The 2019 annual board of directors management review of Weixinkang (603676) is as follows:
First, the business situation is discussed and analyzed
Pharmaceutical industry is an important part of China's national economy, in 2019, with the consistency evaluation of generic drugs, national medical insurance negotiations, "4 + 7" with volume procurement expansion, the new version of the "Drug Administration Law", the new version of the medical insurance catalog, the drug marketing authorization holder system and other policy rules continue to advance, the traditional pattern of the pharmaceutical industry is being broken, the competition of domestic pharmaceutical companies is intensifying, the concentration of the industry has been greatly improved, and the high-quality generic drugs with high difficulty and high technical barriers will stand out, with the gradual development and improvement of the medical security system The overall operation of China's pharmaceutical industry has further shown a sustained and good development trend.
During the reporting period, the company's board of directors and management actively responded to market and industry changes, focused on and focused on the opportunities for transformation and upgrading of the pharmaceutical industry, and continued to optimize the construction of R&D, production and marketing systems on the basis of steady operation and development, focusing on advantageous varieties and improving management
Operate and comprehensively improve the refined management capabilities of various business areas of the company.
In 2019, the company's operating conditions were relatively stable, achieving operating income of 740.9632 million yuan, down 0.72% year-on-year, and net profit attributable to shareholders of listed companies of 55.6778 million yuan, down 24.18% year-on-year. The company's business priorities in 2019 are mainly implemented in research and development, production and marketing network construction:
1. Research and development
The company conforms to the general trend of national medical reform, seizes the opportunity of consistency evaluation of generic drugs, grabs the advantages of imitating difficult products and leading listings, while adhering to the innovation-driven strategy, optimizing product layout and structure, continuously accelerating the research and development of reserve products and listing declaration progress, and continuous development
New products with independent intellectual property rights. During the reporting period, 1 key product of the company obtained drug registration approval and new drug certificate, 3 key products obtained drug registration approval, and 5 key products have started consistency evaluation. As of the report disclosure date, 8 raw material varieties have passed the review, and the registration status is A; a variety of trace element injections have obtained drug registration approvals.
As of the date of disclosure of the report, the progress of key research projects is as follows:
(Note: A refers to raw materials/excipients/packaging materials that have been approved for use in marketed preparations.) ）
In March 2020, the company's various trace element injections obtained drug registration approvals and were included in the 2019 version of the National Medical Insurance Drug Catalog (Class B). A variety of trace element injections are trace element supplements containing 10 trace elements and are suitable for adult patients who require parenteral nutrition. A variety of trace element injection original research products for the French LABELATOIREAGUETTANT company DECAN, after inquiry, the domestic approved manufacturers of a variety of trace elements injection is only the French LABELATOIREAGUETTANT company. After searching, the company's products are currently the first imitation in China, as of the disclosure date of this report, no other manufacturers in China have made a variety of trace element injection declarations. According to the statistics of the intranet, in 2018, the sales amount of a variety of trace element injections in the three major terminal public medical institutions in China's cities, counties, communities and townships was about 232 million yuan.
2. Production
The company always adheres to the implementation of total quality management, attaches great importance to product quality, adheres to the principle of lean production and refined management, grasps the quality of drugs from the research and development stage, strictly controls procurement, production, inspection, warehousing, logistics and other links, strengthens process control, and continues to push
Enter GMP normalization management. During the reporting period, the company's potassium and magnesium aspartate injection (specification: 10ml/stick, 20ml/stick) and 4 key raw materials gluconolactone, cobalt gluconate, copper gluconate, and manganese gluconate passed the on-site inspection of drug registration and production organized by the State Food and Drug Administration; inhalation preparations, APIs (potassium aspartate, magnesium aspartate) and lyophilized powder injections, and small-volume injections (non-final sterilization) passed the drug GMP certification, providing sufficient guarantee for the quality and production capacity of the company's approved new products The quality management system was officially introduced into the LIMS system and entered the PQ (Performance Confirmation) stage to escort the implementation of total quality management.
