(Report Producer/Author: Xiangcai Securities, Zhang Deyan)
First, see the position of the cycle: where is the current development of the pharmaceutical industry?
Policy review: Medical reform has shifted from drug compliance to medical service efficiency management
Drug review and approval of innovative drug supply side: the approval efficiency has been greatly improved, and the number of innovative drugs approved each year has been close to that of mature countries. Medical insurance fund: the payment end of the structural insurance connection, generic drug collection, innovative drug negotiation normalization, institutionalization, DIP/DRG focus on the landing. Medical insurance fund: the collection and procurement continued to expand, and the marginal impact continued to weaken.
Medical services: Establish incentive and constraint mechanisms with DIP/DRG innovative payment methods as the entry point. Impact on the industrial chain: medical services will become the main profit model, replacing the previous dependence on the pharmaceutical equipment model, and the pharmaceutical equipment will turn to the cost side, thereby promoting the localization rate and outsourcing power.
Market review: innovation, growth, marginal changes as the main line of investment, α, β market is wonderful
Butterfly change: what happened in the past of the industry, what stage is it now, and what will happen in the future.
Policy: The pharmaceutical-policy-promoted industrial upgrading framework is basically completed, and the industry will be promoted to innovation 2.0 Medical insurance-collection and innovation negotiation will be normalized and institutionalized, and the scope continues to expand, but the market has expected that medical-DIP/DRG will be fully implemented, and the behavior mode of medical institutions will change significantly.
Market: Insight into the underlying logic of the policy, looking for innovation, growth, marginal change as the main line of investment.
Second, the domestic pharmaceutical innovation ecology is in line with international standards, and the internationalization of the industry is about to break the situation
18A, the Science and Technology Innovation Board, and the Beijing Stock Exchange open up the primary and secondary markets to form a benign investment exit closed loop. The global biomedical track financing market continues to be hot.
Third, drugs open the source innovation cycle, driving the outbreak of upstream demand
Scientific service industry chain: consumer goods in the field of scientific research, Changpo niche market
Consumer goods in the field of scientific research: reagents, instruments, consumables in the three major fields, the global market size of about 160 billion US dollars in 2020, it is expected that there will still be a medium unit growth in the next 3-5 years.
Benefiting from the increase in R&D investment, stable demand side, policy immunity, and long slope track: global biomedical R&D investment has maintained a stable growth for a long time, and from the perspective of R&D expense rate, the R&D expense rate has risen rapidly in recent years, breaking the central range of about 15% since the 1980s. Driven by the epidemic, R&D investment is expected to continue to increase.
Changpo Track, which gave birth to a company with a large market value: second only to the drug and medical equipment track, the track that can give birth to a number of large market value companies, the leading companies Thermo Fisher Scientific and Danaher have a market value of more than 200 billion US dollars, ranking in the top 10 of the biomedical sector, and the two price-to-sales ratios are 6.4X and 8X, which are higher than the 3-5X price-to-sales ratio range of pharmaceutical companies.
APIs: short-term attention to price transmission varieties, long-term attention to the high-quality development of the industrial chain
API industry attributes: The rare industrial chain in China's pharmaceutical industry chain is in China, and the demand is a global-oriented subdivision of the industry. Profits in 2021 are squeezed by rising raw materials, and 2022 is expected to be transmitted downstream.
Price tracking: The prices of antibiotics and antipyretic and analgesic APIs have shown an upward trend. The API industry chain is long, and the cost transmission will generally lag behind, so it is recommended to pay attention to varieties with a good supply and demand pattern.
Long-term usher in the high-quality development of the industrial chain
Policy promotion: 2021.11 The National Development and Reform Commission issued a implementation plan for promoting the high-quality development of the API industry, innovation-driven, green and low-carbon transformation, and cultivating new advantages in international competition. The industrial chain supply of the epidemic test is stable.
Process innovation line: scientific reagents, consumables and equipment industry chain: consumer goods in the field of scientific research, Changpo niche policy immunization market. APIs: A rare industrial chain in China, and the demand is a global segment of the industry, ushering in the long-term high-quality development of the industrial chain. (Source: Future Think Tank)
Fourth, based on the global dimension, grasp the underlying technology iteration cycle
Grasp the iteration cycle of the underlying technology
Technology iteration cycle: The global pharmaceutical industry has experienced small molecules, monoclonal antibodies, immunology and precision medicine in the history of the global pharmaceutical industry, and is currently entering gene therapy. The iteration of underlying technology has pushed the secondary market to a new high.
