(Report producer/analyst: Donghai Securities, Du Yonghong, Chen Cheng)
1. Continuous and steady growth, full incentives in place
Founded in 1985, Lizhu Group is a comprehensive pharmaceutical group company integrating pharmaceutical R&D, production and sales, and is a listed pharmaceutical enterprise in A+H.
The controlling shareholder of the company is Health Yuan (600380. SH), the actual controller is Zhu Baoguo.
After more than 30 years of continuous development, the company currently employs more than 8,000 people. The company's products cover chemical preparations, traditional Chinese medicines, APIs, biological drugs, diagnostic reagents and other sectors, and continue to move towards innovative drugs and complex preparations with high barriers. In 2021, the company's revenue scale reached 12.06 billion yuan, and the net profit scale reached 1.78 billion yuan.
1.1. Long-term sustained and steady growth
The company's operating income increased from 3.944 billion yuan in 2012 to 12.064 billion yuan in 2021, with an average annual compound growth rate of 13%, and the net profit excluding non-attributable parent increased from 396 million yuan in 2012 to 1.366 billion yuan in 2021, with an average annual compound growth rate of 17%, and the company's revenue and profit side have maintained steady growth in the past 10 years.
From the perspective of revenue composition, the proportion of revenue of western pharmaceutical preparations has increased year by year, and innovative drugs and high-barrier preparations are the core growth drivers.
From the perspective of profitability, the company's ROE and sales net profit margin is stable, and the company's non-net profit margin in 2021 is 13.49%, and the ROE level is 12.51%, maintaining stable profitability for many years.
The gross profit margin of the company's sales remained at a high level of more than 60%, the gross profit margin of the western medicine sector increased steadily, the gross profit margin of the API sector continued to increase, and the proportion of gross profit of the two sectors continued to increase, which had a positive pulling effect on the company's overall gross profit margin.
From the perspective of four expenses, the company's sales expense ratio has shown a steady downward trend with the expansion of revenue scale, and the sales expense ratio has been about 30% in the past three years; The management expense ratio is relatively stable, maintaining at about 6% in the past three years; Finance expense ratios are mostly negative; The R&D expense ratio is on an upward trend, with the R&D expense ratio exceeding 10% in 2021.
Overall, the company's four expense ratios have been maintained at a level of about 45% for a long time, and the cost control is good.
From the perspective of the company's cash flow, the company's sale of the equity of subsidiaries in 2017 has greatly increased the net profit and monetary funds in the current period, and the total amount of the company's monetary funds and trading financial funds in the past five years has been 8.5-10 billion yuan, with abundant cash flow.
From the perspective of asset-liability ratio, the company's asset-liability ratio has been 30-40% in the past five years, maintaining a reasonable range. From the perspective of operating cash flow, except for 2017, the ratio of the company's net operating cash flow to net profit in most other years was greater than 1, and the company's operating payment collection was good.
1.2. Employees are fully motivated and shareholders actively give back
In October 2020, the company issued the "Medium and Long-term Business Partner Stock Ownership Plan", based on the net profit attributable to the company's shareholders in 2018 after deducting non-recurring profits and losses, taking 2019 to 2028 as the assessment year, and within the 10 years from 2020 to 2029, taking the compound growth rate of net profit realized each year as the assessment index, and implementing excess progressive provision for each period of special funds, the specific calculation ratio is shown in the following table. The total number of shareholding plans is 80, including 9 directors (excluding independent directors), supervisors and senior management.
In October 2022, the company issued the "2022 Stock Option Incentive Plan", which intends to grant 20 million stock options to incentive recipients, with an exercise price of 31.31 yuan / A share, and the total number of incentive recipients granted for the first time is 1034, which are the company's directors, senior management, middle management and related core backbones, and the performance assessment target is based on the net profit in 2021, and the compound growth rate of net profit from 2022 to 2024 is not less than 15%.
Compared with the partner continuation plan, this stock option incentive plan is based on 2021 net profit and covers a wider range of groups.
The company has repeatedly implemented equity incentive plans for senior management personnel and core key personnel, and combined short-term assessment goals and medium and long-term development goals to motivate employees to grow together with the company, boost employee enthusiasm, stimulate shareholder confidence, and at the same time reflect the company's confidence in its long-term and steady development (15% compound growth rate of net profit).
According to the announcement disclosure information, the company updates the shareholder return plan every three years, and at the end of 2019, the company issued the "2019-2021 shareholder return plan", which indicates that the annual profit distributed in cash is not less than 80% of the distributable profit realized in the current year, showing the company's sincere commitment to shareholders to share business results.
According to Wind data, the company's cumulative cash dividends from 2017 to 2021 exceeded 5 billion yuan.
2. Innovative drugs and high-barrier preparations are the core growth drivers of the company
2.1. The rapid increase of elaprazole drives the high growth of the digestive tract plate
Digestive system diseases are common and frequent diseases, according to statistics, there are 120 million patients with digestive tract diseases in mainland China, and the incidence is increasing year by year; The acceleration of the pace of life, irregular diet and rest, mental pressure and many other factors have caused the occurrence of various digestive diseases, and the patients have shown a younger trend; The recurrence rate of digestive tract diseases is high, most patients need continuous medication, and the increase in the number and frequency of patients provides a continuous and stable market demand for digestive system drugs.
Digestive tract diseases mainly include acute gastritis, chronic gastritis, peptic ulcer, functional dyspepsia, etc., among which peptic ulcer is the most common, the current treatment of peptic ulcer mainly includes PPI (proton pump inhibitor), H2 receptor antagonist (tidine) and gastric mucosal protectant (bismuth) three major classes of drugs.
The digestive tract is Lizhu's advantageous field, and the company has many products in this field, such as iprazole, rabeprazole, Lizhuwei Sanlian, and Lizhudela. In recent years, the rapid increase of the innovative drug iprazole has maintained a rapid growth trend in the digestive tract plate.
In 2021, the digestive tract segment accounted for 51.5% of the overall chemical revenue, accounting for more than 30% of the company's total revenue, becoming an important growth pole on the company's revenue side. In addition to the products listed in the table below, the company has also deployed potassium-competitive acid blocker (P-CAB) drugs in its pipeline, which are currently in the preclinical research stage.
P-CAB is a new generation of reversible proton pump inhibitors, compared with PPI, P-CAB has the advantages of fast onset of action (full effect of the first dose), long-lasting acid suppression (good acid suppression effect at night), and convenient to take (no need to take before meals).
PPI class drugs are the most widely used gastric acid secretion inhibitors in clinical practice, and are widely used in the treatment of gastroesophageal reflux, peptic ulcer and Helicobacter pylori infection.