3. Marketing
The company continues to strengthen the construction of the marketing team, actively promote precision marketing, strengthen the level of professional academic promotion, through the integration of market advantage resources, accelerate the national market layout, continue to comprehensively improve the fine management of various business areas, and increase the market promotion and sales force of key products
degree. The company actively participates in the bidding and procurement of drugs, continues to do a good job in sales access, and promotes the multivitamin (12) and door for injection
Bidding for products such as potassium aspartate injection, acetylcysteine solution for inhalation, and pediatric multivitamin injection (13). The company has participated in national academic conferences, national industry forums, provincial academic conferences, etc. for many times, and carried out multi-dimensional marketing promotion work to further enhance the popularity of brands and products. The company pays attention to the combination of strategic orientation and market demand orientation, actively carries out the preparation for the market of approved new drugs, continues to deepen the professional academic promotion of core old products, and prepares for the launch of new products.
Second, the main business situation during the reporting period
During the reporting period, the company achieved operating income of 740.9632 million yuan, down 0.72% from the previous year, and net profit attributable to shareholders of listed companies was 55.6778 million yuan, down 24.18% from the same period of the previous year. The main reasons are shown in "Section II, VII, (II) Description of the Company's main accounting data and financial indicators for the past three years at the end of the reporting period".
Third, the company's future development discussion and analysis
(1) Industry pattern and trend
See this section "Industry Basics" for details.
(2) Company development strategy
The company adheres to the clinical demand-oriented, based on R & D innovation, adheres to the combination of imitation and innovation, takes the research and development of safe, efficient and quality controllable drugs as its mission, and constantly develops new products with independent intellectual property rights. On the basis of R & D and variety advantages, strengthen independent production, improve the control of sales channels, and consolidate the advantages of marketing network.
In line with the national policy and industry development direction, the company will be based on the current R & D technology advantages, strengthen the competitive advantage, further improve the company's innovation ability and technical level, to the direction of chronic diseases and pediatric drugs, and strive to provide more innovative and accessible treatment programs.
(3) Business plan
The company mainly works in the following areas:
In terms of R&D and product line, the company will further enhance its independent innovation and research and development capabilities, strengthen technology accumulation, and continuously enhance the core competitiveness and market share of products. The company continues to deepen the market position of intravenous vitamin supplements, intravenous electrolyte supplements, intravenous iron supplements and related fields, and accelerate the market layout of newly approved products. Specifically, it includes: further enriching the product line in the areas of multivitamins, electrolytes, trace elements and other advantageous segments, developing preparations for liver disease patients, kidney disease patients, respiratory disease patients, cardiovascular disease patients, children and other subdivisions, and expanding to amino acids and other fields to achieve full coverage of related fields.
The pharmaceutical industry is a highly internationalized industry. In 2020, the company will actively explore cooperation models with foreign scientific research institutions, effectively guide the focus and direction of future development of research and development, accelerate the process of new drug research and development, the competitiveness of generic drugs and the overall internationalization of research and development, and enhance the company's brand value.
In terms of production, with the development of its subsidiary Baiyi Pharmaceutical, more products will be independently approved and produced in the future. Different from the beginning of the establishment of the company, the existing policy environment to encourage R&D and innovation provides more ways for the company to adopt a diversified production model: 1. Baiyi Pharmaceutical, a subsidiary with a GMP certification production line, self-declared and obtained a drug approval number; 2, the new "Drug Administration Law" has been promulgated and implemented, and the relevant business entities of the company can independently submit drug listing applications as drug marketing authorization holders, and entrust them to other production enterprises; 3, Within the framework of the agreement, the partner party entrusts the cooperative product to Baiyi Pharmaceutical for production.
At the same time, in addition to relying on endogenous growth, the company can rely on the power of the capital market and the platform advantages of listed companies, combined with the existing experience in foreign investment, in the future, on the basis of prudent selection of targets, actively carry out mergers and acquisitions through refinancing of listed companies, etc., to promote the company's continued steady development.
(4) Risks that may be faced
1. Policy risks
Pharmaceutical industry is one of the key development industries in China, pharmaceutical products are related to people's life and health safety of special commodities; at the same time, the pharmaceutical industry is a high degree of supervision of the industry, its regulatory departments include the state and local drug regulatory departments at all levels and health departments, within the scope of their respective authority, the formulation of relevant policies and regulations, the implementation of supervision of the entire industry. Provincial drug bidding takes price reduction as the leading idea, the policy of secondary price negotiation and minimum price linkage is frequent, and the "4 + 7" drug centralized procurement pilot program has been implemented. The introduction of relevant reform measures and the continuous improvement of policies may promote the orderly and healthy development of the pharmaceutical industry at the same time, which may cause great changes in the operation mode of the industry and have a certain impact on enterprises.
