Text/ Zhao Tianyu Xin Ying
Editor / Wang Xiao
Photo/pixabay
Pharmaceutical companies are wandering in vanity fair, and the two words "collection" are difficult to get around, and they are also a symptom of the shrinking market value.
On January 24, 2022, after falling for three consecutive days, Changchun High-tech (000661. SZ) disclosed that on January 19, the Guangdong Provincial Drug Trading Center issued the "Guangdong Alliance Diclofenac and Other Drugs Centralized Procurement Document", and the subsidiary Changchun Kinsey Pharmaceutical Co., Ltd. (hereinafter referred to as "Kinsey Pharmaceutical") injectable recombinant human growth hormone and recombinant human growth hormone injection were included in the scope of centralized procurement in this region.
Affected by this, from january 19 with the volume of procurement documents issued, as of the close of January 28, less than ten days, Changchun high-tech market value fell by 30%, evaporated more than 30 billion yuan, lost the 100 billion mark.
The sword of Damocles hanging over the head of every pharmaceutical company.
"Kinsey Pharmaceutical will most likely abandon the bid in this collection." Chen Hong, an investor in the pharmaceutical industry, told Finance and Economics Big Health, "According to a person close to the company, Kinsey Pharmaceutical had previously abandoned the bid in fujian's provincial procurement, and the company still achieved sales growth by relying on the market outside public hospitals."
For whether it is expected to enter the national collection category next, on January 27, the office of the board of directors of Changchun High-tech responded to the reporter of "Finance and Economics Big Health" that in terms of collection policy, the company pays attention to policy changes and will formulate specific response plans according to relevant requirements.
"The problem of collection and collection involves many issues such as possibility, price reduction range, collection and collection volume, and it is really difficult to quantify." At the semi-annual report performance briefing in August last year, Zhang Deshen, secretary of the board of directors of Changchun High-tech, said that the company does not expect growth hormone products to enter the national collection in the short term.
Set to abandon or not to give up?
In the segment of growth hormone, "into the collection" affects the nerves of investors.
As early as September 30, 2021, the Guangdong Provincial Drug Exchange Center has published the "Guangdong Alliance 153 Drug Groups with Quantity Procurement Documents (Draft for Comment)", and recombinant human growth hormone powder needles (1 group) and water injections (2 groups) are among them.
Powder needles are made of freeze-drying technology and need to be dissolved before use; water needles are liquid, do not need to be repeatedly pumped, and can be injected directly. Water needles are more expensive than powder needles.
If the two drugs are divided into different groups, it means that the price can be bid separately and does not have to be equalized.
However, in the plan announced by Guangdong Province in early January, water needles and powder needles are no longer grouped to bid, which leads to a relatively large price reduction for water needles, exceeding the expectations of the industry, triggering Changchun High-tech to fall for several days.
In the above-mentioned collection scheme, at the level of public medical institutions, the reported amount of HGH water injections involved three suppliers and powder needles involved five, and Kinsey Pharmaceuticals was the only company that owned both types of growth hormone.
Chen Hong analyzed, "If you abandon the bidding, Kinsey Pharmaceutical may lose 30% of the market, but if the price is reduced in the Guangdong Alliance, it is likely to face the synchronization of other provinces with the national minimum price hanging net, or the follow-up of other provinces to follow up the price reduction requirements of the collection, and may lose more." ”
Dongguan Securities Research Report analysis, among the three water needle suppliers, Kinsey Pharmaceutical's water needles, the first year of pre-purchase accounted for 98.24%. For Kinsey Pharmaceutical, the demand is more 15 IU and 30 IU two specifications, the maximum declared price is 173.58 yuan, 295.08 yuan, but the current hanging net price of these two products is about 567 yuan, 1031 yuan.
Assuming that Kinsey Pharmaceutical wins the bid in the alliance procurement in Guangdong Province according to the maximum price limit, the price reduction is about 70%.
The competitive landscape of growth hormone in the future may be disturbed by collection. Dongguan Securities analysis believes that the current pattern of growth hormone is more caused by market-oriented competition, and the role of medical insurance is small; and whether the current pattern will be broken mainly depends on the performance of the three water needle suppliers in this collection. Aggressive companies may open up competitive channels through the in-hospital market and seize the market share of the in-hospital enterprises that have not won the bid.
