Lizhu Group: Shenwan Research Institute, Allianz Investment and other 2 institutions investigated our company on January 18

On January 19, 2022, Lizhu Group (000513) announced that Zhou Wenyuan of Shenwan Research Institute and Wang Qizhao of Allianz Investment investigated our company on January 18, 2022.

The main contents of this survey are:

Q: Briefly describe the company's recent business changes?

A: In terms of revenue structure, through the company's continuous marketing reform and innovation in recent years, innovative drugs and high-end complex preparations have become the main growth drivers. The company's first-line varieties of epprazole series products and leuprolide microspheres for injection continued rapid growth, and from the data of the first three quarters of 2021, the combined sales revenue of the two exceeded 35% of the group's total revenue. With the company's biopharmaceutical platform and complex preparation platform products under development gradually entering the middle and late stages of clinical practice, the company's innovative research and development has gradually entered the harvest period. The company's recombinant human chorionicin for injection has been approved for marketing, and the injection of treprelin acetate microspheres (one-month sustained release) and recombinant humanized anti-human IL-6R monoclonal antibody injection have been reported. In addition, the recombinant novel coronavirus fusion protein vaccine jointly developed by the company and the Institute of Biophysics of the Chinese Academy of Sciences has also completed phase II clinical trials, and the test results are positive and good, and the overseas phase III clinical work is also underway.

Q: Please briefly introduce the company's research and development progress of the new crown vaccine, and how does the company evaluate the future market of the product?

A: Our NEW CROWN vaccine V-01 is a recombinant protein vaccine, and the vaccination method is two injections (0 and 21 days). Recombinant vaccines have the advantages of lower doses, easier amplification, no need for ultra-low temperature cold chains, and low transportation costs. The V-01 molecule consists of four parts: interferon, Pan epitope, RBD dimer, and Fc fusion protein. The adjuvant is an aluminum adjuvant, because the antigen structure is fused with human interferon as a biological adjuvant, which significantly enhances the level of virus neutralizing antibodies and produces an effective cellular response, solving the dependence of protein vaccines on strong adjuvants with large toxic side effects and patent monopolies. Previously, the phase II clinical trial data of V-01 has been published in the Chinese Medical Journal, and the trial results show that the vaccine has good safety and immunogenicity. At present, the phase III clinical trial of V-01 basic immunization protocol has been conducted in the Philippines, Indonesia and Russia. In addition, Phase III clinical trials of inactivated sequential immunity as a booster needle were also conducted in Pakistan and Malaysia. At present, the enrollment of subjects in some countries of the Phase III clinical trial has been completed. In addition, based on the advanced technology platform of mature recombinant protein vaccine research and development, we can complete the rapid development of mutant vaccines, and we have now carried out the development of mutant vaccines for Omicron. From a global perspective, the distribution of vaccines is still uneven, and according to statistics, there is still a lot of room for global vaccination rates. At present, Livzon's new crown vaccine V-01 has been undergoing phase III clinical trials in many overseas countries, and it will also strive to have the opportunity to be sold overseas in the future. Although the vaccination rate of COVID-19 in China is already very high, and some provinces have successively launched the vaccination of enhanced needles, we also expect V-01 to be listed in China as soon as possible as a reinforcement needle to contribute to the fight against the epidemic.

Q: What is the impact of the negotiations on eparazole sodium for injection on the company? How are companies responding to the impact of price cuts?

A: Eparazole sodium for injection was renewed through this negotiation and continued to be included in the Medical Insurance Catalogue, and the medical insurance payment price was 71 yuan (10mg / stick). The new version of the Medical Insurance Catalogue will be officially implemented on 1 January 2022. After entering the medical insurance in a negotiated manner, the injection of eparazole sodium in the hospital access more than other acid-suppressing drugs more advantageous, the official documents of the Medical Insurance Bureau are clear, the negotiated drug into the hospital will not be negotiated for the second time, not affected by the proportion of drugs, the average cost of the times, doctors need to give priority to use; at the same time, the national talks canceled the payment limit for injection of eprazole sodium, expanded the beneficiary population, the directory suffix remarks from "limited to the disease diagnosis indicated in the instructions and patients with fasting doctor's instructions or difficulty swallowing" adjusted to "peptic ulcer bleeding" according to the instructions 。 As the first domestic self-developed and innovative new generation of 1.1 acid suppressants, after this renewal, after the renewal, after expert review, a series of new clinical evidence fully proved that its "make up for the defects of similar drugs, no need to continuously pump" fills the clinical gap, its "significant efficacy, safety, patient compliance, economy" and other clinical comprehensive evaluation is better than the same kind of original research PPI, the cost of the course of treatment with epprazole sodium for injection is 3 to 4 times lower than all non-collection PPI, with its excellent product competitiveness, It will continue to give full play to its clinical value and benefit the majority of patients. At present, the level of hospital coverage of the product is low, after the price reduction will benefit more patients, the company will continue to increase hospital coverage and product sales, to achieve "price for volume", reduce the impact of medical insurance payment price adjustment on the company's steady growth. In addition, in the existing business, the first is the continuous growth of featured API products, which can continue to provide better profit contributions. Second, the chemical preparation plate in the digestive tract, assisted reproduction, spiritual field and other comprehensive layout of rich and market potential of the products, the above will provide strong support for the company's performance. Third, in the company's Traditional Chinese medicine sector, the pharmacy promotion and online interactive promotion effect of antiviral particles has begun to appear, and the grass-roots market of Ginseng Fuzheng Injection has continued to grow, and under the background of the country's strong support for the Traditional Chinese medicine industry, perhaps the company's Traditional Chinese medicine sector will usher in a new development opportunity in the future. The company's innovative research and development will also enter the harvest period, and a number of projects have been reported, which will provide new increments for the company's performance in the next one or two years. In addition, the company's COVID-19 vaccine is conducting Phase III clinical trials in many countries around the world, and the company is fully promoting follow-up work, which is expected to add new potential and momentum to the company's operations.

