On the evening of April 30, 2022, Zhenbaodao Pharmaceutical (stock code: 603567), a listed pharmaceutical company on traditional Chinese medicine, released its 2021 annual report and 2022 Q1 quarterly report. The data shows that in 2021, Zhenbaodao Pharmaceutical achieved operating income of 4.127 billion yuan, an increase of 21.24% year-on-year. As of December 31, 2021, the total assets of Zhenbaodao Pharmaceutical reached 11.506 billion yuan, an increase of 12.43% over the beginning of the year.
In addition, we found that The operating income of Zhenbaodao Pharmaceutical in the Q1-Q4 quarter of 2021 has maintained continuous growth, reaching 727 million yuan, 903 million yuan, 1.073 billion yuan and 1.424 billion yuan respectively. In the Q1 quarter of 2022, Zhenbao Island achieved operating income of 1.004 billion yuan, an increase of 38.07% year-on-year, and net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses of 132 million yuan, an increase of 14.79% year-on-year.
Affected by the epidemic and relevant national policies, the operating income of many pharmaceutical companies is not very optimistic, and it is reflected in the stock price accordingly: the entire pharmaceutical sector of the secondary market in 2021 has been affected by different degrees of shocks, and the stock price trend of some medical companies will further decline in 2022.
Judging from The 2021 annual report and the 2022Q1 quarterly report of Zhenbao Island, it can be said that the company's performance can maintain steady growth in the current downturn in the general market situation of the pharmaceutical sector, which can be said to be very rare. So, what exactly did Treasure Island do right? What is the secret to achieving revenue growth against the trend?
The secret of revenue growth against the trend:
Focus on the main business of traditional Chinese medicine and achieve steady progress
Through combing and analyzing the 2021 annual report of Zhenbao Island and the quarterly report of 2022 Q1, Artery Network believes that Zhenbao Island Pharmaceutical can achieve revenue growth in a general environment, mainly in the following three aspects:
1. The market share of the main products is in the front, and the exclusive product thrombosis capsule continues to contribute to outstanding performance
As a pharmaceutical company that started with traditional Chinese medicine, Zhenbaodao Pharmaceutical has taken the traditional Chinese medicine business as the core in recent years, and has continuously expanded into the field of chemical medicine and biological medicine, and has now formed a product layout from APIs, chemical preparations, traditional Chinese medicine preparations, and biological preparations, with a total of 45 drugs for cardiovascular, cerebrovascular, respiratory, pediatric, orthopedic and other diseases, including 12 basic drugs and 25 medical insurance products.
Under the background of the increase in the total population and the intensification of population aging, cardiovascular and cerebrovascular drugs and respiratory disease drugs provide a huge market foundation. As one of the common diseases of the elderly, cardiovascular and cerebrovascular diseases have continued to increase in recent years, and the market demand for related drugs has continued to increase; the prevalence of respiratory diseases, the two-week visit rate, and the hospitalization rate have also shown an upward trend.
Under the background of continuously increasing market demand, Zhenbao Island has formed a product layout with injection blood plug, Shu henin injection, thrombotic capsule, compound Qianlan oral liquid and pediatric hot syrup as the mainstay, supplemented by other general medicine products, covering the whole product line of traditional Chinese medicine, chemical drugs, biological drugs, generic drugs and innovative drugs. According to the 2021 annual report, the market share of Zhenbao Island's main products ranks the forefront of the industry.
Among them, oral thrombosis capsules, as the exclusive product of Zhenbao Island Pharmaceutical, have maintained rapid growth in recent years. In 2021, the sales performance of thrombotic capsules was eye-catching, and the sales revenue rose by more than 36% year-on-year, becoming another potential product of the company in the cardiovascular disease drug market. The outstanding performance contributed by the exclusive product Thrombosis Capsules directly promoted the operating income of the Zhenbao Island Nervous System Drugs (Cerebrovascular Drugs) segment to increase by 101.24% compared with last year.
It is well known that in the principle of medication, oral administration is often better than intramuscular injection over infusion, and patient compliance is higher. Under the background of continuously increasing market demand, oral administration of thrombotic capsules will undoubtedly continue to be released in the future.
