Hongbo Pharmaceutical: drug research and development+commercial production service provider
Hongbo Pharmaceutical is based on drug discovery and gradually extends the industrial chain: At the beginning of its establishment in 2007, the company's main business was drug discovery, providing services to Biotech with the founder's team's technical advantages in pharmaceutical chemistry; in 2010, it expanded process research and development to form business collaboration with drug discovery; in 2014, it merged with Kaiyuan Hongbo to expand commercial production downstream, and currently mainly produce independent products.
Drug discovery and process development: clear technical characteristics, small but fine collaborative development, and rapid growth. Compared with other listed CROs in China, Hongbo Pharmaceutical is currently relatively small in size, but its business is unique and focuses more on pharmaceutical discovery and process development with drug design as the fulcrum. As customer projects progress and the number of FTE increases, the company's drug discovery and process development have achieved rapid growth in recent years. In the future, as the company actively expands its customer base, there will be more room for growth.
The customer is mainly US Biotech, and the project is FIC. Since its establishment, the company has been committed to small molecule pharmaceutical chemistry research services with high technical barriers and high added value, and can provide differentiated drug design services for overseas biotech. Currently, foreign customers for front-end drug development are mainly concentrated in US biotech companies, such as Agios, Alexion, Nueces, etc.; participating projects are mainly FIC, accounting for 81.8% of the number of FIC projects as of 2022.
It features drug design, and AI-assisted enhancement capabilities. By the end of 2022, the company's CADD/AIDD technology platform had provided technical support for a total of 44 new drug projects, of which 2 had entered clinical phase I and 2 were in the clinical application stage. Currently, the number of customers who purchase the company's CADD/AIDD services has reached 9. In 2023, the company will further increase investment in R&D, plan to build a PR-GPT platform, and deploy large-scale language models (LLM) locally.
Customer drainage, drug discovery and process development develop collaboratively. When providing new drug development services to innovative pharmaceutical companies, by participating in early drug discovery research services, especially drug design, the company can get in touch with lead compounds earlier, enter process development earlier, and improve efficiency. As can be seen from the analysis of key customers in the front-end business, drug discovery customers in the process development business have a high degree of overlap, and the drainage effect is remarkable.
Commercial production: high domestic share, overseas rest to rest
Commercial production is currently dominated by the production of independent products, of which tigrelor intermediates contribute the main revenue. The company supplies major customers that have won bids for domestic procurement, so the domestic market share is high and the pattern is stable. However, in the past, the company's overseas sales of tigurello intermediates were mainly in the Indian market, and it also had a presence in Europe and America. Supply in the Indian market has been damaged during the COVID-19 pandemic in the past two years and is currently recovering; with the European and American market ending the extended protection period for Tigrello's European and American patents in December 2024, generic drug release is expected to bring further demand for antiglerol APIs and intermediates. Kaiyuan Hongbo, as the world's main supplier of tigurello intermediates, is expected to receive more overseas orders.
Risk warning
1. The risk of a decline in the terminal price of tigrelor preparations;
2. Risk of exchange rate fluctuations;
3. The risk of new customer expansion falling short of expectations.