Recently, the "one-piece elimination announcement" may make Tengsheng Brii Bio-B (02137) "bleed".
On March 4, the Shenzhen Stock Exchange and the Shanghai Stock Exchange respectively announced the adjustment of the Hong Kong Stock Connect standard, and Brii Biosciences was removed from the list of Hong Kong Stock Connect, effective today.
Affected by this news, Brii Biosciences-B (02137) fell sharply for two consecutive days. On the 4th, its stock price fell sharply, falling 2706%, which is almost the most tragic one in the removal list. On the 5th, its stock price continued to decline, falling more than 28% intraday, and finally closed down 1774% to 102 Hong Kong dollars, with a total market capitalization of 7HK$44.2 billion.
Zhitong Financial App).
Falling nearly 45% in two days, this paper exclusion announcement undoubtedly hurt Brii Bio-B. However, as the most tragic one in the list, Brii Bio's successive sharp declines are not just superficial appearances. So, what will be the "undercurrent" hidden under the paper?
Consecutive years of losses, the first half of the revenue was only 00.1 billion yuan.
From the perspective of business performance, Brii Bio-B is "hurt", or it is not unrelated to its "unsatisfactory" fundamentals.
Founded in May 2018, Brii Biosciences is a biopharmaceutical company spanning China and the U.S., focused on the discovery and commercialization of innovative medicines in infectious diseases, liver and lung diseases, COVID-19 and HIV. In July 2021, Brii Biosciences successfully listed on the Hong Kong Stock Exchange.
The company was successfully listed on the Hong Kong Stock Exchange only three years after its establishment, which shows the strong driving force of capital behind it. According to the previous prospectus, on the eve of the listing, Brii Biosciences brought together star capital such as Boyu Capital, Tonghe Yucheng, and ARCH Venture Partners.
However, it should be noted that since its listing, Brii Bio's share price has been down, from 22The HK$25 issue** has fallen all the way to HK$1 today. This may also be related to the performance of its core products that have not yet been commercialized and have been losing money year after year.
According to Zhitong Finance App, Brii Biosciences is currently building a pipeline of more than 10 innovative product candidates, focusing on infectious diseases and central nervous system diseases. The company's key projects are mainly HBV projects in China and PPD MDD projects in the United States. In addition, the Company retains the option to authorize the introduction of two additional innovative HBV projects from its partners. Last year, Brii Biosciences announced the discontinuation of its COVID-19 neutralizing antibody, its only commercialized product, which contributed to all of its revenue in 2022.
This means that none of the products developed by Brii Bio have been commercialized, except for the discontinued COVID-19 neutralizing antibodies.
Brii Biosciences).
The fact that the core product has not yet been commercialized is clearly reflected in Brii Bio's fundamentals, which have only started to record revenue since 2022 and net profit has been in the red for consecutive years.
According to relevant financial report data, from 2020 to 2022, the company's revenue will be 000 million yuan, 0 billion yuan, and 05.2 billion yuan, the net loss attributable to the owners of the company was 119 billion yuan, 416.4 billion yuan, 48.4 billion yuan, with a cumulative loss of about 5.8 billion yuan in three years. As of the first half of 2023, the company achieved revenue of 00.1 billion yuan, the net loss attributable to the owners of the company was 1900 million yuan.
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Although it has been losing money year after year, Brii Bio is not actually a "bad money" company.
According to the financial report data, from 2020 to 2022, the company's cash and cash equivalents were 103.5 billion yuan, 285.5 billion yuan, 119.1 billion yuan. It can be seen that even if it loses money year after year, Brii Bio is still not bad for money overall.
Consecutive years of losses are still not bad money, why is this?
It is understood that Brii Biosciences mainly takes the path of "asset-light", mainly introducing innovative products from abroad through the Lisence In model, rather than a biotech that is fully independently developed. This means that compared with pharmaceutical companies that take the route of independent R&D, Brii Bio's R&D expenditure is not large. It is reported that from 2020 to the first half of 2023, the company's R&D expenses were 87.6 billion yuan, 49.5 billion yuan, 44.1 billion yuan, 20.2 billion yuan, decreasing year by year.
