Incident: The company announced that it received the “Notice of Acceptance” of the marketing application for adalimumab injection issued by the State Drug Administration. The acceptance number is CXSS1800025. Comment: Adalimumab: An all-human antibody, which guarantees efficacy and safety. Tumor necrosis factor alpha (TNF-α) is a cytokine with inflammatory effects produced during the body's immune response. TNF-α plays an important role in the pathogenesis of autoimmune diseases, and TNF-α expression levels in patients will increase. Adalimumab binds specifically to TNF-α, which causes an inflammatory response. By blocking it from binding to TNF-α receptors p55 and p75 on the cell surface, the effect of inhibiting TNF-α is achieved, and is used to treat various autoimmune and inflammatory diseases caused by excessive production of TNF-α. Currently, the main TNF-α inhibitors marketed globally are adalimumab, enacept, and infliximab. Among them, adalimumab is an all-human monoclonal antibody expressed by Chinese hamster ovary cells (CHO). Inflixime is a human-mouse chimeric monoclonal antibody, and etanercept is an Fc fragment of TNFR2 dimer plus IgG1. Compared with human-mouse chimeric antibodies and human-derived antibodies, the immunogenicity of all-human antibodies is greatly reduced, and efficacy and safety are more guaranteed. The number one in the world in sales for 6 consecutive years. Abbott, the king of pharmaceuticals, is Abbott. After Abbott's spin-off, it was first approved by the US FDA to treat moderate to severe rheumatoid arthritis in December 2002, approved by the European EMA in September 2003, and has now been approved for 10 indications including rheumatoid arthritis, mandatory spondylitis, and psoriasis. In 2012, adalimumab first ranked as the number one drug in the world with sales of 9.6 billion US dollars, then ranked number 1 for 6 consecutive years. In 2017, global sales of US$18.9 billion were the king of pharmaceuticals. Amgen's biosimilar Amjevita will be delayed until 2023 due to an agreement between AbbVie and Amgen, and Evaluetepharma predicts that adalimumab will remain the world's best-selling drug by 2024, with sales of $15.2 billion. Adalimumab analogs are expected to be marketed, promoting gradual entry into medical insurance. Market expansion is expected to be approved by the CFDA in 2010. Currently, the approved indications are rheumatoid arthritis, ankylosing spondylitis, and psoriasis. Clinical trials for Crohn's disease are ongoing. Due to the high price of adalimumab, the average winning bid price is 7600-7,800 yuan/bottle, with an annual cost of about 200,000 yuan, and only covered medical insurance for major diseases in Zhejiang Province, Qingdao, and Shenzhen. The lack of medical insurance coverage greatly reduced drug accessibility. In 2017, the sales of adalimumab sample hospitals were only about 18 million yuan, and the overall market size is estimated to be only about 100 million yuan. Based on the calculation that each patient uses it for 3 months per year, it only covers about 2,000 patients. Currently, the TNF-α inhibitors marketed domestically include infliximab, enacept, etanacept bioanalogs (exepr, ranc, ampanol), and golimumab. Among them, Exip, Ganke, and Ampanol have entered the national medical insurance catalogue and are expected to enter the rapid release period. Currently, the prevalence of rheumatoid arthritis and mandatory spondylitis in China is 0.42% and 0.3% respectively. The total number of patients is about 10 million, and the potential market space is huge. After domestically produced adalimumab antibiotics and similar drugs are marketed, the price is expected to drop significantly compared to the original research. It is expected that in the future they will enter national health insurance, greatly improving drug accessibility, and the Adalim biosimilar market will expand rapidly. Haizheng is leading in R&D progress. It has sales channels established by Ambainuo, and has a good competitive pattern. Haizheng Biopharmaceutical is the only domestic monoclonal antibody company that also has large-scale production capacity for monoclonal antibodies, has an existing product sales team, and has a product hierarchy. The vast majority of domestic monoclonal antibody companies have yet to sell products, nor do they have a sales team. Guangzhou Biotech submitted an application for the marketing of adalimumab to the CDE on August 23, 2018 (Biotech currently has no products on the market, has not proven the large-scale production capacity of monoclonal antibodies, and has no sales team). Although the company is the second company in China to declare production, there is not much time gap. Additionally, adalimumab from Cinda Biotech, Fuhong Hanlin, and Jiangsu Zhonghe Pharmaceutical (which has been absorbed and combined by Junshi Biotech) has also entered clinical phase III. Among them, Cinda Biotech's prospectus disclosure plan is to submit a listing application in the second half of 2020. Junshi Biotech's prospectus revealed that it has now completed the recruitment of subjects for phase III clinical trials and plans to submit an NDA in the second half of 2019. Compared to major competitors, the company is about 1-2 years ahead, and the competitive landscape will not deteriorate rapidly after listing, which will help maintain product profit margins. Among other manufacturers, rizumab has entered clinical phase II, while Tonghua Dongbao, Sansheng Pharmaceutical, and