The company will pay close attention to the changes in industry policies, strengthen the understanding of industry policies and relevant implementation rules, combine the company's product advantages, and adjust the business strategy in a timely manner.
2. The risk of the leading product being further imitated
Based on its own R & D strength and clinical needs, the company has selected a large market space, high technical threshold varieties to carry out research and development, the leading products that have been put on the market include a variety of vitamins for injection (12), potassium magnesium aspartate for injection, iron sucrose injection, potassium aspartate injection, etc. At present, these products may be further imitated by other pharmaceutical companies. If other pharmaceutical companies successfully imitate and put them on the market, it may lead to a decline in the market share of the company's dominant products, which will affect the company's operating performance.
The company will continue to do a good job in the market promotion of products, while accelerating the development of leading product substitution or upgrading products, continuously expanding product lines, and enhancing product market competitiveness.
3. Risks of business cooperation
In order to make full use of the abundant GMP production capacity of China's pharmaceutical industry and improve the efficiency of existing resource utilization, the company has adopted the mode of business cooperation of some products on the basis of R & D technology advantages and sales advantages, that is, through technology output and market brand management, the partner production enterprises apply for product production approval and production, and the company is responsible for the exclusive distribution of cooperative products nationwide. The company has patents/technologies, trademarks/brands, etc. of cooperative products, and undertakes market organization management and promotion work, including providing market strategy, market access (including price filing, bidding and bidding, etc.), academic, product promotion and customer development, tracking, maintenance, etc.
The cooperation model enhances the profitability of the company and its partners, and also brings the commercial risk of partners violating the cooperation agreement. In the agreement, the company has protected its own interests through intellectual property protection clauses and breach of contract liability clauses, but it still cannot fundamentally exclude the possibility of the other party's breach. Once the partner defaults, it will affect the market supply of the company's leading products, which in turn will affect the company's operating performance.
The company will continue to maintain good communication and cooperation with partners, pay close attention to major business changes of partners, and expand the sales scale and competitiveness of its own production products to reduce the risks brought to the company by cooperative changes.
4. Market risk of drug price adjustment
Since 1998, the National Development and Reform Commission has repeatedly reduced prices in the pharmaceutical market, and in recent years, the National Health and Family Planning Commission and other regulatory departments have successively issued various notices to control the proportion of drugs and control the growth of medical expenses. As the competent departments of the industry continue to improve and improve the drug price system, improve the medical insurance system, the centralized drug procurement bidding system, the secondary bargaining system, and further strengthen the implementation of medical insurance control fees, the company's product sales price will face the risk of downward adjustment in a long period, which will adversely affect the company's profitability.
The company will pay attention to the adjustment expectations of price decline in a timely manner, develop the unreported middle and lower-level markets, optimize terminal distribution channels, expand sales scale, and strive to reduce the impact of price reductions on the company's profitability.
5. Drug quality and safety risks
As a special commodity, the quality of the drug itself is directly related to the life and health of the user. The drug process is complex, and the particularity of production, circulation and other links makes its quality affected by many factors. If there is an omission in the process of raw material procurement, product production, storage, transportation and use, the quality of the product may change. If the quality problems of the company's own production or cooperative products occur in the future, it will adversely affect the company's brand and operation, and then affect the company's operating performance.
The company attaches great importance to product quality, in strict accordance with the new version of GMP, GSP requirements to standardize the production and sales management system, strengthen supplier management, continuously improve the management level, ensure product safety, reduce the risk of product quality.
6. R&D risks
The company has more products in research, drug research and development has the characteristics of high input, high risk, high added value and long cycle, drug research and development from the early project screening, product development, quality control, drug registration, clinical research and so on to the approval of the production of the cycle is long, many links, easy to be affected by uncertainty factors, whether there are good market prospects and economic returns after the product is also uncertain.
The company will actively standardize the R&D workflow, establish an effective risk assessment and prevention and control mechanism, improve the organizational structure and project incentive system, and strive to control the risk of product research and development.