Since the launch of omeprazole, lansoprazole, pantoprazole, rabeprazole, esomeprazole and other products have been launched one after another. From the sales of PPI drugs in the sample hospitals, the overall sales showed a downward trend while the sales volume maintained a stable upward trend, mainly due to the sharp decline in the unit price of PPI drugs after they entered the national centralized procurement catalog.
From the dosage form, according to the sample hospital data, the market share of injections exceeds 60%, but in addition to hospital terminal sales, some tablets are also sold in out-of-hospital pharmacy terminals.
Elaprazole is a Class 1.1 innovative drug with a two-dose version of tablets and injections, which is exclusive to the company.
The tablet product - Ilaprazole enteric-coated tablets (size 5mg/tablet) was launched at the end of 2007 and was approved for duodenal ulcer; A new indication for reflux esophagitis was added in 2017. In 2017, Aipu tablets were included in the national medical insurance catalog, and according to the bidding price, the price of tablets was 10-15 yuan / tablet.
Injection product - Ilaprazole sodium for injection (specification 10mg/tube) was launched in 2017, the indication is peptic ulcer bleeding, the unit price is 258 yuan/10mg, the dosage is: the initial dose of 20mg, subsequent 10mg each time, once a day, for 3 consecutive days.
The product was successfully included in the medical insurance catalog through national medical insurance negotiations in 2019, and the unit price was reduced to 156 yuan/10mg, and the payment scope was limited to patients with fasting medical orders or dysphagia; In 2021, the medical insurance was renewed again, the indication was peptic ulcer bleeding, the unit price was reduced to 71 yuan/10mg, and the payment limit was also canceled, and it enjoyed no more secondary negotiation, not affected by the proportion of drugs, the average cost and other conditions.
Ilaprazole has the following advantages over other PPI preparations:
First, the use dose is low, the acid suppression effect is good: in PPI drugs, the standard daily doses of iprazole to achieve the therapeutic effect are 5mg/10mg (oral) and 10mg (injection), which is the lowest among similar drugs, and the smaller drug dose makes the corresponding toxic side effects relatively small.
Second, the effect is longer-lasting: the half-life of iprazole is 3-4 hours, which is the longest in PPI drugs, so the time to suppress gastric acid is relatively longer.
Third, less drug-drug interaction: unlike other PPI drugs, elaprazole is not metabolized by CYP2C19 in the CYP450 enzyme family and is not affected by the gene polymorphism of CYP2C19.
From the perspective of use scenarios, the main promotion field of iprazole is gastroenterology, among which patients with chronic diseases such as peptic ulcer and reflux esophagitis can take Epp tablets, and acute patients such as peptic ulcer bleeding can use Epp injections.
PPI tablets are sold through the in-hospital market and the out-of-hospital market, from the price point of view, the average daily price of PPI oral preparations ranges from 1-24 yuan, and the price of second-generation PPI (Rabe, Esiome, Aipu) is generally higher than that of first-generation drugs (Ogilvy, Lanzo, Panto), of which Aipu has the highest unit price among similar drugs; In terms of cycle of use, oral preparations of PPI need to be taken for 4-8 weeks, depending on the disease.
The main sales channel of PPI injection is in the hospital, from the price and use cycle, Aipu due to its strong acid inhibition ability and long-lasting, the drug cycle is the shortest in similar drugs, only need to be injected for three days, the first doubling dose, that is, 3 days 4 injections of the drug cycle, and after the price of Aipu was reduced to 71 yuan, the whole cost was 284 yuan, only higher than omeprazole and pantoprazole. Fast results and short use cycles can not only reduce the recovery time of patients, but also improve the efficiency of medical resources, and patients and doctors are more willing to use them.
In addition to gastroenterology, the company also takes advantage of the low drug interaction of iprazole to vigorously promote cardiology.
Clopidogrel is currently the most widely used antiplatelet drug in clinical practice, clopidogrel inhibits platelet aggregation while hindering the formation of new blood vessels, affecting the healing of ulcers, so there is a risk of inducing ulcer bleeding. PPI can be used to prevent gastrointestinal damage caused by anti-hemorrhoeic plates and reduce the incidence of gastrointestinal adverse events. Clopidogrel enters the body to be metabolized by CYP2C19 to exert antiplatelet effects, omeprazole and other PPI drugs are also metabolized in the liver by CYP2C19, and omeprazole has a high affinity for CYP2C19; Therefore, when PPI drugs such as omeprazole are combined with clopidogrel, the two produce competitive inhibitory effects, thereby increasing the risk of ischemic stroke, compound stroke and myocardial infarction.
In February 2022, the State Food and Drug Administration issued the "Announcement on Revising the Instructions of Proton Pump Inhibitor Drugs", which clearly stated that the combination with clopidogrel was avoided/not recommended in the new instructions for omeprazole and esomeprazole sodium. Elaprazole is not metabolized by CYP2C19 in the CYP450 enzyme family and is not affected by the gene polymorphism of CYP2C19, so it has safety advantages in combination with clopidogrel. With a high incidence of cardiovascular disease and a large number of patients, Ilaprazole is expected to be further promoted in the field of cardiology with its safety advantages in combination with clopidogrel.
The use of PPI drugs in stress ulcer diseases makes them essential in the field of severe disease.
Stress ulcer refers to the body in a variety of severe trauma, critical illness or serious psychological disease and other stress conditions of acute gastrointestinal mucosal erosion, ulcer and other lesions, severe cases can be complicated by gastrointestinal bleeding, and even perforation, can aggravate and worsen the degree of pre-existing diseases, studies have shown that the mortality rate of stress ulcer bleeding in critically ill patients is as high as 50%, so it is important to prevent the occurrence of this complication. Commonly used clinical drugs for the treatment of stress ulcers include PPI, H2 receptor antagonists, gastric mucosal protectors, antacids, etc. According to CDE data, the marketing application for eprazole sodium for injection class 2.4 has been accepted by CDE, and the new indication is to prevent stress ulcer bleeding in severe patients, which is expected to be approved for marketing next year.
Aipu injection is expected to achieve rapid expansion in the field of severe disease with its advantages of fast onset and strong acid inhibition ability, and further open up product growth space.
In terms of research and development, the company continues to expand the oral dosage form of iprazole, in addition to enteric-coated tablet dosage form, the company is also developing a new dosage form of tablets - pellet enteric-coated tablets, and the clinical trial of this product has been accepted by CDE.