Q: Briefly introduce the product layout in the spiritual field of the company? How does the company anticipate the market space for aripiprazole microspheres?

A: The spiritual field is one of the company's current key specialty areas, and the existing fluvoxamine maleate tablets and piperopilone hydrochloride tablets are on sale. These two products are exclusive varieties in China, among which the first imitation product for the treatment of schizophrenia, piperopilone hydrochloride tablets, has been included in the national medical insurance, and the amount is obvious after entering the national medical insurance. Up to now, these two varieties have not been included in the national collection catalogue, and have not been affected by the price reduction of collection and mining. In the pipeline of the spiritual field under research, rulasidone hydrochloride tablets, bunanserin tablets, and aripiprazole microspheres for injection are expected to be listed in the next 1-3 years, and products such as asenapine patches have been laid out, realizing a relatively complete pipeline layout of short, medium and long-term psychiatric drugs. Global sales of aripiprazole peaked at more than $8 billion for the treatment of schizophrenia. The long-acting drug market for psychiatric disorders has a large capacity, including: risperidone microspheres, paliperidone palmitate (1M and 3M), aripiprazole (microcrystalline), etc., totaling about 6 billion US dollars market. Because long-acting varieties can reduce the frequency of administration and improve the adherence of patients with psychiatric disorders. The domestic psychiatric market is vast, and the anti-schizophrenic drugs in 2019 reached nearly 7 billion yuan. With the expansion of the domestic patient population and the improvement of disease awareness, we expect that there is still a large space in the domestic spiritual field market. The company has also set up a sales team of nearly 100 people in the spiritual field, with the help of the existing market layout of the spiritual field varieties, it will also pave the way for the listing of a series of new products in the future.

Q: Progress of the research and development project of the microsphere platform of Simple Company.

A: The microsphere platform currently has 6 projects under research. The progress of key product research and development is as follows: triprilin acetate microspheres for injection have completed phase III clinical trials and the listing declaration has been accepted; aripiprazole microspheres for injection are undergoing phase I clinical trials, have completed single administration studies, and multiple clinical trials have been initiated; leuprine acetate microspheres for injection (3 months sustained release) have completed Phase I clinical trials and have completed phase III clinical genetics office filing; and octreotide microspheres for injection have carried out BE pre-trials Triprelin microspheres for injection (3 months of sustained release) have been approved for clinical trials.

Q: Briefly introduce the company's API business layout?

A: The company's API business has been transformed from a bulk API to a high-end characteristic API, and the profit of the company's API has accounted for more than 50%, mainly including high-end antibiotics and pet deworming raw materials and other products. In recent years, the company's API overseas certification products have gradually enriched, the company's API export revenue has accounted for more than 50%, and the overseas market has been changed from non-standard market to Europe and the United States and other standardized markets, market development layout is still strengthening. In addition, the company also through technical optimization, continue to reduce the production cost of products, so that the company's products in the market has a quality advantage at the same time still have a better price advantage. At present, the API sector has become one of the main driving forces for the rapid growth of the company's profit side, coupled with the fact that there are already a number of high-end antibiotics and high-end pet drugs in the pipeline, it is expected that APIs will still be able to provide a better profit contribution in the next few years.

Q: Briefly introduce the company's diagnostic reagent related business?

A: In recent years, the reagent company has actively tried to adjust and transform, under the premise of ensuring the sustained and stable growth of existing agent varieties, it has carried out deep ploughing around the layout of strategic disease fields and departments, and actively developed its own varieties. In terms of self-exemption, tuberculosis, molecular diagnosis and other new product introduction, Lizhu reagents have increased their promotion efforts since the second half of 2020 and gradually gained customer recognition.

The main business of Livzon Group: a Chinese company mainly engaged in the research and development, production and sales of pharmaceutical products. The company's main products include digestive tract, cardiovascular and cerebrovascular, antimicrobial, gonadotropins and other Western medicine preparation products, as well as traditional Chinese medicine preparations, APIs and intermediates, diagnostic reagents and equipment. The company's products are sold to both domestic and overseas markets in China.

According to the third quarter report of Lizhu Group in 2021, the company's main revenue was 9.369 billion yuan, up 18.22% year-on-year; the net profit attributable to the mother was 1.453 billion yuan, up 2.19% year-on-year; the deduction of non-net profit was 1.344 billion yuan, up 14.02% year-on-year; among them, in the third quarter of 2021, the company's single-quarter main revenue was 3.134 billion yuan, up 10.72% year-on-year; the single-quarter net profit attributable to the mother was 390 million yuan, down 6.37% year-on-year. In the single quarter, the non-net profit was 424 million yuan, up 23.18% year-on-year; the debt ratio was 35.51%, the investment income was 68.6539 million yuan, the financial expense was -24.2919 million yuan, and the gross profit margin was 65.81%.

In the past 90 days, a total of 8 institutions have given ratings, 6 buy ratings and 2 overweight ratings; the target average price of institutions in the past 90 days has been 48.25; the net inflow of financing in the past 3 months has increased by 174 million, and the net outflow of margin has been 9.2708 million, and the balance of margin has decreased. The Securities Star Valuation Analysis Tool shows that Livzon Group (000513) has a good company rating of 3 stars, a good price rating of 3 stars, and a comprehensive valuation rating of 3 stars. (Rating Range: 1 ~ 5 stars, maximum 5 stars)