7. Risks faced by other factors
After January 2020, affected by the outbreak of the new crown pneumonia epidemic, medical institutions at all levels concentrated their resources to fight the epidemic, normal medical activities were affected to a certain extent, and the company's production and operation, material procurement, market sales, and drug circulation were all restricted to a certain extent. At the same time, with the development of social economy, the quality requirements of drugs are increasing, the input of production quality assurance, market sales channels and other aspects has led to an increase in enterprise costs, and the price of raw and auxiliary materials, energy, power and other prices and labor costs have risen, which will bring about the risk of declining product profitability.
Under the new business situation, under the premise of ensuring the safety and health of employees, the company actively and orderly resumed various production and operation work, actively responded to the market while supporting the national anti-epidemic work, effectively reduced operational risks, and ensured the sustained, healthy and high-quality development of enterprises.
Fourth, the core competitiveness analysis during the reporting period
Adhering to the corporate mission of "caring for life and maintaining health", Weixinkang is guided by clinical needs, based on R&D innovation, adheres to the combination of imitation and innovation, and takes the research and development, production and sales of chemical preparations and their APIs as its main business, and has core competitiveness in the following aspects:
1. R&D advantages
The company's R&D center covers chemical synthesis, pharmaceutical preparations, drug analysis and other links, and forms three core technology platforms such as "new injection process technology platform", "large compound preparation technology platform" and "new freeze-drying technology platform", which have obvious advantages in the fields of intravenous vitamin supplements, intravenous iron supplements, intravenous potassium and magnesium supplements.
The company has accumulated 14 invention patents, 17 new drug certificates, and has more than 30 new product projects under development. During the reporting period, the company obtained 1 key product approval for drug registration and new drug certificate, and 3 key products obtained drug registration approval, of which compound electrolyte injection (V) obtained drug registration approval and new drug certificate in April 2019, which is the only variety in China; acetylcysteine solution for inhalation and potassium magnesium aspartate injection were approved for drug registration in May 2019 and December 2019, respectively, and were included in the 2019 National Medical Insurance Catalogue (Class B). As of the disclosure date of the report, 8 raw material varieties have passed the review and registration status is A; a variety of trace element injections have obtained drug registration approval in March 2020 and have been included in the 2019 National Medical Insurance Catalogue (Class B).
2. Product advantages
Based on its own R & D strength and clinical needs, the company has selected varieties with large market space, high technical threshold and small competition to carry out research and development, and the core products have fewer competitors and are in the leading position in the market segment. Most of the products developed by the company are to fill the gap or competitors in the domestic market
Less varieties, strong market competitiveness, through years of continuous research and development and innovation, the company has now formed a product structure of excellent, with market prospects
product gradient. Among them, the multivitamin (12) for injection is the exclusive variety in China, and the 3.2 new drugs approved in 2019 are compound electrolyte injection (V) and the 3.1 new drugs approved in 2018, and the multivitamins (13) for pediatric injection are the first imitation and exclusive production varieties in China, and the APIs of many major products are the original 3 new drugs.
3. Marketing advantages
The company's product market competitive advantage is obvious, so that the company is in a relatively active position in the process of marketing network construction and regional distributors and promotion service providers. The company's marketing and promotion service network construction adopts the "strategic cooperation, benefit sharing" model, that is, through professionalism
The database of drug distributors and promotion service providers selects doctors with strong regional market sales capabilities, wide regional hospital network coverage, and professional promotion services
Pharmaceutical sales companies and promotion service companies act as regional distributors and promotion service providers. Regional distributors and extension service providers are only responsible for company specifics
Varieties of sales and promotion services in specific areas can give full play to their professional segmentation advantages. The company's marketing team does not depend on the product
With the same characteristics, provide sales and promotion service guidance and planning for regional distributors and promotion service providers, and jointly complete the market expansion work, so as to
Effectively implement and execute the company's marketing strategy. Through the sharing of regional distributors, promotion service providers of sales network resources, marketing and pushing
Wide service team, the company's sales network has now covered the country's major provinces and cities.
The company has established a sound sales system, market management and promotion service support system, and has accumulated strong advantages in channels, services and brands. With the adjustment of national policies, the company has strengthened academic promotion, held key product promotion meetings, and other authoritative machines
The company cooperates in holding professional forums and other ways to promote the company's new products and create a good market environment for the launch of new products.