The pellet has a large surface area, which is conducive to drug absorption, high bioavailability, and the pellet can expand the drug release area to avoid the drug absorption affected by gastric emptying, which is more advantageous than ordinary enteric-coated tablets.
From the sales data of sample hospitals, the overall sales volume and sales of PPI injections have declined in the past five years, among which the average unit price of PPI products in 2022 has decreased, making the year-on-year decline in sales in 2022H1 more obvious. In the first half of 2022, the sales volume of Aipu injection in PPI injections at the sample hospital increased to 11%, and due to the relatively high unit price of Aipu injections, the sales of Aipu injections accounted for 25% of PPI injections.
The unit price of Aipu injection dropped to 71 yuan after the second national medical insurance negotiation in 2022, and the scope of use restriction was removed, and the medication cycle of 3 days and 4 injections was short, and the cost of the whole treatment was less than 300 yuan.
The advantages of efficacy, price, treatment time and other aspects make the promotion of Aipu injection more advantageous, and the penetration rate of secondary hospitals is expected to increase significantly after the unit price decreases; The removal of medication restrictions has further expanded the number of drug users; After the new indication of stress ulcer, it is expected to be promoted in the severely ill population, and there is still a large market space.
The sales volume of PPI tablets in the sample hospitals showed a steady growth trend, with a compound growth rate of 12.7% from 2018 to 2021; However, from the perspective of sales, PPI tablets are affected by the decline in price and show a downward trend year by year.
From the sales of Epp tablets, the compound growth rate of Aipu tablet sales from 2018 to 2021 is 19%, which is higher than the industry average; From the perspective of sales market share, the sales volume of Aipu tablets in the past five years accounted for 2-3%, which is still at a low level.
Due to the high and stable unit price of EP tablets, and the significant decline in the price of other PPI tablets of the same type, the proportion of sales of EP tablets has steadily increased, and the sales market share reached 24% in 2021.
Elaprazole tablets are the company's exclusive products, the price reduction pressure is relatively small, the current use in the sample hospitals is still at a low level, with the advantage of good clinical value, it is expected to be further recognized by doctors and patients under the company's vigorous academic promotion.
In terms of the out-of-hospital market, with the increase in consumer demand for high-quality varieties, the space of Epp tablets in the out-of-hospital market is also expected to be further expanded.
2.2. Rich products in the field of gonadotropins, microsphere preparations build high barriers
Gonadotropins are another important segment of the company in the field of chemical preparations, and in 2021, drug revenue in the field of gonadotropins accounted for 34.0% of the chemical preparation segment and 20.3% of the company's total revenue. In the gonadotropin plate, leuprorelin microspheres are the main varieties, which is another 1 billion yuan blockbuster variety of the company.
Leuprolide is a gonadotropin-releasing hormone (GnRH) receptor agonist drug.
The hypothalamic-pituitary-gonadalaxis (HPG) plays an important role in the reproductive and immune systems, and hypothalamic-pituitary-gonadalaxis (HPG) secretes GnRH, a 10-amino acid peptide hormone that binds to receptors on the pituitary cell membrane, and GnRH promotes the pituitary gland to secrete luteinizing hormone (LH) and follicle-stimulating hormone (FSH).
GnRH agonists and antagonists are both GnRH analogues obtained by replacing or removing pharmacologically active amino acids of GnRH and changing the chemical structure.
GnRH agonists represent drugs such as leuprolide, goserelin, and triptorelin; Representative drugs of GnRH antagonists are degarelix, cetrorelix, etc.
GnRH agonists are peptide drugs that need to be injected, and their half-life is short and the treatment period is long, and the microsphere dosage form can effectively solve the above problems, reduce the number of injections, and improve patient compliance. At present, the GnRH agonist drugs marketed in mainland China mainly include three dosage forms: daily dosage form, one-month sustained release and three-month sustained release.
The original drug of leuprorelin microspheres was produced by Takeda in Japan and entered China in 2003. At present, there are 3 domestic manufacturers on the market, namely Japan's Takeda, Lizhu Group and Beijing Boente.
In terms of dosage forms and specifications, Takeda has two dosage forms and three specifications in one month (1.88mg, 3.75mg) and three months (11.25mg); Lizhu and Boente are available in single dosage forms and sizes (3.75 mg per month).
From the price point of view, the import and domestic unit prices of 3.75mg bright prorelin are 1650 yuan and 1300 yuan respectively.
According to the sales data of the sample hospitals, the variety has maintained good growth for many years, with Takeda, Lizhu and Boente accounting for 35%, 35% and 30% respectively in 2021.
Leprolide mainly has the following indications:
1. Endometriosis.
The dosage is 3.75mg once every 4 weeks, and the treatment cycle depends on the patient's condition, generally 3-6 months. Endometriosis is a condition in which endometrium-like tissue grows outside the uterus, causing pain and/or infertility and jeopardizing the patient's quality of life.
According to comprehensive literature, about 10% of women of reproductive age suffer from internal heterogeneity. Surgery and drug treatment are the main treatment methods of endometriosis, among which the treatment drugs mainly include non-steroidal anti-inflammatory drugs, progestins, compound oral contraceptives, gonadotropin-releasing hormone agonists and traditional Chinese medicine products.
2. Uterine fibroids.
The dosage is 1.88 mg every 4 weeks, but 3.75 mg for patients who are overweight or have a significantly enlarged uterus. Uterine fibroids are formed by the proliferation of smooth muscle tissue of the uterus, which is a common benign tumor disease in women. GnRH agonists can not only relieve symptoms such as dysmenorrhea, non-menstrual lower abdominal pain, and compression, but also reduce the size of fibroids, and the course of treatment is generally 3-6 months.
3. Prostate cancer, estrogen receptor-positive premenopausal breast cancer.
The dosage is 3.75mg every 4 weeks or 11.25mg every 12 weeks.
The incidence of prostate cancer ranks second in the world in the world for male malignant tumors, and the incidence of prostate cancer in the United States has surpassed lung cancer and has become the most serious malignant tumor that endangers men's health.
From 2015 to 2020, the number of cancer patients in China increased, with new cases of prostate cancer increasing by 60% and deaths increasing by 89%, making it one of the fastest growing tumors.
According to the "Drug Market and Target Analysis Report in the Field of Prostate Cancer", it is predicted that there will be 115,000 new cases of prostate cancer in China in 2020, with 51,000 deaths, and the incidence and mortality rate have increased significantly, which is a large tumor that needs urgent attention and investment in the future.
The occurrence and progression of prostate cancer is driven by androgen receptor (AR), so endocrine therapy is an important treatment for prostate cancer. From the current prostate cancer drug situation in mainland China, GnRh drugs account for more than 60%, of which leuprolide has the highest market share.
