On February 25, BeiGene announced its 2021 U.S. Stock Market Annual Report, officially kicking off the curtain on the annual pharmaceutical company earnings competition.
On the whole, in 2021, more than 60% of pharmaceutical companies are expected to perform well, of which due to the epidemic factors, the vaccine and in vitro diagnostics industry has eaten a "dividend", and Zhifei Bio is currently sitting in the top position in the pharmaceutical and health industry with a profit of more than 10 billion.
In addition, although the pharmaceutical R&D outsourcing industry has made a sharp adjustment in the capital market, it still maintains a strong ability to make money from the perspective of performance.
The more concerned innovative pharmaceutical companies are still dragged down by high R&D and management costs.
Although BeiGene saw a substantial increase in revenue nearly tripled, it also had a net loss of more than $1.4 billion. It can be seen from this that losses may become a label that such companies cannot get rid of for a long time.
Source: Figureworm Creative
Nearly 70% of pharmaceutical companies are happy
According to the published pharmaceutical company performance report, the biomedical industry is still one of the strongest tracks.
As of March 1, 2022, 243 A-share biomedical companies have issued 2021 performance forecasts, of which more than 60% are pre-happy.
Among them, Zhifei Bio has become the "most profitable" company in all the pharmaceutical and biological industries. According to the data of Tonghua Shunwencai, the median net profit forecast of Zhifei Bio in 2021 is 10.234 billion yuan, which is also the only company with a net profit of more than 10 billion yuan.
Source: Flush Ask for Money
After the financial turmoil, Kangmei Pharmaceutical has returned to the public vision with the image of a sharp turnaround, and the median net profit of the company in 2021 is expected to be 7.031 billion yuan.
In this regard, Kangmei Pharmaceutical pointed out that the company's restructuring plan has been implemented, and the net proceeds of the relevant restructuring have been realized by about 17.5 billion yuan, resulting in the company's performance turning from loss to profit year-on-year.
In addition to Zhifei Biological, Jimin Medical has become the fastest growing company at present, according to its disclosed express report, the median net profit of the company in 2021 is 148 million yuan, an increase of 2202.70% year-on-year. In addition, the three companies such as Heatscape Biology, Lisheng Pharmaceutical and Harbin Sanlian have also increased by more than 10 times.
The most beautiful boy under the normalization of the epidemic
Among the report cards of all pharmaceutical companies, vaccines and in vitro diagnostic pharmaceutical companies related to the epidemic have become the "most beautiful boys".
According to data, as of February 24, the cumulative number of covid-19 vaccines in the world exceeded 10.67 billion doses, and the cumulative number of domestic covid-19 vaccines exceeded 3.1 billion doses.
In addition to the net profit of Zhifei Biology breaking through 100, the median net profit of two vaccine companies such as CanSino and Kangtai Biology also exceeded 1 billion yuan.
Source: Flush Money - Vaccines
CITIC Securities pointed out that according to the current severe disease rate deduction, Omicron will have a high probability of pan-flu, referring to the influenza vaccine market, the demand for vaccines has a certain degree of sustainability, and the valuation of related enterprises is expected to be reshaped.
In the field of in vitro diagnosis, Oriental Biology temporarily ranked first with 4.920 billion yuan.
Dongfang Bio pointed out that in 2021, due to the impact of the global new crown epidemic, the company's new coronavirus antigen rapid detection reagent (including home self-test) continued to be invested in the epidemic prevention business, and the sales performance of products in the European market continued to increase significantly, prompting a substantial increase in operating performance in 2021.
In addition, five companies, including Heatscape Biology, Wantai Biology, BGI Gene, Mingde Biology and Shuoshi Biology, also had a median net profit of more than 1 billion yuan.
Source: Flush AskEd Wealth - In Vitro Diagnostics
Pharmaceutical R&D outsourcing is growing rapidly
Whether it is the capital market or the entire pharmaceutical industry, the field of pharmaceutical R&D outsourcing is the hottest track.
Although in the capital market, the relevant enterprises have been greatly adjusted, but this does not affect the rapid growth of their performance.
As a leader, WuXi AppTec still shows strong growth momentum.
According to its performance forecast, the median net profit of the company in 2021 was 5.003 billion yuan, an increase of 69% year-on-year.
Capital Securities pointed out that the company is a leading enterprise with global competitiveness, the track is still in a high degree of prosperity, with the gradual release of new production capacity and the promotion of customer pipelines, it is expected to bring sustained growth to the company.
From the perspective of companies that have announced performance forecasts, the overall pharmaceutical research and development outsourcing field is in a stage of rapid growth, in addition to the loss of Wise Pharmaceutical, the performance growth rate of Yaoshi Technology, Medici, Boji Pharmaceutical and other companies has exceeded 100%, and the growth rate of many companies such as Tigermed, Kyushu Pharmaceutical, and Zhaoyan New Drug has exceeded 50%.