2. The business of the medicinal materials trading center has entered the harvest period, which has promoted the steady growth of the company's traditional Chinese medicine sector
Arterial Network learned that since 2014, Zhenbao Island has begun to plan and expand the layout of the upstream industrial chain of Chinese herbal medicines. On August 15, 2017, ZhenbaoDao Pharmaceutical announced that it intends to invest 2.188 billion yuan to build the Bozhou Chinese Herbal Medicine Commodity Trading Center project. In September 2019, Zhenbao Island officially opened the Bozhou Chinese Herbal Medicine Commodity Trading Center. "This is an important part of extending the layout of The Treasure Island's traditional Chinese medicine industry chain," said Chen Hai, then executive vice president of Zhenbao Island Group (currently president of Zhenbao Island Pharmaceutical), at the opening ceremony of the Bozhou Chinese Herbal Medicine Commodity Trading Center on September 8, 2019.
As the country's first bulk Chinese herbal medicine spot trading platform approved by the Anhui Provincial Government, Bozhou Chinese Herbal Medicine Commodity Trading Center has built a modern market circulation system for Chinese herbal medicines in the Internet environment by using a new business model of "Chinese herbal medicine + Internet + warehousing and logistics + quality inspection + financial services + industrial support", and promoted the transformation and upgrading of the Chinese medicine industry.
Nowadays, the business sector of Bozhou Chinese Herbal Medicine Trading Center, which has spent a lot of energy and heavy investment on Zhenbao Island, has entered the harvest period and begun to promote the steady growth of the company's traditional Chinese medicine plate - in 2021, Zhenbao Island's Chinese herbal medicine trading business will achieve operating income of 2.189 billion yuan, accounting for 53.04% of the company's total operating income.
Objectively speaking, Zhenbao Island's performance can achieve steady growth and achieve eye-catching performance in the trade business of Chinese herbal medicines, mainly because it has eaten the policy dividends of the development of the Chinese medicine industry.
In recent years, national policies have continuously released positive signals to the Chinese medicine industry: from the State Council issuing the Outline of the Strategic Plan for the Development of Traditional Chinese Medicine (2016-2030) in 2016, to the Opinions on Promoting the Innovative Development of Traditional Chinese Medicine Inheritance issued by the CPC Central Committee and the State Council in 2019, the State Medical Insurance Bureau and the State Administration of Traditional Chinese Medicine issued the Guiding Opinions on Medical Insurance supporting the inheritance and innovative development of Traditional Chinese Medicine at the end of 2021, and then to January 2022, the State Administration of Traditional Chinese Medicine, The Office of the Leading Group for Promoting the Construction of the "Belt and Road" jointly issued the "Development Plan for Promoting the High-quality Integration of Traditional Chinese Medicine into the Belt and Road Initiative (2021-2025)"...... The policies of national ministries and commissions have been increased layer by layer to promote the vigorous development of the traditional Chinese medicine industry.
Under the major industry development opportunities, who can take the lead in solving industry problems and promoting the development of the industry can enjoy the policy dividends under the vigorous development of the industry. Treasure Island has clearly seized the momentous opportunity.
The booming Chinese medicine industry has brought about a growing market demand for Chinese herbal medicines. According to the "Ai Media Report: 2019-2021 China's Chinese Herbal Medicine Industry Development Status and Industrial Chain Analysis Report" data, China's Chinese herbal medicine market size was 101.8 billion yuan in 2017, reached nearly 124.6 billion yuan in 2018, is expected to reach 170.8 billion yuan in 2022, and will exceed 200 billion yuan in 2024, with an average annual compound growth of nearly 10%. Driven by a series of national support policies, the strategic position of Chinese herbal medicines has gradually become prominent, the Chinese herbal medicine industry has continued to grow and develop, and the expansion of the scale of the Chinese herbal medicine market has considerable prospects.
However, due to the situation of "small, scattered and chaotic" in the mainland Chinese herbal medicine industry, especially with the further expansion of the scale of the Chinese herbal medicine industry, the traditional circulation mode of Chinese herbal medicines in the mainland has not been fundamentally changed, and the traditional Chinese herbal medicine trading mode cannot meet the needs of modern industrial production - the Bozhou Chinese herbal medicine commodity trading center built by Zhenbao Island is supported by the offline display market and online trading platform, providing online trading of bulk Chinese herbal medicines for pharmaceutical farmers, pharmaceutical manufacturers and pharmaceutical companies, solving the asymmetry of information between upstream and downstream customers in the industry. The difficulty of buying and selling and the lack of guarantee of commodity quality are in line with the development of the industry.
In the future, with the continuous expansion of the scale of this business segment and the formation of a number of Chinese herbal medicine bases of the company, the trade business of Chinese herbal medicines on Zhenbao Island will be further expanded, and then become the company's new business pillar.