BREAST CANCER IS THE MOST COMMON MALIGNANT TUMOR IN WOMEN, ACCORDING TO GLOBOCAN STATISTICS, THE NUMBER OF NEW CASES OF BREAST CANCER IN MAINLAND WOMEN IN 2020 WAS 416,300, WHICH IS THE FOURTH LARGEST CAUSE OF CANCER (9.1%), SECOND ONLY TO LUNG CANCER (17.9%), COLORECTAL CANCER (12.2%) AND GASTRIC CANCER (10.5%), OF WHICH HORMONE RECEPTOR POSITIVE (HR+) BREAST CANCER ACCOUNTS FOR 70% OF BREAST CANCER.
Endocrine therapy is the mainstay of treatment for patients with hormone receptor-positive breast cancer, including the selection of estrogen receptor antagonists (eg, tamoxifen), estrogen receptor modulators (eg, fulvestrant), aromatase inhibitors (eg, letrozole), and gonadotropin-releasing analogues (eg, leuprolide).
Gonadotropin-releasing hormone analogues can inhibit the secretion of luteinizing hormone and follicle-stimulating hormone, reduce estrogen levels in premenopausal patients, and hinder the growth of estrogen-dependent breast cancer cells.
4. Central precocious puberty: the dosage is once every 4 weeks, and the dose range is 30-180μg/kg, which can be appropriately adjusted according to the patient's gonadal axis inhibition.
Central precocious puberty is due to the hypothalamus increasing the secretion and release of GnRH, activating gonadal axis function in advance, leading to gonadal development and secretion of sex hormones, resulting in internal and external genital development and secondary sexual characteristics. Central precocious puberty is a common pediatric endocrine disorder with an incidence of about 1 in 5000 to 1/10000 and 5 to 10 times more likely in girls than boys. GnRH agonists are first-line agents for the treatment of central precocious puberty.
GnRH agonist drugs achieve therapeutic relief of related diseases and symptoms through the regulation of sex hormones, and have been well used and promoted in many departments such as gynecology, oncology, and pediatrics. In terms of sales of GnRH agonists in the sample hospitals, the overall growth of these drugs showed a good trend, with leuprolide having the highest sales, followed by goserelin and triptorelin having the lowest sales. Considering the necessary role of sex hormone regulation in endocrine therapy and the increased incidence of related diseases, GnRH agonist drugs are expected to maintain good growth.
In addition to leuprolide, the company's gonadotropin field also has many products such as urogonadotropin, chorionic gonadotropin, urinary follicle-stimulating hormone, etc., which are mainly used in the field of assisted reproduction.
In recent years, the prevalence of infertility has continued to increase due to many factors such as fertility concepts, childbearing age, and living habits.
According to Frost & Sullivan's research data, the prevalence of infertility in mainland China is expected to increase from 16.0% in 2018 to 18.2% in 2023. According to data from the National Bureau of Statistics, the proportion of women aged 35 and above who are not of optimal childbearing age among the women registered for marriage in mainland China is increasing year by year, and the trend of late marriage and childbearing and infertility is also highly overlapping.
Following the country's comprehensive liberalization of the two-child policy, a three-child policy was launched in 2021, aiming to increase people's willingness to have children and increase the birth rate, thereby gradually improving the mainland's population structure.
Assisted reproductive technology is an effective measure to solve the current population and infertility problems in the mainland. In recent years, the number of medical institutions approved to carry out assisted reproductive technology in mainland China has increased, from 451 in 2016 to 536 in 2020.
In terms of policy, in 2021, the Health Commission issued the "Guiding Principles for the Application Planning of Human Assisted Reproductive Technology" to standardize and guide the assisted reproductive technology service system; In 2022, the Beijing Municipal Medical Insurance Bureau issued the Notice on Standardizing and Adjusting Some Medical Service Price Items, which included 16 assisted reproductive technology projects involving a wide range of people, necessary for diagnosis and treatment, mature technology, safety and reliability into the scope of medical insurance category A reimbursement, and supported the development of assisted reproductive technology at the payment end.
Under the trend of increasing infertility rate year by year, the scale of the mainland auxiliary biology market continues to grow.
From 2014 to 2019, the size of the mainland assisted reproduction market increased from US$2.3 billion to US$4.4 billion, with a compound growth rate of 13.85%; It is predicted that the mainland assisted reproduction market will grow to $7.5 billion in 2023, with a compound growth rate of 14.47% between 2020 and 2023.
Assisted reproduction includes multiple steps such as egg promotion, ovulation, fertilization, embryo culture, embryo transfer, etc., and will be combined with a variety of drugs, mainly including the following categories:
1. Regulatory drugs - used to control the ovulation cycle, mainly including GnRh agonists (such as leuprolide) and GnRh inhibitors (cetrorelix);
Second, ovulation induction drugs - promote follicle growth and development, mainly including follicle stimulating hormone, urinary gonadotropin, letrozole, etc.;
Third, ovulation induction drugs - promote egg maturation and release, mainly including chorionic gonadotropin;
Fourth, luteal support drugs - to prepare for fertilized egg implantation, mainly including progesterone, dydrogesterone, etc.
The company has good competitiveness in the field of assisted reproduction, on the one hand, the product range is constantly enriched, cetrorelix was listed in 2021, and there are currently only three manufacturers producing and selling; On the other hand, the product continues to change and upgrade, in 2021 recombinant human chorionic gonadotropin successfully listed, compared with urine source human chorionic gonadotropin, recombinant human chorionic gonadotropin purity and safety is higher, the price is correspondingly higher, before the domestic market only one manufacturer Merck produced and sold recombinant human chorionic gonadotropin. Lizhu has been deeply engaged in the field of reproductive assistance for many years, with a solid academic promotion foundation and good brand effect.
2.3. The field of psychotropic drugs is vast, and long-acting dosage forms drive product upgrades
The pathogenesis of mental disorders is complex, treatment is difficult, and the disease is easy to repeat, which brings a heavy burden to patients and society.
According to data released by the Chinese Center for Disease Control and Prevention, the prevalence of mental disorders in China has shown an overall upward trend, and the number of people with various mental and psychological disorders has exceeded 100 million, of which the number of more serious mental disorders exceeds 16 million.
The results of the China Mental Health Survey show that the lifetime prevalence of mental disorders in mainland China is 16.6% (excluding Alzheimer's disease). At the same time, the rate of patients with mental illness in mainland China is low, and most patients with serious mental illness do not receive corresponding treatment. The scale of the mainland mental disorder drug market continued to grow, rising from 14.02 billion yuan in 2016 to 29.51 billion yuan in 2021, with a compound annual growth rate of 16%.