According to the statistics of research institutions, the R&D expenditure of global pharmaceutical companies reached 204.8 billion US dollars in 2020, with a year-on-year growth rate of 12%. The global CDMO (New R&D and Production Outsourcing Model) industry size is about 55.4 billion US dollars, and the global CDMO industry is expected to exceed 100 billion US dollars in 2025.
Cinda Securities pointed out that the improvement of the supply chain status of CDMO enterprises in China and the rise of innovative drugs and emerging technologies have brought long-term opportunities. The development of the CDMO industry and the future are deeply related to the pharmaceutical industry, and the development of domestic medicine is expected to provide new momentum for the industrial upgrading and long-term development of the CDMO industry.
A label that BeiGene can't shake off
In BeiGene's 343-page report, the hopes and entanglements of innovative pharmaceutical companies are revealed.
Judging from the financial report, although BeiGene is still in a huge loss, it is clear that its business capabilities are constantly improving.
This improvement in ability is reflected in the substantial increase in revenue.
According to the financial report, in 2021, BeiGene's revenue on the product side was $634 million, an increase of 105.3% year-on-year; while in terms of cooperation revenue, it increased by $542 million, and the two together reached $1.176 billion, an increase of nearly three times year-on-year.
Source: Screenshot of BeiGene's financial report
As for the reason for the sharp increase in revenue, BeiGene's explanation is that "the product side relies on the growth of sales of the two main products of Baiyueze and Baizean." Of the cooperation revenue, the largest source is the technology transfer income in cooperation with Novartis, which amounts to $485 million."
The two drugs of Bai Zean and Bai Yue Ze are currently the main source of product revenue in BeiGene, and the financial report shows that the above two drugs contributed 255 million US dollars and 218 million US dollars to the company in 2021, respectively. Among them, BeiGene pointed out that the substantial growth of Bai Zean (PD-1 monoclonal antibody monoclonal antibody) is due to the new patient demand brought about by the inclusion of medical insurance.
Since its inception, BeiGene has never seemed to get rid of the label of "loss". As of 2021, the company has accumulated a loss of $5 billion.
The good news is that the company's net loss in 2021 has been reduced by $187 million compared to 2020.
However, the judgment of BeiGene may not be based on the perspective of loss, because the company may not be profitable for a long time to come.
In its earnings report, BeiGene also admitted that "since its inception, the company has generated significant net losses and is expected to continue to generate net losses in the foreseeable future, which may not be profitable."
Even so, research institutions remain optimistic about BeiGene, CITIC Securities pointed out that the company's performance is in line with expectations, commercial cooperation has strongly supported the product pipeline, the company's research and development expenses tend to be stable, and cash reserves are abundant. A number of milestone events are poised to take place, and 2022 is expected to usher in a number of stock price catalysts.
The heart of innovative pharmaceutical companies
Although BeiGene has reflected some positive signals in its financial report, it still cannot ignore the severe competitive situation faced by innovative pharmaceutical companies.
For the company's Baiyueze, there is direct competition from international giants such as Johnson & Johnson and AstraZeneca in overseas markets, among which the "Yike" sold by AbbVie and Johnson & Johnson has been approved in more than 90 countries and regions, and the scope of indications is more advantageous. "Yike" was also allowed to enter the Chinese market in 2017, and the current "Enokai" with Nuocheng Jianhua has formed competitive pressure on BeiGene.
"Bai Zean", as another fist product of BeiGene, will face a more severe form of competition. Internationally, O drugs and K drugs have long formed the first camp, in addition to T drugs, I drugs, B drugs, etc. also have their own market share. In addition, in the Chinese market, 7 PD-1 and 4 PD-L1 models have been approved, and about 40 drugs are still in clinical development.
Surrounded by strong enemies, innovative pharmaceutical companies such as BeiGene must continue to invest in research and development in order to expand the company's more pipelines to increase revenue.
BeiGene's financial report shows that the company's R&D investment is still expanding, with a total investment of $1.459 billion in 2021, an increase of 12.7% year-on-year. Among them, internal R&D expenses increased by 38.3%, mainly due to the company's hiring of more R&D personnel and an increase of $109 million in compensation and benefits expenses.
Dizhe Pharmaceutical, which also comes from the field of innovative drugs, also released its 2021 financial report a few days ago, and the company's losses further expanded to 670 million yuan. One of the most important reasons is that during the reporting period, Dizhe Pharmaceutical invested 588 million yuan in research and development, an increase of 33.70% year-on-year.
The high cost of R&D investment has become a "knot" that innovative pharmaceutical companies cannot avoid.
In addition, BeiGene's operations are in China and overseas, which requires more administrative expenses. The financial report shows that the company's employees have risen from 5,100 at the beginning of 2021 to 8,000 at the end of the year. To that end, BeiGene added $176 million in spending on employee compensation and benefits.
To build global presence and capabilities, BeiGene increased its external commerce-related expenses by $119 million, including market research, sales and marketing, consulting and conference-related expenses.
Sources | the health community
Written by | Old Zhao next door