Source: Finance Association

Author: Zheng Yuanfang

China's innovative pharmaceutical companies have gradually upgraded their way to overseas.

$Jiangsu Hengrui Pharmaceuticals (600276.SH)$On October 30, it was announced that an agreement was reached with Merck Healthcare (Merck)Merck was granted a paid license to Merck for the SHR-A1904 project for the PARP1 small molecule inhibitor HRS-1167 tablets and antibody drug conjugate (ADC) injections. Merck will pay Hengrui an initial payment of 160 million euros and technology transfer fees of up to 40 million euros. In addition, there are also SHR-A1904 exercise payments, R&D milestone payments, sales milestones, sales commissions, etc.

Just a few days ago,$JUNSHI BIO (01877.HK)$It was announced that the biological product license application (BLA) for the anti-PD-1 monoclonal antibody drug “treprilizumab” has recently been approved by the US FDA and has becomeThe first and only drug approved for nasopharyngeal cancer treatment in the US, and the first innovative biopharmaceutical independently developed and produced in China with FDA approval for marketing.

$FOSUN PHARMA (02196.HK)$It was announced on October 27,Holding subsidiary$HENLIUS (02696.HK)$Signed a “License Agreement” with IntasIt grants the other party the right to exclusively develop and commercialize the Hans-like anti-PD-1 monoclonal antibody H drug developed by Fuhong Hanlin in Europe and India for various indications and specific dosage forms, including extensive small cell lung cancer.

$HANSOH PHARMA (03692.HK)$According to the October 20 announcement,The company's ADC products have reached a cooperation with GSK, granting the other party a global exclusive license to develop its own B7-H4 ADC drug, HS-20089 (excluding the mainland, Hong Kong, Macau and Taiwan regions). Hanson Pharmaceuticals will collect a down payment of $85 million and is expected to receive a milestone payment of $1,485 million.

According to incomplete statistics, since this year, China's domestically produced innovative drugs have been actively authorized and traded overseas.From the beginning of the year to October 16, a total of about 33 transactions occurred。 Anxin Securities expects that with the booming development of the domestic innovative drug industry, the popularity of overseas licensing transactions will continue to be maintained in the future, and the foundation for the internationalization of innovative drugs will continue to be consolidated.

Also, according to the FDA review period,$HUTCHMED (00013.HK)$misogatinib third-line colorectal cancer,$BEIGENE (06160.HK)$Trelizumab, second-line indications for esophageal cancer, etc. are expected to obtain final evaluation results by the end of 2023, and the overseas marketing of innovative domestic drugs is about to enter a new stage.

Huaxin Securities stated on October 29th thatA breakthrough has been made in the way innovative drugs go overseasIt is expected that in the future, innovative drugs, bioanalogues, etc. approved by the FDA will continue to increase, the value of Chinese pharmaceutical innovation will increase, and the dividends of the development of the global pharmaceutical market will be shared.Innovating the export regulation market is an important breakthrough for the Chinese pharmaceutical industry to seek market growth, reduce internal competition that simply relies on the domestic primary market, and enhance the value space for innovation.

Now that internationalization has become one of the highlights of the innovative pharmaceutical industry, Shanghai Securities believes that potential pipelines and commercialization capabilities are the key for innovative pharmaceutical companies to stand out. Implementing the innovative pharmaceutical industry chain, analysts recommend focusing on: Hengrui Pharmaceutical, BeiGene, Alice, Connaught, Rongchang Biotech, Maiwei, Biotech, etc.

Looking at the overall industry, Huajin Securities added on October 30,The policy encourages real innovation. It is expected that future health insurance negotiations and pricing will tend to be moderate, domestic pharmaceutical companies' innovative research and development will gradually enter the harvest period, and innovative varieties will also be recognized by overseas pharmaceutical companies. It is necessary to track the clinical data of relevant companies and pay attention to the release of potential varieties。 It is recommended to pay attention to the following potential tracks:

1) Oncology field: In terms of mechanism of action, ADC has clinical advantages over monotherapy, antibodies, chemotherapy, etc. It is recommended to focus on the layout of next-generation ADC technology platforms, the progress of ADC development, and advanced commercialization of innovative pharmaceutical companies, such as$REMEGEN (09995.HK)$, Colombo Thai, Maiwei Biotech, etc.

2) Metabolism field: In addition to diabetes and weight loss, GLP-1 targets have shown excellent efficacy in indications such as NASH, CVD, and CKD, and the future space is expected to expand further. It is recommended to focus on GLP-1 targets to further lay out pharmaceutical companies, such as Huadong Pharmaceutical,$INNOVENT BIO (01801.HK)$, Xinlitai; at the same time, it is recommended to focus on upstream peptide API companies, such as Nuotai Biotech, Hanyu Pharmaceutical, and Haofan Biotech.

3) The field of self-immunity: The domestic population base is huge, and there are large fields of self-immunity that do not meet clinical needs. New varieties launched in the next 3 years are expected to open up the market. It is recommended to focus on pharmaceutical companies with advanced research pipeline progress in the field of self-exemption, such as Sansheng Guojian, Zhixiang Jintai, and Connoah.

4) CXO: There is a lot of long-term space, and the performance of the role of a water seller is more certain. It is recommended to focus on companies with integrated industrial chains, including$WUXI APPTEC (02359.HK)$,$WUXI BIO (02269.HK)$,$PHARMARON (03759.HK)$,$TIGERMED (03347.HK)$.

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