However, it should be noted that in the innovative pharmaceutical industry that focuses on R&D capabilities, R&D capabilities are the "hard power", which is "easy" for Brii Biosciences, which follows the Lisence In model, although it is "easy" to grow, but its strength is not "hardcore" enough.
Can new hepatitis B drugs turn things around?
Everyone has heard of the hepatitis B virus (HBV).
According to the World Health Organization (WHO), hepatitis B virus (HBV) is the most common serious liver infection in the world, accounting for more than 2In 9.2 billion patients with chronic HBV infection, chronic HBV infection is marked by the persistence of HBV surface antigen (HBSAG) for 6 months or more, and about 900,000 people die each year from HBV-related complications.
In China, the HBV** market is largely untapped, so there is a large patient population with unmet needs**. According to Brii Bio's semi-annual report, China is currently the world's largest HBV market, with 87 million infected people and 200 million susceptible people.
It is reported that once the hepatitis B virus forms cccDNA in liver cells, it is difficult to completely eliminate it. Functional ** is an ideal ** goal recommended by hepatitis B ** guidelines at home and abroad: that is, to maintain HBSAG negative after stopping antiviral**; HBV DNA is undetectable in serum; Liver biochemical indexes were normal, and liver tissue lesions improved.
This means that, relying on the large market of hepatitis B functional**, Brii Bio's main core products are expected to drive the company's overall performance upward.
According to Zhitong Financial App, Brii Biosciences is committed to ending hepatitis B from prevention to the end of hepatitis B. **In terms of products, there are three major products: BRII-179 (VBI-2601), BRII-835 (VIR-2218), BRII-877 (VIR-3434), and PreHEVBRI for prophylaxis, which has been approved for commercial use in several countries.
Among them, BRII-179 (VBI-2601) is a novel recombinant protein-based HBV immune** drug candidate that can express Pre-S1, Pre-S2 and SHBV surface antigens, and is designed to induce enhanced B cell and T cell immunity. BRII-835 (VIR-2218) is an N-acetylgalactosamine (galnac)-conjugated siRNA targeting all HBV viral RNAs that blocks viral transcription, reduces viral proteins, and alleviates immunosuppression.
Although both drugs were introduced, Brii Bio has developed a unique combination** with BRII-835 and BRII-179 synergistic to induce the body** to achieve the effects of the HBV virus.
This combination** provides Brii Bio with a core competitive advantage – according to Brii Bio's announcement, the combination of BRII-835 and BRI179** for chronic HBV infection** is safe and well tolerated, and induces a stronger HBSAG (hepatitis B surface antigen) antibody response compared to the drug alone.
However, it should be noted that Brii Bio's previous clinical data that fell short of expectations is worrying.
It is known that the clearance of hepatitis B virus surface antigen (HBSAG) (HBSag<005IU ML) is the core indicator of functionality**. Based on this indicator, Brii Bio's Phase II clinical trial data for BRII-835 and BRI179 in combination with or without interferon were not as good as those for BRII-835 alone plus interferon.
Brii Biosciences previously released data showing a 48-week HBsAg clearance rate of 30 for BRI835 in combination with interferon** chronic hepatitis B8%。In the clinical data published this time, only two of the 25 patients who can be evaluated have achieved HBSA** below the lower limit of quantification (LLOQ), which means that the HBsAg clearance rate is only 5%. This means that the combination of BRII-835 and BRI179 has a negative effect, and the HBsAg clearance rate of patients is reduced. Based on the performance of this clinical data, Brii Bio's stock price fell by more than 30% at that time.
Therefore, it is still too early to conclude that Brii Bio's new hepatitis B drug will turn the tide against the situation. But in fact, with Brii Biosciences being removed from the Hong Kong Stock Connect list, there is not much room for investors to imagine.