The Zhitong Finance App learned that Huaxin Securities published a research report saying that GLP-1RA is an epoch-making variety and has shown a booming trend overseas due to its excellent sugar reduction and weight reduction advantages. Among them, Novo Nordisk and Lilly Pharmaceuticals are in a leading position. The sales performance of the two companies has allowed the market to continuously raise the peak expectations of GLP-1RA, and domestic companies have also benefited from the expansion of the market as followers or raw material reagent suppliers. Furthermore, GLP-1RA has now verified that its indications are chronic diseases with a wide range of people, which is enough to cultivate a huge market. We are optimistic about GLP-1RA's flexible growth in the fields of overweight/obesity, diabetes, and many future chronic diseases, and give the industry a “recommendation” rating.

Investment advice:Considering R&D speed, independent R&D, independent pricing, and brand effects, we focus on recommending Zhongsheng Pharmaceutical (002317.SZ), focusing on Cinda Biotech (01801), East China Pharmaceutical (000963.SZ), Hengrui Pharmaceutical (600276.SH), Borui Pharmaceutical (688166.SH), and Shiyao Group (01093); it is recommended to focus on Federal Pharmaceuticals (03933), Ganli Pharmaceutical (), Tonghua Dongbao (), Lepu Pharmaceutical (300003.SZ), Hanson Pharmaceutical (300003.SZ) 603087.SH 600867.SH 03692) and other companies.

The views of Huaxin Securities are as follows:

GLP-1RA is an epoch-making variety with rapid rise in overseas markets and becoming a popular racetrack that has received much attention

GLP-1 agonists (GLP-1RA) have shown unique advantages in lowering blood sugar and weight loss with remarkable efficacy. The recent release of continuous data shows that overseas markets are developing rapidly, and GLP-1RA has become a popular racetrack that has received much attention. In 2022, Novo Nordisk's semeglutide sales reached 10.9 billion US dollars, becoming the world's first major single product with sales exceeding 10 billion US dollars; in 2023, its sales are expected to exceed 20 billion US dollars. The newly launched Tilbertide from Eli Lilly also showed strong sales momentum.

Overweight/obesity+diabetic population base is huge, demand is strong, and GLP-1RA is actively exploring multiple chronic disease indications, and the market prospects are broad

In 2020, the number of overweight or obese people in China reached 507 million, and more than 1/2 of adults were overweight or obese. It is estimated that in 2030, the number of overweight or obese people in China will reach 825 million, and demand in the domestic weight loss market is strong. Compared with traditional varieties, GLP-1RA has outstanding curative effects in weight loss. Among them, simetaglutide lost an average of 12.4% in 68 weeks and tilbertide lost an average of 21.1% in 72 weeks. According to a neutral assessment, the market space of GLP-1RA in the field of overweight/obesity in China is expected to reach 46.1 billion yuan.

In 2021, there were 141 million diabetics in China, making it the country with the highest number of diabetics in the world. It is estimated that there will be 148 million people with type 2 diabetes in 2030. Compared with traditional hypoglycemic drugs, GLP-1RA has remarkable hypoglycemic effects. At the same time, it can reduce the risk of hypoglycemia with medication and benefit the cardiovascular system. According to a neutral assessment, the market space of GLP-1RA in the domestic diabetes field is expected to reach 25.4 billion yuan. Therefore, the potential market space of GLP-1RA in the domestic weight loss and diabetes fields is predicted, totaling 71.5 billion yuan.

Furthermore, GLP-1RA continues to expand indications for various chronic diseases such as chronic kidney disease, cardiovascular disease, non-alcoholic hepatitis (NASH), and Alzheimer's disease. In October 2023, Novo Nordisk's phase III clinical trial for chronic kidney disease was terminated early due to its excellent efficacy. Clinical data on other indications in the future are worth looking forward to.

In order to meet more clinical market needs, GLP-1RA continues to be iteratively upgraded, long-term, oral, and multi-target collaboration is the future development trend. GLP-1RA continues to be iteratively upgraded to better meet clinical needs: ① Short-acting to long-term effects: through continuous modification of the GLP-1RA structure, lengthening the duration of action of the drug; liraglutide is once a day, simeglutide is once a week, and Amgen is developing every four weeks; ② From single target to multiple targets: liraglutide and semiglutide are both single targets, Norhenod, Eli Lilly, Cinda Biotech, Lepu Healthcare, etc. have all been laid out Targets, multi-target synergistic effects are more advantageous than single targets; ③ From injection to oral administration to improve convenience; research and development needs to improve the bioavailability of oral drugs. In the future, GLP-1RA will also present a pattern of competition between multiple varieties, multiple dosage forms, and multiple companies.

Domestic pharmaceutical companies have joined one after another to fully lay out the GLP-1RA circuit. Generic drugs of liraglutide have already been approved for marketing, and innovative drugs are in phase III clinical trials as soon as possible

Domestic companies have comprehensively laid out the GLP-1RA circuit from different directions (generic drugs and innovative drugs), different locations (single target and multiple targets), different dosage forms (injection and oral administration), and different indications (T2DM, overweight/obesity, NASH, etc.). Currently, 18 companies have entered different stages of clinical trials. Among them, Huadong Pharmaceutical's liraglutide, etc. have been approved for marketing for diabetes and overweight/obesity, Cinda Biotech's innovative dual-target drug IBI362 has entered clinical phase III, and multiple targets such as Hengrui Pharmaceutical, Zhongsheng Pharmaceutical, and Borui Pharmaceutical have entered clinical trials. Clinical progress and data deserve close attention.

Risk warning:Risk of R&D failure or inability to industrialize, risk of increased market competition, risk of patent risk, risk of production capacity falling short of expectations, risk of policy change, risk of recommended company performance falling short of expectations, etc.