From the perspective of the use of various types of mental disorders, antidepressant drugs and antipsychotic drugs accounted for a relatively high proportion of drugs. With the increasing number of patients and the gradual increase in the rate of medical visits, the market size of mental disorders drugs in mainland China is expected to maintain good growth.
The company has two products, fluvoxamine and piperopirone, in the field of antipsychotic drugs, both of which are currently in a rapid growth stage of sales, with a total revenue of 412 million yuan in 2021.
Fluvoxamine is the first imitation in China, and piperopirone is the exclusive variety, which has a good market competition pattern. In addition to the above two varieties, the company also has two generic drugs of lurasidone and bunanserin in the marketing application stage and is expected to be approved next year; The research and development progress of long-acting preparation aripiprazole microspheres ranks in the forefront of China.
Antipsychotic drugs are mainly used to treat schizophrenia.
Antipsychotics mainly have two generations of drugs, the first generation of antipsychotics (FGA) exerts antipsychotic effects by blocking dopamine (AD) receptors, the main drugs include haloperidol, chlorpromazine, etc.; Second-generation antipsychotics (SGA) double block dopamine (AD) and 5-HT (serotonin), block dopamine more selectively, reduce the incidence of extrapyramidal adverse reactions, the main drugs include clozapine, asenapine, aripiprazole and so on. At present, the clinical application of antipsychotic drugs is mainly second-generation drugs.
Patients with schizophrenia have particular difficulty following medical instructions compared with other conditions, and non-adherence to oral antipsychotics is the most common cause of relapse. The reasons for non-compliance with treatment for patients with schizophrenia include drug side effects, lack of insight, and poor drug efficacy.
Antipsychotic long-acting drugs can not only improve adherence, but also are also suitable for patients who are disordered, apathetic or deny the disease and cannot take drugs regularly, and have good development prospects.
There is good evidence that treatment with long-acting injections is better than oral formulations in early-stage patients. Long-acting preparations have high R&D costs, long cycles, and high technical barriers, making development difficult.
At present, mainland antipsychotic drugs are mainly ordinary short-acting oral preparations, and the long-acting dosage forms in the second-generation drugs are only risperidone microspheres and paliperidone injections on the market, and long-acting dosage forms have a very broad alternative space.
Aripiprazole is a fat-soluble dihydroquinolinone antipsychotic recommended by authoritative guidelines for schizophrenia at home and abroad, which can partially stimulate dopamine D2 receptors (D2) and serotonin 1A receptors (5-HT1A) on the one hand, and completely antagonize serotonin 2A receptors (5-HT2A) on the other hand, known as dopamine system stabilizers. Aripiprazole tablets were first approved by the US FDA in November 2002, then approved for marketing in Australia, the European Union, Japan and other places, and approved for marketing in China in 2006.
In addition to the treatment of schizophrenia, aripiprazole can also be used to treat bipolar disorder, major depression, autism and childhood autism, and the treatment scenarios are rich. Aripiprazole topped the U.S. prescription drug sales charts for many years before its patent expired in 2015, peaking at more than $6 billion in annual sales.
After the patent period expired in 2015, sales of aripiprazole tablets began to decline. In 2013, the 1-month long-acting injection of aripiprazole jointly developed by Otsuka and Lundbeck was approved by the FDA and achieved good growth after marketing, with global sales of approximately $1 billion in 2021. In September 2022, the FDA accepted the marketing application for a 2-month long-acting injection of aripiprazole, which is expected to be available in 2023.
From daily dosage forms to one- and two-month long-acting dosage forms, products are continuously iterated and the life cycle is continuously extended.
From the perspective of the domestic market, aripiprazole has maintained stable growth as a whole, and the products are all Japanese dosage forms, including tablets, capsules, oral tablets, oral liquid and other dosage forms, of which tablets have the highest sales share, and there are no long-acting dosage form products on the market.
From the perspective of products under development, the long-acting intramuscular injection agent of Otsuka in Japan is in the production stage and has the fastest progress; The company's aripiprazole microspheres are declared as Class 2.2 new drugs, which are currently in the clinical phase I stage, and the research and development process is in the forefront of China.
Due to the particularity of the psychotropic drug patient population, the company has established an independent special line sales team for the mental field since 2019. The cultivation of the spiritual market requires a certain amount of time of intensive cultivation, but the corresponding is the high stickiness of products and brands. With the continuous strengthening of academic support, the continuous growth of the number of team members and the refinement of management assessment, the company's psychotropic drug segment is expected to become a new important growth pole.
3. Diversified field layout, broad growth space
3.1. The traditional Chinese medicine industry has a good foundation for development
Traditional Chinese medicine is a treasure of Chinese civilization, with a development history of more than 5,000 years and has made significant contributions to human health. In recent years, the state has successively introduced a number of policies to support the development of traditional Chinese medicine and encourage the inheritance and innovation of traditional Chinese medicine.
In March 2022, the "14th Five-Year Plan" for the development of traditional Chinese medicine was released, proposing that by 2025, the health service capacity of traditional Chinese medicine will be significantly enhanced, the high-quality development policy and system of traditional Chinese medicine will be further improved, the revitalization and development of traditional Chinese medicine will achieve positive results, and the unique advantages in the construction of a healthy China will be fully utilized. Cultural development and other dimensions to comprehensively promote the development of mainland Chinese medicine industry.
The report of the 20th National Congress also proposed to promote the inheritance and innovative development of traditional Chinese medicine, which once again shows that the country attaches great importance to the development of the traditional Chinese medicine industry.
With the growing demand for health in mainland China, health management has gradually moved from "treatment" to "prevention", and traditional Chinese medicine has unique advantages and important roles in the field of preventive treatment.
Traditional Chinese medicine emphasizes dialectical treatment from the perspective of "heaven and earth", and manages health according to time, place and person. From diagnosis to health care, TCM can promote deep integration with the health industry by giving full play to its advantages in the field of pre-existing diseases, carrying out corresponding TCM interventions for relevant groups.
Since the outbreak of the new crown epidemic, the important role played by traditional Chinese medicine in epidemic prevention and control has been widely recognized by all sectors of society, and traditional Chinese medicine has also ushered in good development opportunities. With the successive introduction of traditional Chinese medicine support policies, the enthusiasm of traditional Chinese medicine enterprises for R&D has increased, R&D investment has increased, and innovative achievements in the field of traditional Chinese medicine have continued to emerge.
