occurrences
On December 15, 2023, the Jiangxi Provincial Health Insurance Bureau issued the “Notice Concerning the Announcement of the Proposed Selection Results of the Interferon Interferon Inter-Provincial Alliance Centralized Volume Procurement”. The 29 Provincial Interferon Interferon Alliance Concentrated Volume Procurement Information Disclosure Conference, led by the Jiangxi Provincial Health Security Bureau, was successfully held in Nanchang, and the proposed selection results were produced.
Comment:
The average decline in exclusive varieties was moderate, with 20.91% highlighting the exclusive advantage. According to the Jiangxi Provincial Health Insurance Bureau, a total of 13 interferon pharmaceutical companies participated in on-site bidding for this collection, and 12 varieties and 48 specifications were successfully purchased. Among the varieties registered by more than 3 companies (human interferon α2b injections), the average drop was 47.79%, the highest drop was 54.58%; the varieties registered by 2 companies (human interferon α1b injections and human interferon α1b eye drops) had an average drop of 19.38%, the highest drop of 24.55%; the nine varieties registered by exclusive companies had an average drop of 20.91%, the highest drop of 27.19%. According to the calculation of the procurement volume agreed by the allied provinces, it is estimated that the relatively most effective bid will save the allied provinces 307 million yuan in procurement capital per year.
After the results of this collection and selection are implemented, it will help insured patients in anti-viral infections, oncology, pediatrics, dermatology, and gynecology to reduce the burden of medical expenses and greatly improve the accessibility of medicines.
Pegbin's long-acting interferon is exclusive. The price stability during the long-term bid period continues to benefit. Among them, Tebao BioPolyethylene Glycol Interferon α2b Injection (Pegbin) received a high level of attention. The proposed bid price is 667.38 yuan/stick (180 μg (660,000 U) /0.5 ml/stick (pre-filled)), a decrease of 18.66%. Compared with the winning bid price of 697.41 yuan in 2022, the drop was only 4.3%, higher than expected. Currently, as evidence-based medical evidence of the benefits of interferon for hepatitis B patients continues to accumulate, the number of clinically applicable people continues to expand, the length of time patients use medication is further extended, and the demand for Pegubin continues to rise. Clinical demand makes it certain that a single product will continue to be released. The current interferon collection period of the Jiangxi Provincial Alliance continues for 4 years, which is conducive to long-term price stability, and Pegbin will continue to benefit.
Many advances in clinical research and development have been catalyzed, providing impetus for medium- to long-term growth. The company has been deeply involved in the hepatitis B field for many years. The “Everest Project” and “Oasis Project”, a large cohort of real-world research, successfully completed and joined the group in 2022, respectively. Among them, the “Everest Project” will bring real-world data on the cure of hepatitis B. Hepatitis B cure phase III clinical trials continue to advance rapidly. Hepatitis B cure is expected to be included in the Pegbin manual to support the clinical application of Pegvin. The “Oasis Program” will continue to enroll patients to ensure the continued growth of new patients.
Investment advice: Maintaining a “buy” rating
We expect the company's revenue for 2023-2025 to be 2.106 billion yuan, 2,715 billion yuan, and 3,505 billion yuan, respectively, up 37.9%/29.0%/29.1% year on year; realized net profit of 460 million yuan, 658 million yuan, and 925 million yuan respectively, an increase of 60.3%/42.9%/40.6% year on year, and the corresponding PE is 46X/32X/23X. We are optimistic about the competitive pattern of the company's Pegbin products, the smooth progress of product academic projects, the continued expansion of the target audience, and the continued maintenance of the “buy” rating.
Risk warning
The risk of fluctuating sales, uncertainty about industry policies, risk of new drug development, etc.