, Youzhiyou Biotech has been "abandoned" by market funds, and there are still nearly 6 months before the cornerstone is lifted.
The stock price has plunged seriously, and the scarce target is difficult to stop the cornerstone**.
In fact, from the perspective of business and product market, there are still highlights in the technical strength and commercialization prospects of Youzhiyou Biotech.
Zhitong Financial APP understands that BSAB is an artificial protein that can recognize and specifically bind two antigens or epitopes, and can simultaneously block the biological functions mediated by antigen epitopes or make antigen cells bind more closely.
In recent years, the global BSAB market has grown rapidly due to the deepening understanding of the pathogenesis of various diseases and the rapid development of the most advanced MAB. In 2021, the global BSAB market reached $3.8 billion. With further breakthroughs in technology and clinical research, it is expected to further increase to $58.6 billion by 2030. In 2021, the size of China's BSAB market will be 100 million yuan (RMB, the same below), and it is expected to increase to 251 in the futureWith a compound annual growth rate of 7%, it is expected to reach 61.5 billion yuan by 2030.
Among them, the core product M701 is a recombinant BSAB that targets cancer cells expressing human epithelial cell adhesion molecule (EPCAM) and human cluster of differentiation 3 (CD3) expressing T cells.
It is reported that the M701 is an EPCAM CD3 BSAB focusing on **MA and MPE. The Company has completed the Phase I clinical trial of M701** malignant ascites (MA) in January 2022 and is currently conducting a Phase II clinical trial to evaluate the efficacy of M701 in combination with systemic malignant ascites (MA) patients. In addition, the Company also initiated a Phase Ib II clinical trial of M701** malignant pleural effusion (MPE) in China in November 2022.
According to the 2023 interim report data disclosed by Youzhiyou Biotech, in the direction of malignant ascites (MA), Youzhiyou Biotech is currently conducting a phase II clinical trial to evaluate the efficacy of M701 alone ** combined with systemic ** (including targeted**, immuno** or chemotherapy)**MA, and good data have been observed. In the direction of malignant pleural effusion (MPE), Youzhiyou Biotech is currently conducting a phase IB II clinical trial of M701**MPE in China, and good data have also been observed.
However, at present, the core varieties of Youzhiyou Biotechnology are only in the phase II clinical stage, and without the support of commercial products, its valuation is under huge pressure.
Zhitong Financial APP observed that after October last year, the share price of Youzhiyou Biotechnology plunged rapidly, and as of February 20 this year, the company's share price was only 8HK$74, down 45 from the issue price38%, which is obviously well below the subscription of cornerstone investors at the IPO stage**. Now, there is only one month left before the listing ban period on March 24 this year.
This means that once the listing ban period is over, Youzhiyou Biotech needs to ensure that the stock price is higher than HK$16 in order to ensure that cornerstone investors do not lose money, but in terms of the current internal situation of the company and the market environment, the difficulty is very huge.
Commercialization is far from quenching thirst.
As mentioned above, judging from the current daily trading volume and turnover, Youzhiyou Biotech has fallen into a "liquidity trap" and has been forgotten by the market. The reason for this phenomenon is not only that it is facing the problem of cash exhaustion, and it is difficult to rely on core varieties and pipelines to support future commercialization expectations.
Financial data show that in 2021, 2022 and the first half of 2023, the other income of Youzhiyou Biotech will be 127980,000 yuan, 25600,000 and 69190,000 yuan, lack of commercial product income. At the same time, the company's net loss for the current period was about 14.9 billion yuan, 18.9 billion yuan, 865680,000 yuan, of which 27% will increase year-on-year in 2022. In this regard, Youzhiyou Biotech admitted that it was mainly affected by the increase in R&D expenditure.
At present, financing and borrowing are the main ways to support the daily operation of Youzhiyou Biotech.
Zhitong Financial APP observed that in 2021, 2022 and the first half of 2023, the net cash from Youzhiyou Biofinancing activities was 810340,000 yuan, 24.1 billion yuan and 49 million yuan, in this case, its cash flow is only enough to barely support the expenditure of the year. As of the end of June last year, it had only 7,644 cash and cash equivalents left50,000 yuan. Without further financing, it is uncertain whether such cash flow will be able to sustain operations and R&D in 2024.
According to the company's plan, the BLA application for M701** malignant ascites (MA), which is the core product of Youzhiyou Biotech, will not be submitted until the first quarter of 2025, which means that the company still needs to continue financing to commercialize the product.
In addition, there is a practical problem in front of Youzhiyou Biotech: whether the commercialization of M701 can achieve "hematopoiesis" for the company.
From a market perspective, according to Frost & Sullivan, the market size of China's MA** is expected to increase from 10.7 billion yuan in 2021 to 12.4 billion yuan in 2025 and 14.7 billion yuan in 2030, while the market size of China's MPE** is expected to increase from 11.6 billion yuan in 2021 to 13.2 billion yuan in 2025 and 15.3 billion yuan in 2030.
Although both MA** and MPE** in China have the potential to form a market of 10 billion yuan in the future, because MA and MPE are often associated with malignant tumors in multiple organs with poor prognosis, patients with advanced cancer can rarely benefit from marketed drugs, and there are few approved drug candidates for **MA and MPE.
Taking the domestic market as an example, at present, none of the domestic chemotherapy, immunosuppressant and anti-angiogenic drugs have been approved by the State Food and Drug Administration for the use of **MA or MPE, and no drugs have been included in the recommendations of the clinical guidelines for MA or MPE in China, which makes it difficult for the domestic MA and MPE** market to develop in the optimistic direction predicted by the market.
Obviously, it is difficult for investors to bet on a company with "no hope", and under the double blow of shrinking market value and liquidity dilemma, even if Youzhiyou Biotech has the aura of "Hong Kong stock double resistance scarce target", it will inevitably disappear from the field of vision of investors.