According to statistics from the State Food and Drug Administration, the number of new traditional Chinese medicine drugs approved for marketing in mainland China reached 11 in 2021, a new high in the past five years, and the innovation vitality and development potential of traditional Chinese medicine have been continuously released.
Lizhu has a good industrial foundation in the field of traditional Chinese medicine.
In terms of R&D, the company has 1 national engineering technology research center for modern Chinese medicine (one of the earliest four major engineering centers of traditional Chinese medicine in China) and 2 provincial R&D centers to promote the effective transformation of scientific research results into productivity; In terms of medicinal materials, the company has a local high-quality medicinal material planting base of astragalus, codonopsis and other varieties; In terms of products, the company has 86 approvals for traditional Chinese medicines, including 21 exclusive varieties, covering oncology, respiratory, pediatrics, geriatrics and other fields.
From the perspective of revenue, the company's larger revenue in the field of traditional Chinese medicine, mainly ginseng Fuzheng injection and antiviral particles. Due to the continuous decline in sales revenue of ginseng Fuzheng injection, the overall revenue scale of the traditional Chinese medicine sector has fallen to about 1 billion.
The main components of ginseng Fuzheng injection are Codonopsis and Astragalus, which can effectively improve the body's immunity, and has the attenuating and synergistic functions of tumor radiotherapy and chemotherapy, and the main function is to invigorate qi and support righteousness, which is used for the adjuvant treatment of fatigue, less qi and lazy speech, self-sweating dizziness, lung cancer, gastric cancer and gastric cancer in patients with the above symptoms.
This product is a prescription drug and belongs to the medical insurance category B product.
Since 2017, Samqi Fuzheng has been successively affected by the restrictions on traditional Chinese medicine injections and medical insurance control fees, and the use of hospital has decreased, and its sales have shown a downward trend year by year. In recent years, the continuous growth of the number of tumor patients has promoted the diversified and innovative development of tumor drugs, and the company has continuously improved the clinical evidence-based medical research of ginseng Fuzheng injection, strengthened academic promotion, expanded the coverage of county-level medical institutions, and made efforts in the grassroots market.
At present, the income of Samqi Fuzheng has dropped to about 500 million yuan, and it is expected to gradually recover steady growth in the future under the background of the country's vigorous support for the development of the traditional Chinese medicine industry.
Antiviral particles are mainly used to treat wind fever colds, upper respiratory infections, influenza, and are OTC drugs, which have achieved good growth since the outbreak of the new crown epidemic in 2020.
In March 2022, the China Association of Chinese Materia Medica's released the "Expert Consensus on the Prevention and Treatment of Novel Coronavirus Pneumonia in Proprietary Chinese Medicine-2022", antiviral particles are recommended for the treatment of mild patients with new crown infection and ordinary patients. With the normalization of the prevention and control of the new crown epidemic, antiviral particles are expected to become a regular drug for the epidemic through good product strength and brand promotion. At the same time, antiviral drugs can treat various types of colds such as wind and fever colds, upper respiratory tract infections and viral infections, with a wide range of uses and broad market space.
The company recently established a traditional Chinese medicine division to increase investment and promotion in the research and development of traditional Chinese medicines.
On the one hand, the company will continue to increase academic support and clinical research on exclusive varieties of traditional Chinese medicine, and continue to explore and cultivate potential varieties. On the other hand, the company continues to increase investment in the research and development of new drug products, and currently has a total of 8 new Chinese medicine drug research projects, focusing on the clinical positioning of traditional Chinese medicine treatment of advantageous diseases and exclusive varieties, focusing on promoting the research and development progress of innovative projects.
At present, SXSHL gel, an improved new drug of traditional Chinese medicine, has completed preclinical experimental research, and TGDX granules of traditional Chinese medicine class 1.1 have completed exploratory clinical trial studies.
3.2. The profitability of the API segment continued to improve
After years of integration and development, the API Division of Lizhu Group is a subordinate API segment of Lizhu Group, which is currently composed of Lizhu Group Fuzhou Fuxing Pharmaceutical Co., Ltd., Lizhu Group New Beijiang Pharmaceutical Co., Ltd., Lizhu Group (Ningxia) Pharmaceutical Co., Ltd., Lizhu Synthetic Pharmaceutical Co., Ltd. and other subjects.
Since 2019, under the principles of security ring, quality improvement, cost reduction and market expansion, high-end varieties of APIs have achieved good growth, overseas markets have steadily expanded, the overall gross profit margin level has been greatly improved, and sales revenue and profitability have continued to increase.
In the first half of 2022, the company's API revenue reached 1.729 billion yuan (+18.3%), and the gross margin level reached 37.7%, accounting for 27.4% of the company's total operating income.
From the perspective of product categories, the company's APIs cover high-end antibiotics, high-end pet drugs, cephalosporins and intermediates, veterinary drugs and other products. Under the transformation and upgrading, the profit proportion of characteristic APIs, mainly high-end antibiotics and high-end pet drugs, has gradually increased to more than 50%, and the overall profitability of the sector has continued to increase.
In terms of production, in addition to meeting GMP standards, the company's production line is also actively promoting international registration certification. As of June 30, 2022, APIs have passed international certification for on-site inspection of 17 varieties, obtained 49 international certification certificates within the validity period (including 9 FDA on-site inspection varieties and 14 CEP certificate varieties), and obtained 2 qualification certificates.
At present, the company's sales in overseas markets account for about 50%, and the overall revenue of the overseas market driven by overseas market sales in overseas markets has achieved steady growth.
3.3.V-01 The new crown vaccine was approved for emergency use and successfully entered the vaccine industry
The recombinant novel coronavirus fusion protein vaccine (Likang V-01), jointly developed by Lizhu Izumab, a subsidiary of Lizhu Group, and the Institute of Biophysics of the Chinese Academy of Sciences, was approved for sequential booster immunization emergency use in September 2022, and has been vaccinated in many provinces and cities across the country. The Likang V-01 lasted more than 2 years from the inception of the project in July 2020 to the approval of emergency use in September 2022.
From a structural point of view, Likang V-01 molecule is composed of four parts: interferon, Pan epitope, RBD dimer and Fc fusion protein. Due to the fusion of human interferon as a biological adjuvant in the antigen structure, it can significantly enhance the level of viral neutralizing antibodies and generate an effective cellular response.
The phase II clinical trial data of V-01 two-dose vaccination was published in the Chinese Medical Journal in July 2021, and the trial results showed that the vaccine had excellent immunogenicity and safety, especially in the elderly group, the overall incidence of vaccine-related adverse events was lower than that in the corresponding adult group.
