According to Gronghui new shares, Beijing Contini Pharmaceutical Co., Ltd. (hereinafter referred to as "Contini Pharmaceutical") submitted its listing application to the Hong Kong Stock Exchange again on February 28th, with China International Capital Corporation as its exclusive sponsor. It is worth mentioning that this is the third time that the company has launched a sprint on Hong Kong stocks, having submitted listing applications on April 18, 2019 and November 1, 2019, both of which have been in a state of "invalidation".

Contini Pharmaceutical Co., Ltd. was founded in 2002 by Contini Pharmaceutical Factory and Cheng Youming. In 2006, after the Japanese company GNI invested, the company was restructured into a Sino-foreign joint venture. After 20 years of development, Contini Pharmaceutical Co., Ltd. has attracted many investment institutions, including Zhongguancun Development, Shanghai Ruixing Gene, Longpan Venture Capital and so on. Zhongguancun entered in 2013 and withdrew from capital reduction in 2017.

Before IPO, GNI held 55.97% of the shares through BJContinent; Saint Lili, Longpan Biopharmaceuticals and Longpan Venture Capital held 11.66%, 9.18% and 8.03% of the company respectively.

Single product dependence

Contini Pharmaceutical is a biomedical company specializing in the research, development and commercialization of innovative drugs for organ fibrosis. For a long time, the company has focused on idiopathic pulmonary fibrosis (IPF), and has gradually expanded its treatment and R & D activities to other organ fibrosis areas.

At present, there are 9 kinds of product pipelines of Contini Pharmaceutical Industry.Among them, the drug for IPF (pirfenidone capsule) was approved to market in China in 2011, and it is one of the first three drugs approved for the treatment of IPF in the world.

The so-called IPF is a chronic disease, which forms scar tissue in the lungs for unknown reasons, and the disease group is mainly the elderly. The average survival time of IPF patients is two to three years. Data show that the number of IPF cases in China has increased from 83000 in 2017 to 108400 in 2020, and is expected to increase to 332000 by 2031.而The market size of IPF therapeutic drugs in China is expected to reach 3.853 billion yuan in 2031.

As China's first approved drug for the treatment of IPFAisirui fills the gap of IPF therapeutic drugs in China.It has a certain first-mover advantage and was included in the national health insurance catalogue in 2017. Since Contini Pharmaceutical currently has only one Easri commercially available for IPF,The main source of the company's revenue comes from Esri.

From 2019 to 2020, the revenue of Contini Pharmaceutical increased from 325 million yuan to 447 million yuan, an increase of 37.5 percent over the same period last year, while the corresponding profit for the year rose from 70.12 million yuan to 128 million yuan, an increase of 82.4 percent over the same period last year. In 2021, Q3, the company's revenue and profits increased further, to 440 million yuan and 126 million yuan respectively.

Among them, the sales income of Q3 from 2019 to 2021 was 315 million yuan, 437 million yuan and 432 million yuan respectively.Accounted for about 96.8%, 97.7% and 98.2% of the total income for the year.It is worth pointing out,Avery's gross profit margin is quite high, which has been maintained at more than 96%.Driving up the company's overall gross profit margin, Q3 reached 95.5% in 2021.

At present, two IPF drugs, Pirfenidone and Nidanib, have been approved in China.The company's pirfenidone capsule AisiruiOccupy more than 90% of the domestic market shareIt is in a leading position, which is also one of the reasons for its high gross profit margin, but with the successive listing of the follow-up competitive products, the risk of market share and gross profit margin decline cannot be ruled out.

In addition, in the context of volume procurement by the stateThe possibility of Aisirui entering the scope of collection can not be ruled out.If Aistri's sales fall short of expectations or are included in the collection, it will adversely affect the operating performance of Contini Pharmaceutical to a certain extent.

The rate of sales expenses is over 40%.

In addition to the field of IPF drugs, liver fibrosis is also another focus area of Contini Pharmaceutical Co., Ltd., the key product in this field, F351 (hydroxynidone), is currently in phase III clinical trials. In addition, the company develops drugs for chronic obstructive pulmonary disease ("COPD"), pulmonary hypertension ("PAH") and acute chronic plus acute liver failure, while expanding Esri's indications to other areas of pulmonary fibrosis.

It can be seen that Contini Pharmaceutical Co., Ltd. is developing relatively many product pipelines. But it is worth mentioning that the company does not invest much in R & D in pharmaceutical companies every year. The company's R & D expenditure is 15.85 million yuan and 37.212 million yuan in 2019 and 2020.The corresponding R & D expenditure rates are 4.88% and 8.32%, respectively.

Contini, on the other hand, spends a lot of money on sales. The company's sales expenditure is 146 million yuan and 194 million yuan in 2019 and 2020.The corresponding sales expense rates are 45.05% and 43.41% respectively.According to the prospectus, the company's current sales network has covered 30 provinces, autonomous regions and direct sales cities, Q3 from 2019 to 2021, covering 1905, 2286 and 2429 hospitals and drugstores respectively.

For pharmaceutical companies, product pipeline R & D is their core competitiveness, and annual R & D investment is also the embodiment of drug innovation and R & D strength. At present, Contini Pharmaceutical Co., Ltd. has a low R & D expense rate and a high sales expense rate, which may have a certain impact on the competitiveness of its products for a long time.

Summary

The Matthew effect of "the strong is Hengqiang" is intensifying in the pharmaceutical industry, and pharmaceutical companies are paying more and more attention to R & D and innovation. although Contini Pharmaceutical already has a product supporting income, it is obviously not enough, not only the risk of single dependence, but also shows the lack of R & D innovation of the company to a certain extent. In the future, Contini Pharmaceutical still needs to strengthen product research and development.