Innovative pharmaceutical companies have always been the stars of the pharmaceutical sector, but the market expectations for innovative pharmaceutical companies are also very high, such enterprises not only have good performance, but also continue to make new progress in the research of products. Therefore, innovative pharmaceutical companies such as Sihuan Pharmaceuticals, which have a good performance and an endless stream of newly approved products, are the objects that investors should focus on.
In terms of performance, since Letibao was officially listed in February this year, the medical and beauty business in Sihuan has expanded rapidly, with revenue growth of 771.3% in the first half, total revenue growth of 85%, and net profit growth of 308%.
In terms of new products, Sihuan Medicine has received a lot of good news recently. On November 25th, Sihuan Pharmaceutical announced that the State Drug Administration approved Xuanzhu Bio, a holding subsidiary of Sihuan Pharmaceuticals, to conduct phase III clinical trials with the combination of Pirozinib and aromatase inhibitors. As early as August this year, the combination of Pirozinib and flurvestron has been approved to carry out phase III clinical trials. On October 22nd, the State Drug Administration accepted the application for new drug marketing of Annalrazole Sodium enteric-coated tablets of Xuanzhu organism (NDA); on November 9th, the antithrombotic drug clopidogrel sulfate tablets (75mg) developed by Sihuan Pharmaceutical obtained the production approval issued by the State Drug Administration.
In addition, Xuanzhu Biology, a subsidiary, is expected to have two products approved to market by the end of 2022, among which, class 1.1 new drug SGLT2 inhibitors (gazepine) transferred to brother subsidiary Huisheng Biology are ready to declare NDA, and at least 5 products are in critical clinical or delivery stage, 2 products are in clinical phase II, and 7 products are in clinical phase I. In addition, the fourth-generation insulin analogue Degu insulin injection (basic long-acting insulin) developed by diabetes platform Huisheng biology is currently entering the clinical phase III; the third-generation asparagus insulin series, including asparagus insulin injection, asparagus insulin 30 injection and asparagus insulin 50 injection, are about to declare NDA.
The above situation shows that in recent years, Sihuan Pharmaceutical has adhered to the overall strategy of "innovation-driven to build China's leading medical, beauty and biopharmaceutical enterprises, and promoted the four-ring medical beauty and biopharmaceutical two-wheel drive strategy at full speed", and achieved remarkable results. with a series of blockbuster products approved for listing one after another, the company's performance has officially entered a rising period.
1. The strength of research and development is strong. Another indication of the class I innovative drug CDK4/6 inhibitor Pirozinib has been approved to carry out phase III clinical trials, and the progress of the product pipeline has been quickly followed up.
From the perspective of Pirozinib, which has been approved for phase III, it is a new structure of CDK4/6 inhibitor, which is expected to overcome the problem of endocrine resistance in patients with hormone receptor positive (HR+) breast cancer. At the same time, it is also observed that Pirozinib has obvious efficacy in patients with advanced breast cancer treated with multi-line therapy. The results of preclinical studies show that Pirozinib has unique pharmacokinetic characteristics and can effectively pass through the blood-brain barrier. It is expected to have a good effect on patients with brain metastasis of breast cancer and patients with brain cancer. In addition, due to the novel target mechanism of CDK4/6, Pirozinib can be combined with multiple target drugs, which has important clinical significance and broad market prospects.
In terms of market size, according to the latest data released by the International Agency for Cancer Research of the World Health Organization, the number of new cases of breast cancer reached 2.26 million in 2020, which is not only the highest incidence of malignant tumor in the world, but also the highest incidence of malignant tumor among women in the world. In 2020, there were about 420000 new cases of breast cancer and 120000 deaths in China, which is one of the most common causes of death of malignant tumors in women. HR+ breast cancer accounts for about 70% of all breast cancers, and the most closely watched drugs in this field are CDK4/6 inhibitors. In 2020, the annual sales of CDK4/6 listed products exceeded 7 billion US dollars, and the global market size is expected to exceed 15 billion US dollars in 2025.