Chen Hong believes that "in the short term, the stock price (of Changchun Gaoxin) has fallen one after another, and there may be an overreaction." In the medium term, this collection will have little impact on the revenue of Kinsey Pharmaceutical. ”
Changchun Gaoxin is famous for growth hormone in the capital market, more precisely, this business comes from its subsidiary Kinsey Pharmaceutical, which is the earliest company in China to develop and use growth hormone.
The importance of Kinsey Pharmaceutical to listed companies is self-evident: in the first half of 2021 alone, of the 4.963 billion yuan of operating income of listed companies, 3.788 billion yuan was contributed by Kinsey Pharmaceutical, accounting for more than 70%. The contribution to net profit is even higher, nearly 97%.
The soul of Kinsey Pharmaceutical is Jin Lei, who is currently the general manager and chief scientist of Kinsey Pharmaceutical. He once lamented, "I dedicated my best youth to the study of growth hormone theory." ”
Since graduating from the Department of Biology of Peking University in 1985, Jin Lei studied for a master's degree at the Institute of Biophysics of the Chinese Academy of Sciences, went to the United States in 1989, and studied for a doctorate at the University of California, San Francisco, and received a doctorate five years later. He was awarded the Craven Prize in biology and was the first Chinese to receive the prize.
In the 1990s, when Jin Lei returned to China to visit his relatives, he noticed that many short children in China were discriminated against in school and life due to lack of treatment drugs, and they would have inferiority because of their short stature. At that time, the imported drugs of growth hormone were expensive, and many patient families could not afford it, and there were few doctors, and there were fewer than 20 doctors who could treat short diseases.
Similar to the state of mind of many founders of pharmaceutical companies in the 1990s, Jin Lei saw huge market opportunities from this gap in medication and treatment. He returned from the United States to found Kinsey Pharmaceuticals for the development of growth hormone.
Changchun Gaoxin has been bound to Jin Lei since then, and has always been the majority shareholder of Kinsey Pharmaceutical. According to Tianyancha data, when the company was founded in 1997, Changchun Gaoxin held 65% of the shares, while another company of Jin Lei held 35%.
After a period of days of keeping an eye on research and development in the workshop every day, Jin Lei's progress is very fast. In 1998, the first injectable recombinant human growth hormone "Saizen" powder injection was introduced, and since then, Kinsey Pharmaceutical has gradually expanded the variety of growth hormone, and this drug has opened the road to localization.
Kinsey Pharmaceutical also sought a listing on the New Third Board around 2016 in order to refinance, but eventually stranded.
Since then, Changchun Gaoxin's shareholding in Kinsey Pharmaceutical has further increased, and by 2019, it has further acquired equity in the form of a private placement, and finally held 99.5% of the shares, and Jin Lei held 0.5%; Jin Lei appeared in the top ten shareholders of Changchun Gaoxin for the first time, as the second largest shareholder, holding about 11.5%.
From the second year, Jin Lei began to gradually reduce his holdings. Jin Lei explained that this is due to the restructuring of the previous year, he needs to pay nearly 1 billion yuan of personal income tax, and there is a need to pay taxes.
"Jin Lei's reduction, to be honest, has caused a very bad company image for the majority of investors, and the low-level increase in holdings and high-level precision reductions are scientists or stock speculations?" In August 2021, at the semi-annual report performance briefing of Changchun Gaoxin, investors could not hide their dissatisfaction. At that time, the market value of Changchun Gaoxin had fallen from the highest point for more than three months.
At that time, Jin Lei was planning to increase his holdings. Zhang Deshen, the secretary of the board of directors, responded, "I will tell him your accusations against Jin Lei. ”
Three months later, Jin Lei increased his holdings, from 8.52% to 8.56%.
It has roots with private hospitals
Jin Lei has been "drumming and whistling" for the growth and development of short children.
At a project on child growth and development in Beijing in 2021, Jin Lei said that the incidence of short children in China is 3%, and there are about 7.6 million short children in China, but less than 5% of them receive standardized diagnosis and treatment.
Growth and development is one of the public health problems that endanger children's health, most patients have low self-esteem, depression and other psychological disorders, not only to adult education, marriage, employment to bring a variety of impacts, but also to the country to bring economic burdens, become a social problem that can not be ignored.
However, Kinsey Pharmaceutical, along with its major shareholder Changchun Gaoxin, is often questioned for "abuse" of growth hormone. Whenever doubts arise, Changchun High-tech's stock price falls in response, and the company clarifies several times.
