The day of the first listing met the market of more than 4,000 shares falling together, and the tragedy was of course.
On April 25, 2022, Yaokang Bio (688046. SH) officially landed on the Science and Technology Innovation Board, and broke at the opening. Its issue price was 22.53 yuan / share, and the opening price was 20.00 yuan / share, down 11.23%. As of the close, Yaokang Bio quoted 18.50 yuan / share, down 17.89%, with a total market value of 7.585 billion yuan.
Yaokang Biology is an enterprise specializing in the research and development, production and sales of experimental animal mouse models. The company's most expensive "spotted mouse", the average unit price of up to more than 10,000 yuan, gross profit margin of more than 90% directly after Maotai. Before the IPO, Yaokang Bio had obtained two rounds of financing, and both were star capital.
Recently, an analyst at a medical investment fund in Beijing told Times Finance, "In the past, the requirements for animal models were relatively simple, and large pharmaceutical companies could meet market demand by building animal houses by themselves." In recent years, a large number of innovative drugs have begun to develop, and the demand for animal models has become more and more complex and the quantity has become larger, and companies in this field will naturally receive the attention of capital. ”
Screenshot source: the company's official website
Capital favor, 2 years valuation up 7 times
A company that raises "sick mice" goes public.
Yaokang Biology is a company that provides transgenic engineered mice, mainly providing customers with commercial mouse models with independent intellectual property rights, and at the same time carrying out one-stop services such as model customization, customized breeding, functional pharmacodynamic analysis, etc., to meet the needs of customers in basic research and experimental mouse models in the fields of gene function cognition, disease mechanism analysis, drug target discovery, pharmacodynamic screening and verification.
The animal species needed for pharmaceutical research and development are common mice, dogs, rabbits, and less common monkeys, zebras, and fish. In layman's terms, what disease is found clinically, it is necessary to "copy" the disease to the experimental animals and make a model, and then it can be targeted to develop effective drugs.
Biomedical technician Wang Tao (pseudonym) explained to Times Finance, "We usually conduct basic research on nerves, cardiovascular, immunity, drug screening and other aspects through different models of animals. Human-related diseases are simulated by establishing model animal models of genetically corresponding diseases. Due to the high genetic homology of humans and mice, mice are often used for experiments. ”
Founded in December 2017, Yaokang Bio has a certain historical inheritance relationship with Nanjing University and its Institute of Biology in terms of personnel and assets. In February 2019, the Institute of Biology transferred its own 2,612 mouse strains and related intellectual property rights to Yaokang Biologics for a transaction price of 16.7365 million yuan.
In the following two years, Yaokang Bio was favored by capital. In June 2019, Yaokang Biotech completed the first equity financing, with a financing amount of 160 million yuan and a valuation of 1.16 billion yuan.
In August 2020, Qingdao Sinopharm undertook 3.72% of the equity in the form of old share transfer, and the amount paid was 116 million yuan. Based on this price, Yaokang Bio is valued at 3.129 billion yuan.
In September of the same year, Yaokang Bio completed a 400 million yuan Pre-IPO round of financing, led by Hillhouse Venture Capital, and jointly participated in the investment by Yunfeng Fund, Sequoia Capital and other funds.
In June 2021, Yaokang Biotech submitted the application materials for listing on the Science and Technology Innovation Board, and intends to raise 820 million yuan. Since the number of shares after the issuance does not exceed 10% of the total share capital, the valuation of its IPO has soared to 8.2 billion yuan. Valuations have risen 7 times in two years.
Before the IPO, the controlling shareholder of Yaokang Bio was Nanjing Laoyan, who held 56.06% of the shares; the actual controller was Gao Xiang, who held a total of 38.06% of the company's shares. In addition, Hangzhou CDH holds 6.27%, Hillhouse's Zhuhai Xunheng holds 3.49%, and Sequoia Anchen holds 1.28%.
With the rise of the domestic biomedical industry, animal model enterprises have been on fire. According to Frost & Sullivan' estimates, China's animal model market has grown from $200 million in 2015 to $400 million in 2019, doubling in five years, and is expected to accelerate in the future, with a total market value of $1.5 billion by 2024, with an annual compound rate growth rate of 28.1%.
"Now, the market demand for animal models is increasing, and the competition between the head companies is becoming more and more fierce." Times Finance, an analyst at the Beijing Medical Investment Fund, said.
"Sick mice" are the most expensive over 10,000, and the gross profit margin directly catches up with Moutai
The main business of Yaokang Biology is divided into five parts, which can provide one-stop services from model customization, sales, breeding to efficacy evaluation. Among them, the high gross profit commercial mouse model sales business is the company's most important source of income.
From 2018 to the first half of 2021, the proportion of the main business income of Yaokang Bio was 61.79%, 49.88%, 58.59% and 61.54%, respectively, and the revenue was 32.9262 million yuan, 95.2684 million yuan, 152.5963 million yuan and 109.4558 million yuan, respectively.
During this period, among the commercial mouse models sold by Yaokang Biology, the most expensive spotted rat, also known as CKO mouse, had an average selling price of more than 10,000 yuan; the average price of the cheapest basic strain of mice was about 60 yuan; and the overall average price per mouse exceeded 200 yuan.
"The price of ordinary mice is low, generally 50-100 yuan / clit; CKO is expensive in genetic breeding to produce suitable model animals, the application of gene editing technology, a strain (3, 4) is about 30,000 or 40,000." Wang Tao said, "Before the technology was not mature, the process was many, the price was expensive, and the CKO was about 50,000 or 60,000 yuan per strain. Now the maturity of technology is the main reason for the cost reduction. ”
From the perspective of gross profit margin, the gross profit margin of the main business of Yaokang Bio is significantly higher than the average of comparable companies in the same industry.
Screenshot source: Prospectus
The profitability of the spotted rat is even better, with gross profit margins of 94.88%, 94.18%, 95.65% and 93.13% respectively, comparable to Moutai in Guizhou (600519.SH).
Spotted rats make money, but also burn money. The "Spotted Rat Program" is a large-scale R&D plan launched by Yaokang Bio in 2019, and as of June 30, 2021, it has invested nearly 60 million yuan in R&D expenses, accounting for more than 50% of the total R&D expenses in the same period.
"This type of company has a high threshold and has requirements for instruments, equipment, personnel, etc." Wang Tao said.
According to Times Finance, the breeding of laboratory animals is an asset-heavy industry, and the threshold of relevant technology and experience is not low. At present, the regional characteristics of the domestic transgenic mouse industry are obvious. The key reason is that the laboratory animals are living and there is a transport radius. If laboratory animal enterprises want to be deployed nationwide, they need to establish production facilities in various places and undertake corresponding production and seed preservation functions, which is not an easy task.
In addition, due to the complexity of the model validation process, the development cycle often takes up to two or three years. In the face of rapidly growing market demand, most model animal companies have chosen to work hard to increase production capacity.
According to the prospectus, Yaokang Bio plans to raise 820 million yuan, of which 600 million yuan is used for the construction project of the model animal mouse research and development and breeding integration base, and 220 million is used for the real-world animal model research and development and transformation platform construction project.
This article originated from Times Finance