Hualan Biotech have entered clinical phase I. In addition, many other manufacturers are in the approved clinical or IND stage. There is a complete pipeline of rheumatology and immunology drugs. Adalimumab from the No. 1 domestic company was developed according to biosimilar guidelines. Based on completed comprehensive and comparable studies, including pharmacokinetics, pre-clinical, and clinical trials (pharmacokinetics, efficacy, safety, and immunogenicity comparison studies), they are all highly similar to the original drug Schumeil. Previously, the CFDA issued the “Technical Guidelines for the Development and Evaluation of Biosimilar Drugs (Trial)” in 2015, which proposed that “if clinical similarity is confirmed in comparison studies, consideration may be given to extrapolating to other indications of reference drugs.” The company's adalimumab meets the requirements of the review policy, so the application indications are ankylosing spondylitis, rheumatoid arthritis, and plaque psoriasis. The dosage form is an injection, and the specification is 0.8 ml: 40 mg, which is the same as the original study. The extrapolation of indications not only reduces clinical costs, but also shortens the clinical trial process. In terms of sales, Baiying Pharmaceutical, a wholly-owned subsidiary of the company, has continued to be deeply involved in the field of rheumatology immunity since its establishment. Through Abenuo's marketing and sales, it has successfully established sales channels, accumulated expert resources, and gradually established its brand position and influence in the field of rheumatology immunization. The company has a total of 6 drugs marketed or being developed for use in rheumatology immunology (ampanol, adalimumab, infliximab, tocilizumab, small-molecule drugs ginsenoside c-k, and tofatib, among which Ampanol has already been marketed). In the future, it will form a strong product group. The richness of products far exceeds competitors, and is expected to form an oligopoly position in the field of rheumatology immunology. Valuation and investment advice - the former king, an inflection point in history! The production of adalimumab shows the company's outstanding capabilities in clinical research and industrialization of biopharmaceuticals. The company currently has more than 10 biopharmaceuticals under development. Among them, infliximab, trastuzumab, insulin glargine, and insulin have all entered phase III clinical research and are about to enter the harvest period, and the potential of the company's biopharmaceutical sector is not fully recognized by the market. Both business and management are expected to usher in a historic inflection point: 1) After the entry of Gao Lin Capital, profits of Hanhui Pharmaceutical grew rapidly. 2018H1 increased by more than 40%. Revenue was basically not growing by more than 20% due to changes in the two-vote confirmation method. In the future, it will continue to grow through the introduction of varieties using the mature CSO model; 2) The value of the biopharmaceutical sector is seriously underestimated. Abainuo began to grow rapidly after the expansion of production, and production of adalimumab was reported; 3) Clinical data for phase III of the innovative chemical drug Hezemib is good; 4) the generic drug BE has a large quantity, no inventory, and large production capacity. Benefiting from the national collection policy, it is expected that fixed assets will be fully utilized; 5) Once the fixed increase is completed, management & incentives will usher in a historical inflection point. If the fixed increase is successfully completed, a reasonable market value of 25 to 30 billion yuan in 2019. Considering dark horse attributes, a 20% discount will be given based on the principle of prudence, a reasonable valuation of 20 billion yuan or more. Among them: 1) Hanhui Pharmaceutical: Expected net profit of 685/856 million yuan in 18/19, an increase of 39%/25%; Haizheng Pharmaceutical holds 51% of the shares, and net profit of 349/436 million yuan, based on 23 times PE, a corresponding valuation of 10 billion yuan; 2) Biopharmaceuticals: Refer to the valuation of similar companies such as Fuhong Hanlin and Cinda Biotech, the monoclonal antibody portion is valued at about 8 billion yuan; 3) Chemical drugs: existing varieties still have great potential for growth, and the innovative drug Haizemab III phase III Clinical data is good. Years of R&D investment have begun to show results. The product pipeline is good, with a valuation of 5 billion yuan; 4) APIs: net profit of 20 to 30 million yuan in 2017, gradually entering the recovery channel after the FDA ban was lifted, and EU certification is expected to pass again. Normal net profit of 300 million yuan or more before the FDA and EU ban is estimated at 3 billion yuan based on 10 times PE; 5) Pharmaceutical business: net profit of 31 million yuan in 2018, which is expected to continue to grow steadily, with a reasonable valuation of 500 million yuan. The company is expected to achieve net profit of 125 million yuan, 354 million yuan and 580 million yuan respectively in 18/19/20. First coverage, giving a “buy” rating. Risk warning: The fixed increase was not approved; management was not straightened; adalimumab was not approved or progress was slow; fixed assets depreciated too much.
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海正药业(600267)点评:阿达木单抗报生产获受理 生物药步入收获期
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