ADC: Intelligent biological missile drugs have accumulated and entered the inflection point of harvest
Cutting-edge technology: It is recommended to pay attention to the value of the three major technology platforms of ADC, dual antibody and mRNA. ADC technology platform set small molecules, large molecule advantages of the pan-disease technology platform, antibody, Linker, Payload and connection technology continuously updated to promote the ADC drug treatment window greatly expanded, indications from blood cancer to solid tumors, breast cancer treatment program from the end of the line to new adjuvant treatment, the market space is constantly opened, 2019-2020 new products are intensively approved for listing, the industry into the harvest inflection point.
2019-2021 Dachang more than 40 billion US dollars heavy money sweeping ADC technology platform: 2019-2020 ADC field License and mergers and acquisitions transactions of more than 40 billion US dollars, review the technology development path and the layout of large factories, the technology platform has entered the stage of leafy development from breaking ground, which is also another flat-shaped, covering multiple diseases after the PD-1 platform.
The progress of major domestic enterprises: Rongchang Bio's Vidi cetizumab is the first approved ADC drug in China, and has been approved for gastric cancer. In other projects, only Rongchang RC48 other indications, Dongyao TAA013, Zhejiang Pharmaceutical ARX788, and Meiyake Biological MRG003 were advanced to Phase II. and III., except for MRG003 as EGFR targets, all of which were HER2 targets.
Dual antibodies: next-generation antibody drugs with a good competitive landscape
Bispecific Antibody (bsAb) is a novel second-generation antibody with two specific antigen binding sites that can interact with target cells and functional cells simultaneously to enhance the killing of target cells.
At present, only three drugs in the world have been approved for marketing, and the star product Roche's emesilizumab is the first type A hemophilia preventive drug approved by the FDA to treat the body with or without factor VIII inhibitors, and the sales volume of the three years on the market has exceeded 2 billion US dollars.
A total of 13 dual antibody products worldwide have entered phase III clinical trials. The domestic dual antibody field is at the forefront, respectively, Kangfang Biological and Corning Jereh, kangfang biological Kaide Ning has applied for listing, is expected to become the first domestic and the fourth in the world to launch a dual antibody drug listing company.
mRNA: A new generation of low-level technological revolution therapies
mRNA (messenger ribonucleic acid) is a class of single-stranded RNA that is transcribed from a strand of DNA as a template and carries genetic information to guide protein synthesis. After using genes in cells as templates and transcribed to generate mRNA according to the principle of base complementary pairing, mRNA contains base sequences corresponding to certain functional fragments in DNA molecules, which can be used as a direct template for protein biosynthesis. Theoretically, messenger RNA (mRNA) has the ability to express any protein, so mRNA therapy has broad application prospects in vaccine research and development, protein replacement therapy, expression antibody therapy, tumor immunotherapy and cell therapy such as transforming CAT-T cells.
Domestic mRNA industry chain related enterprises only Watson biological mRNA vaccine progress is the fastest, has entered the third phase of clinical stage, Kingsrui to get plasmid related orders, the new stock Nuoweizan as the core upstream raw material supplier.
Cutting-edge technology: ADC: Intelligent biological missile drugs accumulate and enter the inflection point of harvest. Dual antibodies: next-generation antibody drugs with a good competitive landscape. mRNA: A new generation of low-level technological revolution therapies.
5. Investment analysis
The pharmaceutical investment strategy in the post-epidemic era after 2022 should return to the trend of industrial operation, and at present, China's pharmaceutical industry is moving from a pharmaceutical power to a pharmaceutical power, and the terminal business model has also shifted from demand-driven to demand-creating stage.
Process innovation: We are optimistic about the investment opportunities brought about by the iteration of cutting-edge biotechnology technology in the upstream demand of the industrial chain. It is recommended to take biotechnology as the core context and excavate the hidden champions of the TO B-end subdivision industry such as upstream equipment, gene consumables, biological enzymes, high-end analytical instruments and reagents in the industrial chain.
Technological innovation: The attributes of industrial science and technology have been improved, and the main line of innovative investment has also been in line with international standards, showing the characteristics of high risk and high return. We believe that the innovation track should always be at the forefront of technology and keep up with the cycle of technology iteration. At present, we are optimistic about the flat value of ADC, dual antibody and mRNA technologies, and recommend paying attention to the long-term investment opportunities of related companies. In addition, we are also optimistic about the investment opportunities for the transformation and innovation of traditional pharmaceutical companies, such companies are subject to the suppression of the collection policy of the stock business, the valuation is at a historical low, it is recommended to pay attention to the layout of the frontier track, the product line has potential expected poor stock opportunities.
Excerpts from the report:
(This article is for informational purposes only and does not represent any of our investment advice.) For usage information, see the original report. ）
Featured report source: [Future Think Tank]. Future Think Tank - Official website