As we all know, breast cancer is one of the highest incidence of malignant tumors in the world, and oncology is one of the key areas of four-ring medicine. This time, another indication of Pirosini has been approved for phase III clinical trials, which not only means that the company's oncology drug pipeline has once again promoted significant research and development progress. At the same time, with the company's leading edge in R & D and sales, as well as the synergy brought by long-term ploughing, the company's new drug will be more competitive in the market in the future. And this is bound to further step into the commercial development of Xuanzhu Biology, and have a direct positive stimulus to the future business performance of Sihuan Pharmaceutical Group.
2. The transformation of innovation has achieved remarkable results and accelerated into the harvest period.
In recent years, with the introduction of a series of important policies such as "two-vote system", "generic drug consistency evaluation" and "volume procurement", the industry has been driven towards innovation and development. In this context, Sihuan Pharmaceutical takes innovation as the lead, adheres to the core concept of innovation-driven, imitation and innovation, constantly enriches its high-quality self-developed product pipeline, and realizes the coverage of many major treatment fields. the company has achieved remarkable results in innovation and transformation.
From the point of view of the company's two major innovative R & D platforms, Xuanzhu Bio is one of the few platform innovative pharmaceutical companies with independent R & D capabilities in the field of small molecules and macromolecules at the same time. It currently has 25fc product pipeline under research, focusing on tumor, metabolism, infection, digestion and other fields, and on the breast cancer track, Xuanzhu Bio has laid out the main targets for breast cancer, and it is one of the most comprehensive companies in the layout of breast cancer races in China. Huisheng Biological is one of the few innovative pharmaceutical companies in China to achieve full product coverage in the field of diabetes and complications, covering more than 40 product lines of diabetes and its complications, covering a full range of new insulin, third-generation insulin, second-generation insulin, SGLT-2, GLP-1 and other products, among which the fourth generation Degu Insulin and Degu Mendong double Insulin are among the leading products in the country.
The company spared no effort in the field of innovation. In terms of R & D expenditure, the company's R & D expenditure reached 333 million yuan in the first half of 2021, an increase of 10.9% over the same period last year, of which investment in innovative drug research and development increased by 39.4%. In total, there are more than 600 R & D personnel, covering everything from drug research and development to new drug registration.
In recent years, the company's earlier drug R & D projects have also entered the harvest period, and approved products emerge one after another. On October 22nd, Sihuan Medicine issued an announcement that the State Drug Administration has accepted the application for listing of new drugs for Annalprazole sodium enteric-coated tablets (NDA). As the first new drug listing application submitted by Xuanzhu Biology, the acceptance of this application marks Xuanzhu Bio stepping into a new mileage from R & D to commercial development.
With the release of a series of blockbuster products, the company's performance has officially entered a rising period. In the first half of this year, Sihuan Pharmaceutical created a higher-than-expected return under the strong leadership of the two-wheel drive of "Medical Beauty + Medicine". In the first half of the year, the company achieved a total revenue of 1.907 billion yuan, an increase of 80.9% over the same period last year; a net profit of 611 million yuan, an increase of 2.58% over the same period last year; and a net interest rate of 31.2%, up from 16.0%
3. Conclusion
Since June this year, driven by pessimism such as pharmaceutical collection, the pharmaceutical sector has continued to decline, and the share price of Sihuan Pharmaceutical has failed to perform well. Recently, a new round of medical insurance negotiations has once again aroused market concern. According to the institutional point of view, the secondary market has fully reflected the expectations of collection and mining, and it is believed that the new round of collection will not have more impact on the share prices of the relevant companies. Recently, a large number of investors have poured into pharmaceutical-related funds, and institutions have made frequent moves to increase their positions in pharmaceutical stocks, which may mean that the market has ushered in an inflection point after short-term emotional catharsis, and high-quality pharmaceutical companies are expected to usher in a valuation repair market.
It is worth mentioning that Sihuan Pharmaceutical has launched a series of repurchase actions in the market since the beginning of this year. On November 10th, Sihuan Pharmaceutical again announced that it would buy back 11.5 million shares at a price of HK $1.47 to HK $1.52 per share, with a repurchase amount of HK $17.2845 million. This move sends a positive signal to the market and fully demonstrates the management's confidence in the company's future business prospects. According to statistics, Sihuan Pharmaceutical has carried out a total of 21 buybacks so far this year, repurchasing a total of 134 million shares, accounting for 1.42% of the total share capital, with a cumulative repurchase amount of HK $240 million.