3. "Combination of industry and finance", comprehensively strengthen the construction of corporate brand, and successfully complete the fixed increase investment project driven by scientific and technological innovation
In February 2020, zhenbao island comprehensively strengthened the construction of corporate brand in accordance with the strategic development layout of "combining industry and finance", and launched a non-public stock issuance project. The project was successfully approved by the CSRC at the end of January 2021 and officially obtained the SFC's issuance approval on February 5, 2021.
According to the company's annual report, this non-public stock offering project was finally allocated to subscribe to a total of 12 investment institutions (and natural persons), and Zhenbao Island successfully raised 1.238 billion yuan. Zhenbao Island said that the non-public issuance of shares has provided a strong financial guarantee for the company to broaden its strategic business layout, expand the scale of production business, enrich the pipeline of R&D products, etc., and will be mainly used for innovative drugs and generic drug R&D platform projects, Jixi Branch Phase III engineering construction projects, Chinese herbal medicine production area processing projects, and information upgrading construction projects.
The construction of the R&D system of "One Heart and Four Hospitals" was completed,
The multi-faceted innovative layout is firing at the same time, and the future can be expected
The 2021 revenue that broke through the 4 billion revenue mark and achieved steady growth did not actually show the true "performance" of Zhenbao Island. The fruitful results of some innovative measures laid out by the company in recent years will gradually enter the golden harvest period in the next few years.
On the whole, in 2021, Zhenbao Island will continue to deepen the promotion of traditional Chinese medicine, coordinated development of chemical drugs and biological drugs, and comprehensively develop new research and development concepts, and complete the construction of the research and development system of "one heart and four hospitals".
"Yixin" refers to the Beijing R&D Management Center, and "Four Hospitals" refers to the Beijing Pharmaceutical Research Institute, Harbin Pharmaceutical Research Institute, Bozhou Pharmaceutical Research Institute and Hangzhou Pharmaceutical Research Institute. With "one heart" as the center and link, with the "four hospitals" as the base, through the rational layout of "R&D generation, planning generation", Zhenbao Island carries out in-depth cooperation with well-known universities, scientific research institutions, CRO enterprises, etc., focuses on the innovative research and development of the three major product systems of traditional Chinese medicine, chemical medicine and biological medicine, and shifts from the research and development mode based on generic drug research and development to the research and development mode based on high-end preparation and innovative drug research and development, and at the same time continuously moves towards the international stage.
At the sub-bureau, Zhenbao Island simultaneously carries out multi-faceted layout innovation in the three major product systems of traditional Chinese medicine, chemical medicine and biological medicine.
Field of Traditional Chinese Medicine
In the field of traditional Chinese medicine, Zhenbao Island continues to enrich the product pipeline, carries out the secondary development of traditional Chinese medicine varieties around the existing large varieties and potential varieties, and at the same time exerts efforts to formulate granules, hospital preparations and other new Chinese medicine products, promotes the filing and registration of hospital preparation products, and continues to promote the development of innovative Chinese medicine drugs such as qingxia and gastric prescription.
In terms of the secondary development of existing varieties, Zhenbaodao Pharmaceutical cooperated with Tianjin University of Traditional Chinese Medicine to carry out classical formula research, and cooperated with more than a dozen scientific research institutes such as Peking University, Zhejiang University, China Academy of Chinese Medical Sciences, Shanghai Pharmaceutical Industry Research Institute, Shanghai University of Traditional Chinese Medicine, etc., to comprehensively and deeply carry out basic research on pharmacodynamic substances, research on quality control methods, evidence-based medicine research, and exclusive variety introduction.
In terms of formula granule research and development, Zhenbaodao Pharmaceutical actively participates in the formulation of national standards, establishes a consistency evaluation platform for formula granules and decoctions, and now has advanced research levels of technology and quality standards for Chinese medicine formula granules.
In terms of in-hospital preparations, at present, Zhenbaodao Pharmaceutical has completed 49 in-hospital preparations based on the experience of traditional Chinese medicine masters and famous old Chinese medicine practitioners, of which 39 varieties have been approved to be transferred and used in hospitals above the second grade in Heilongjiang Province, and have obtained medical insurance reimbursement qualifications. After these in-hospital preparations are put into the market, through their efficacy and safety advantages and policy advantages, they will continue to replace similar proprietary Chinese medicines in the market.