The pain point is that parents are obviously anxious about their children's height. Chen Hong introduced that Kinsey Pharmaceutical has a very unique sales model, mainly relying on the admission of new patients in the third-class public hospitals, and the follow-up follow-up diagnosis and prescription of drugs are mainly based on the "out-of-hospital market", that is, private hospitals, clinics, etc., and have a very strong control ability on the terminals of the "out-of-hospital market". Kinsey Pharmaceuticals," according to it, "nearly 70 percent of its sales come from the 'off-campus market.'" ”
"In the past, everyone commented that Kinsey was only a manufacturer and sales enterprise of growth hormone." In August 2021, in communication with 1288 investors from more than 290 institutions, Jin Lei and others did not deny the existing channel advantages in the pediatric field, believing that they could rely on these to expand new products. They also mentioned that the company wants to take advantage of the advantages of private channels.
Private hospitals have played an important role in the past of Kinsey Pharmaceutical, and Kinsey Pharmaceutical has also tried to establish a self-operated outpatient system, and in 2015, it participated in the investment and establishment of Shanghai Jinbeigao Hospital Investment Management Co., Ltd., through which it indirectly invested in Chongqing Jintong Jiajiangao Children's Hospital Co., Ltd., Wuhan Jiangao Comprehensive Outpatient Department Co., Ltd., and Hangzhou Jiangao Pediatric Outpatient Department Co., Ltd. All three are private hospitals or health consulting companies.
These companies add a lot to kinsey's performance. In the first half of 2019, Kinsey Pharmaceutical's sales revenue in Chongqing Golden Boy JiaJian Gao Children's Hospital Co., Ltd. exceeded 200 million yuan, accounting for nearly 10% of the company. However, during this period, Kinsey Pharmaceutical gradually withdrew from Shanghai Jinbeigao Hospital Investment Management Co., Ltd. in the form of capital reduction, and the company said that it was to focus on drug research and development and production, and outpatient operations belonged to two fields, which were quite different.
Because they are prescription drugs, HGH products have clear indications. For example, polyethylene glycol recombinant human growth hormone injection is used for slow growth in children caused by endogenous growth hormone deficiency. In addition, there are recombinant human growth hormone injections, in addition to the above indications, can also be used for short stature caused by Noonan syndrome, short stature or growth disorders caused by SHOX gene defects, and growth hormone deficiency caused by identified hypothalamic-pituitary diseases.
For the use of growth hormone products, doctors need to carry out a series of tests including growth hormone provocation tests, and then prescribe according to the specific situation and clinical requirements of the disease.
A practitioner of an obstetrics and gynecology hospital told "Finance and Economics Great Health" that there is a child health department in his hospital, and there is a sub-specialty called growth and development in the department. Another doctor added that endocrinology clinics in some hospitals will also be involved, such as the short clinic of the Department of Endocrinology at Peking Union Medical College Hospital.
Whether a child can play growth hormone has a set of strict requirements and testing indicators, such as age, bone age, hormone level, etc. The normative nature of HGH sales is often mentioned.
An industry insider told "Finance and Economics Big Health" that once the child starts to inject, it needs a cycle, more than one injection, so there is a system for patient management, including past indicators and improvement indicators, which can be followed, and if there is an adverse reaction, it will be recorded.
The "Guidelines for the Diagnosis and Treatment of Short-stature Children" points out that the course of treatment should not be shorter than 1-2 years, and if it is too short, the benefits of children have little effect on the final height. According to the official website of Kinsey Pharmaceuticals, the treatment of short stature using growth hormone depends on the growth of individual height.
"Growth hormone is not unique to China, the treatment of height deficiency is also the treatment scheme worldwide." The above-mentioned industry insiders said that the several controversies caused by growth hormone may be caused by corporate marketing. The pandemic has caused a large number of children to be lost during the treatment cycle because they cannot be injected in hospitals. Once beyond age or beyond the cycle, growth hormone will not play a role.
Moreover, the above-mentioned industry insiders frankly said, "The guidance of the doctor who wrote the book is very important, which also involves the problem of the medical environment."
Is there a gold investment area "beyond the collection"?
In addition to growth hormone, the biological agents collected by the Guangdong Alliance also include blood products, which also arouse attention.
On the day of the release of the collection documents, the stock price of Hualan Biology in the blood products sector fell by 5.63%, and Boya Biology, Shanghai Laixi, and Tiantan Biology all fell to varying degrees.