V-01 was first approved by the Pakistan Medicines Authority in October 2021 for sequential augmentation regimens, followed by clinical trial approval for sequential augmentation regimens in Malaysia.
V-01 Sequential booster phase III clinical trials were conducted in Pakistan and Malaysia, and it is planned to inject V-01 booster dose or no placebo 1:1 in a total of 10,722 healthy adults aged 18 years and older who have completed 2 doses of inactivated vaccination for 3~6 months.
The results of interim data analysis showed that compared with the two-shot inactivated vaccine, the annual incidence rates of V-01 sequential booster group and two-shot inactivated vaccine group were 6.73% and 12.80%, respectively, which had significant differences (P=0.0012). The absolute protection of V-01 sequential reinforcement is 61.35%, which has significant strong efficacy, and the absolute protection power of V-01 sequential reinforcement has met WHO standards.
During the company's overseas phase III clinical trial, the Omicron variant began to circulate, and as of the critical data analysis date, 60 of the new coronavirus genotyping generation sequencing in all valid specimens sent for testing in this trial were Omicron, indicating that V01 sequential strengthening can produce good protection against COVID-19 caused by Omicron infection.
In terms of production and storage, V-01 production does not require a P3 workshop, and a GMP workshop can meet the requirements; At the same time, V01 can be transported in the cold chain and long-term storage at 2-8°C, with strong stability and convenient storage and transportation.
In terms of production capacity, the company's production capacity of raw solution reached 3.5 billion doses, and the production capacity of preparations reached 1.5 billion doses, which can achieve continuous and stable supply. At present, a total of 13 new crown vaccines have been approved for marketing/emergency use in mainland China. The mainland began the vaccination of the first booster dose in the fourth quarter of 2021.
In December 2022, the Joint Prevention and Control Mechanism of the State Council issued the Implementation Plan for the Second Booster Immunization of the New Coronavirus Vaccine, which proposes that the second booster immunization can be carried out in high-risk infected groups, elderly people over 60 years old, people with more serious underlying diseases and immunocompromised people in the emergence stage.
The protocol mentions prioritizing sequential booster immunization, or a second booster dose with vaccines containing or with good cross-immunization against the Omicron strain, and listing 9 vaccination combinations, of which 3 doses of inactivated vaccine + 1 dose of Zhuhai Lizhu recombinant new coronavirus fusion protein (CHO cell) vaccine are listed.
Booster vaccination is divided into homologous booster and heterologous booster (sequential booster).
Sequential booster immunization has two advantages: first, different vaccines can complement each other; Second, due to the different personal constitution, there may be people who have heavier side reactions to a certain vaccine, and the occurrence of side reactions can be reduced through vaccine transformation.
Xia Gang, director of the Department of Health and Immunization of the National Disease Control and Prevention Administration, introduced that as of November 28, 2022, a total of 3,443.451 million doses of new coronavirus vaccines have been reported nationwide, with a total number of 1,346.631 million vaccinated, 1,272.83 million people who have been fully vaccinated, covering 92.54% and 90.28% of the total population respectively, and 811.176 million people have completed booster immunization, including 47.227 million people who have completed sequential booster immunization.
The number of people over 60 years old vaccinated was 239.4 million, and 228.165 million people were fully vaccinated, accounting for 90.68% and 86.42% of the elderly population respectively, and 181.511 million people completed booster immunization.
Based on the above data, as of November 28, the number of people who have not been vaccinated with the first booster dose in the mainland is about 462 million; The number of older people over 60 years of age who have completed their first booster dose is 182 million, and this group is expected to receive the second booster dose in the next six months; This adds up to 644 million people who could receive a booster dose at this stage (first booster dose + second booster dose for older adults).
Based on the 644 million people who can currently receive booster vaccination, if calculated according to the penetration rate of 60% of booster shots and 10% of V-01 use, when the net profit of a single vaccine is 3 yuan, 5 yuan and 8 yuan, the net profit of booster shots is expected to contribute 116 million, 193 million yuan and 309 million yuan, respectively.
At present, the second booster dose is mainly for the elderly and high-risk groups, with reference to the vaccination experience of new crown vaccines in overseas countries, the second booster dose is expected to gradually be available to all groups, and will be further expanded on the basis of the current 644 million people after opening to all groups.
In addition to V-01, the subsidiary Lizizumab relies on the mature recombinant fusion protein vaccine research and development technology platform, and has laid out a variety of variant vaccines including Beta, Delta, Omicron and related bivalent vaccines, and is simultaneously carrying out relevant preclinical research and clinical application work.
In terms of overseas markets, the company has submitted overseas registration applications in Uzbekistan, Tajikistan and Nigeria. Through the experience in the development, production and registration of the new crown vaccine, the company has not only made important contributions to the global fight against the epidemic, but also accumulated rich overseas clinical experience. Lizizumab successfully entered the vaccine field through the R&D and marketing of V-01, laying a good foundation and reputation for the company's long-term development in the vaccine field in the future.
4. Continue to invest in R&D to create two characteristic platforms of microspheres and biological drugs
The company has continued to increase R&D investment over the years, and R&D expenditure has increased from 576 million yuan in 2017 to 1.523 billion yuan in 2021, accounting for 6.75% to 12.63% of the company's total operating income, of which the expense ratio has remained above 75%.
From the perspective of R&D personnel, the number of R&D personnel in the company increased from 586 in 2017 to 936 in 2021, and the proportion of R&D personnel increased from 8.42% to 10.91%.
In terms of R&D platform, the company has 3 national R&D platforms and 8 provincial R&D platforms. With the two characteristic technology platforms of slow-release microspheres and biological drugs as the main R&D platform, the company develops in the direction of innovative drugs and high-barrier complex preparations, and constantly enriches the product pipeline and enhances its core competitiveness.
4.1. The slow-release microsphere platform has a good first-mover advantage
Pharmaceutically defined as microspheres or sphere-like spheres formed by drugs dissolved or dispersed in polymer materials, typically between 1-300 μm in size.
Drug beads have the slow-release properties of drug release, and can be targeted to specific tissues and organs by changing the properties of microspheres, with long-acting, safe, targeted, improved bioavailability and other advantages, the longest microsphere preparation has reached every 6 months of administration.
Microspheres have high technical barriers, long R&D costs, long cycles, especially in production, the main difficulties include the following:
First, the encapsulation rate of particles is not high, and the particle size is different;
Second, the cost of sterilization is high and difficult, and it is necessary to adopt the whole process of aseptic operation, which is difficult to ensure the stability and reliability of product quality;
Third, industrialization is difficult, microsphere preparations are difficult to linear scale-up production, need to explore suitable parameters, so the technical requirements are high, and the microsphere preparation technology applicable to different drugs is different.