Chemical medicine field
In the field of chemical medicine, Zhenbao Island has established a special preparation research and development platform through technology introduction and technical cooperation, and adheres to the combination of imitation and innovation, the combination of cooperative introduction and independent research and development, the combination of domestic registration and import and export registration, and the transformation from generic drug research and development to high-end preparation and innovative drug research and development. Its generic drugs involve 67 varieties in 9 major areas, and its innovative drugs focus on antiviral and anti-tumor fields.
At present, the research and development of new drugs in Zhenbao Island is progressing smoothly and the results are remarkable, and innovative drug projects such as AKT kinase inhibitor HZB0071, anti-liver cancer class 1 innovative drug pan-FGFR inhibitor HZB1006, anti-influenza virus class 1 new drug injection HNC042, anti-idiopathic pulmonary fibrosis class 1 new drug ZBD0276 tablets and other innovative drug projects have been approved and obtained European and American patents.
Field of biologics
In the field of biologics, Zhenbao Island focuses on the frontier of research and development in the global field of biological drugs, takes clinical needs as the guide, looks for mergers and acquisition opportunities around the company's development strategy, accelerates the introduction of overseas varieties and the merger and acquisition of domestic high-quality targets, and accelerates the company's strategic transformation and internationalization.
In June 2021, Hu Lin Longpeng, a shareholder holding more than 5% of the shares held by the joint shareholders of Zhenbao Island, jointly invested in Tris Pharmaceutical to accelerate the layout of the biopharmaceutical field. Among them, Zhenbao Island invested 400 million yuan, accounting for 16.67% of the total share capital after the capital increase and share expansion of Tris (later due to the withdrawal of one of the shareholders from the investment, the shareholding ratio of Zhenbao Island calculated according to the investment amount of 400 million yuan agreed in the Investment Agreement was passively changed to 17.0211%), and the investment was paid in two installments. As of December 31, 2021, Zhenbao Island has actually invested $200 million.
According to public information, Founded in 2011 by overseas returned elites led by Dr. Wu Youling, an overseas returned expert, and Zhejiang private entrepreneurs, Tris Pharmaceutical is an innovative biopharmaceutical enterprise integrating R&D, pilot scale-up and commercial production and sales, aiming to face the global market, develop and produce cancer treatment monoclonal antibody drugs with superior quality and patients. The core team of Tris has rich experience in antibody research and development, process, quality to commercial large-scale production, and is fully in line with the level of internationalization. In addition, it is worth mentioning that Theresa has China's first large-scale commercial biopharmaceutical production base that meets international cGMP standards, with a commercial scale of 20×00L (4×5000L), which is extremely cost-competitive and can provide CDMO services for partners at home and abroad.
At present, Theresa has 9 innovative drugs and similar drug products under development, of which 3 products have been approved for clinical trials, which is the first enterprise in China to successfully declare biosimilar drugs in the United States. Its product treatment areas cover a variety of malignant tumors (lymphoma, lung cancer, colorectal cancer, kidney cancer, pancreatic cancer, liver cancer and breast cancer, etc.), and the technical fields involve targeted therapy, biological missile-monoclonal coupling (ADC), immunotherapy for cancer, bispecific antibodies, nano antibodies, etc.
Investing in Tris means that Zhenbao Island has deeply laid out the field of biological drugs and accelerated the strategic transformation and internationalization of Zhenbao Island. In addition to Tris, Zhenbao Island has also invested in a number of ADC companies, including Duoxi Bio and Eccorice, directly or through its industrial funds. The commercial production capacity that Terrasse already has can be coordinated with other biopharmaceutical companies invested in Zhenbao Island to accelerate the efficiency of innovative products in industrial transformation.
By investing in bio-innovative pharmaceutical companies such as Tris, Duoxi Biology and Accaris, Zhenbao Island focuses on a variety of major oncology diseases, with ADC as the core product, and synchronously lays out monoclonal antibody and dual antibody products. Zhenbao Island said that the company will form a pipeline of 15-20 biological drug products with echelons within 3 years, and strive to achieve the listing of 3-5 varieties approved within 5 years.
During the reporting period, Zhenbao Island had 4 innovative drugs for chemical drugs under research, 41 generic drugs for chemical drugs, 3 innovative drugs for traditional Chinese medicines and 49 projects for in-hospital preparations. In 2021, Zhenbaodao Pharmaceutical has declared more than 10 drugs (under approval) in total, and it is expected that it will be declared at a rate of 5 drugs per year in the future.
With the passage of time, with the encouragement of the national policy on the Chinese medicine industry, Zhenbao Island, which is keen on innovation, will further open up profit margins with a series of innovative achievements and move forward under the wave of pharmaceutical reform.