"I really didn't think that blood products would also be included, because this is a human product, and due to the limited source of raw materials in the upstream, the final output cannot be improved just by building factories and increasing production lines." Sun Jialin, CEO of Gao Tejia Investment, analyzed how the ceiling of enterprise expansion is increasing the upstream pulp collection station.
Non-medical insurance catalogue of dental implants, growth hormone with the attribute of "consumer medicine", non-collection varieties that have not passed the drug consistency evaluation, etc., have been included in the collection of inter-provincial alliances, and the "aura of medicinal grass" has faded one by one.
The step-by-step expansion of the collection does make Chen Hong feel uncertain, "In the long run, the public welfare attributes of the pharmaceutical field in the domestic market will be strengthened more and more." ”
A person in the medical insurance system analyzed the "Great Health of Finance" that the collection is not necessarily limited to the scope of the medical insurance directory, and the collection outside the directory can also be collected. The condition for collection and collection is whether the quantity is large enough to organize an effective market; whether there are enough competitive subjects to form effective market competition; whether there is a reasonable quality evaluation system, either all products are on a quality level line, or different quality can be comprehensively evaluated through the quality evaluation system.
Is there still a gold investment area "outside the collection"?
In Sun Jialin's view, the market in the collection is not a completely taboo place. Before investing in Huiyu Pharmaceutical in 2019, the Gao Tejia team was also very hesitant, when the collection began not long ago, innovative drug investment was also hot, generic drugs were not popular, "the policy prospects are not clear, and the time point of investment, Huiyu Pharmaceutical is a combination of imitation and innovation, not a pure innovative drug enterprise, is there an exit channel in the future?" ”
After much deliberation, Gao Tejia still decided to take the bus before the IPO of Huiyu Pharmaceutical, "Fortunately, the varieties of generic drugs listed by the company in 2021 have all won the bid, becoming a star enterprise in the collection, and the revenue of generic drugs to expand sales to support the research and development of innovative drugs, the business logic will go through." ”
"There are also some varieties that have just been listed by enterprises that have been included in the collection, and at this time, as long as they win the bid, they can quickly obtain sales, and also save the cost of building a sales team, which will reduce the impact of collection and procurement." Sun Jialin said.
However, such opportunities for "collection and procurement" are too few, and the national drug collection covers a total of 218 drugs in three years, with an average price reduction of 54%.
After seeing the three drops and stops of Changchun High-tech, the researchers of Huaan Securities analyzed that in the context of the "no new main line" of the entire pharmaceutical market, the track with performance, low valuation and policy encouragement may become a new main line, such as optimistic about the investment value of Chinese medicine in the medium and long term.
"The recent stock market shock is related to the overheating of the pharmaceutical sector before, but now the secondary market is really lacking confidence, and the wind and grass related to the collection and harvesting have triggered secondary selling and the decline of the stock market." But in the primary market that Sun Jialin has to face, the valuation of good projects has not been reduced at all. This is more difficult for primary market equity investors who rely on the difference between the primary and secondary markets to make a profit, and it is more difficult to find space.
With a global market layout, it seems to have become a new investment logic in the eyes of investors. Even if medical consumables, instruments, etc. are still the main areas of collection in 2022, Chen Hong is still optimistic about the development of the consumables field overseas, on the one hand, IVD detection kits, and the overseas market development prospects of the new crown kits are very good.
For example, Jiuan Medical (002432. SZ), claiming to have received a purchase order for the new crown antigen home self-test OTC kit sent by the New York State Department of Health, with a total order amount of more than 400 million yuan, as well as orders from New York State, Massachusetts, etc., attracting the attention of the Shenzhen Stock Exchange, while the company itself has repeatedly hinted at the risk.
"On the other hand, there are products such as balloons and cardiac stents." Chen Hong analyzed that some domestic enterprises already have international channels such as Europe, America, and Southeast Asia, or have begun to lay out, which are worthy of attention.
But such a project is "too difficult to grab", and the domestic leading enterprise of high-value consumables and equipment is also a high-quality project in Sun Jialin's eyes, "The concentration in this field is very high, and good projects have long been occupied." ”
Sun Jialin aimed at another "treasure" - geriatric rehabilitation equipment, "for the Chinese market entering the aging society, there are still more equipment and equipment with investment value; in addition, vaccines are still very high-quality investment targets." ”