According to IQVIA and Flint creation data, the global microsphere preparation market size increased from $7.226 billion to $7.856 billion from 2017 to 2019, with a compound growth rate of about 4.27% during the period.
According to data from Toubao Research Institute, according to sales statistics, the market size of China's microsphere preparation industry increased from 2.23 billion yuan to 4.74 billion yuan from 2015 to 2019, with a compound annual growth rate of 20.8%, higher than the global market.
China's microsphere industry started relatively late, in 2000 Japan Takeda's bright prorelin microspheres first entered the Chinese market, there are currently a total of 9 microsphere products on the market, domestic entrants are few.
In January 2013, Lizhu Group officially introduced the microsphere project platform and established the microsphere room of the Institute of Chemical Medicine.
In March 2015, the company won the title of "National and Local Joint Engineering Research Center for Long-term Microsphere Technology". Lizhu Microsphere Technology Co., Ltd., a holding subsidiary, was established in July 2017 and is one of the earliest enterprises in China to develop microsphere products.
The company's microsphere platform has been listed as bright prorelin microspheres (1 month), which is one of the earliest micro-release ball preparation products in China; Among the product candidates, triptorelin microspheres (1 month) have been reported, and octreotide microspheres (1 month) and leuprorelin microspheres (3 months) have begun BE pre-trials.
The company has a good first-mover advantage in the field of microsphere technology and has built a rich product echelon. In addition to microsphere sustained release technology, the company is also actively expanding in the field of liquid crystal technology, nano preparations and other long-acting preparations to continuously consolidate its core competitiveness in the field of long-term sustained release technology.
Octreotide is a homolog of natural somatostatin and has the pharmacological activity of natural somatostatin, including inhibition of growth hormone function, inhibition of gastric acid, pancreatic enzymes, glucagon and insulin secretion, reduction of visceral blood flow, reduction of gastrointestinal motility, etc.
Octreotide injection is divided into short-acting ordinary dosage form and long-acting microsphere dosage form, among which long-acting microsphere dosage form can significantly extend the drug action time and improve patient compliance for patients with chronic diseases such as acromegaly, who need long-term administration.
In 1998, Novartis introduced octreotide acetate microspheres for injection, extending the dosing cycle to 4 weeks; The product entered the Chinese market in 2003 and currently monopolizes the domestic octreotide microsphere market, and no other imitation products are on the market.
From the indications, octreotide microspheres are used for the treatment of branch hypertrophy, which is abnormal hypertrophy of body size and internal organs caused by excessive secretion of growth hormone by the pituitary gland, accompanied by endocrine and metabolic diseases with abnormal physiological functions. Acromegaly is a rare condition with insidious onset and often delayed diagnosis, with a prevalence of approximately 40 to 125 cases per million people, with an annual incidence of 3 to 4 cases per million people. Surgery is the first-line treatment for acromegaly, and pharmacologic therapy is recommended for patients with acromegaly who do not resolve or are not surgical candidates after adenoma resection. Pharmacologic options include SRLs (e.g., octreotide, lanreotide, and pasireotide), dopamine receptor agonists (e.g., cabergoline), and GH antagonists (e.g., pevisomione).
From the sales data of domestic sample hospitals, octreotide microspheres achieved rapid growth after being included in medical insurance in 2018, and as the main drug for patients with acromegaly, the market demand remained good.
From the current product under development, Qilu Pharmaceutical's generic products are in the production stage, and the progress is the fastest; The second is Lizhu's imitation product, which has been pre-tested with BE. After octreotide microspheres entered the medical insurance catalog in 2018, the price was about 7911 yuan / bottle (30mg) and 5800 yuan / bottle (20mg), and the patient burden was heavier. Compared with imported products, domestic imitation products are expected to have certain advantages in price after they are marketed, reducing the drug burden of patients.
Overall, the product has maintained a good growth trend and a good competitive landscape, and Lizhu's octreotide microspheres are expected to achieve rapid volume after they are launched.
4.2. The products under development of the biopharmaceutical platform will gradually enter the harvest period
Lizhu Biotech is the main platform responsible for the research and development of biological drugs under the company group, and its main business is independent innovation research and development and industrialization of biological drugs, including innovative monoclonal antibodies, monoclonal antibody analogues, bispecific antibodies, antibody conjugate drugs, CAR-T cell therapy, etc., and its products cover tumors, autoimmune diseases and other fields.
With a construction area of nearly 20,000 square meters, Lizhu Biotech has established a technology platform integrating antibody humanization, cell line screening, large-scale cell culture, purification, preparation, analysis and testing and quality control, with two GE 200L, one 500L and one 2000L disposable reactor, as well as one 500L and one 1500L stainless steel reactor from ABEC, fully equipped with the conditions for the research and development and industrialization of antibody drugs.
The recombinant human chorionic gonadotropin under the company's biopharmaceutical platform has been approved for marketing in 2021, the new crown vaccine V-01 has been approved for emergency sequential intensive use, tocilizumab has been in the production stage, and another 4 monoclonal antibody products are in the clinical stage. In addition, Lizhu Biotech also conducts research and development exploration in the fields of bispecific antibodies and cell therapy.
Tocilizu antigen research product Yamero was launched in China in 2013 and was approved for adult rheumatoid arthritis, systemic juvenile idiopathic arthritis and cytokine release syndrome.
After the product was included in the 2019 medical insurance catalogue through national medical insurance negotiations, it achieved rapid volume, and the sales of sample hospitals exceeded 70 million in 2021. In November 2021, Lizhu's tocilizumab filed a marketing application, becoming the second product to submit a marketing application after Bio-Thera.
5. Summary of the report
We predict that the company's net profit attributable to the parent company in 2022-2024 will be 1.820 billion yuan, 2.143 billion yuan and 2.425 billion yuan, corresponding to EPS of 1.95, 2.29 and 2.59, respectively, and the current stock price corresponding to PE of 17.9/15.2/13.4 times respectively.
6. Risk Warning
Drug price reduction risk: Industry policies such as drug volume procurement may have an impact on the terminal price of drugs, which in turn will affect the company's product sales revenue.
Risk that the R&D progress is not as expected: The company has a number of products under development, and the drug development cycle is long, difficult, and has uncertainty risks.
Risk of disruption: The current coronavirus situation remains uncertain, which may affect the sales and promotion of the company's medicines.
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