On April 25, the weight loss drug concept trend was active. As of press release, the sector index rose more than 3%, the individual stock Changshan Pharmaceutical rose “20cm”, Borui Pharmaceutical rose more than 6%, Hanyu Pharmaceutical and Boji Pharmaceutical rose more than 5%, and Keyuan Pharmaceutical, Baihua Pharmaceutical, and Haofan Biotech followed a sharp rise.

Where are the highlighted individual stocks in the sectorChangshan PharmaceuticalStrong ups and downs. After the market yesterday, Changshan Pharmaceutical announced that its holding subsidiary's application for marketing license for the injectable drug was accepted by the State Drug Administration. In addition, Changshan Pharmaceutical and its subsidiaries received a government subsidy of RMB 3,5241,000.However, Changshan Pharmaceutical once again emphasized that epenatide injections are indicated for the treatment of type 2 diabetes, and no clinical trials of avenatide have been conducted on obesity or weight loss.

According to industry news, on Wednesday local time, Bernie Sanders, Chairman of the US Senate Health, Education, Labor and Pensions Committee, said that the committee is investigating Novo Nordisk's pricing. Sanders stressed that the price of GLP-1 drugs “must be lowered” so that consumers can buy them, and that the government does not go bankrupt because of reimbursing these drugs.

The same “recipe”

Since the concept of diet pills became popular last year, Changshan Pharmaceutical has also been a prominent presence in the sector.

Looking back at the hot “diet pill” market in September of last year, Changshan Pharmaceutical was originally a heparin company, and the “story” that kept it going up and down at the time was also news about the hypoglycemic drug ebennatide, which it began developing in 2013.

According to reports, abenatide is a GLP-1 drug, just like Novo and Nord's simeglutide. At the time, Changshan Pharmaceutical invested in epenatide for ten years. Fortunately, it was just in time for the diet drug concept market to “explode”, and abenatide also completed phase III clinical research.

However, this time, in fact, the market is also looking forward to it. Earlier, an analysis pointed out:The company's only next highlight is that the company has just completed phase 3 clinical trials and will soon apply for marketing. This will bring large profit margins, especially in terms of diet pills.

In terms of performance, on the evening of January 30, Changshan Pharmaceutical announced a pre-loss in performance. According to the announcement, about 60% of Changshan Pharmaceutical's 2023 revenue comes from domestic sales of heparin formulation products. The company expects to achieve net profit attributable to shareholders of listed companies of -1.2 billion yuan to -1 billion yuan in 2023, which will result in losses. In the previous year, Changshan Pharmaceutical had a profit of 17.513,500 yuan.

The company indicated that the main reasons for the pre-loss in performance were:

Centralized drug procurement led to a decline in the company's revenue of heparin formulation products and a decrease in gross margin; changes in the international heparin industry led to a sharp year-on-year decline in the company's API export revenue; the impact of preparations for inventory price reductions was calculated.

Changshan Pharmaceutical clearly lacks performance support. Currently, it is at a low point of performance. Its main business is heparin preparations and heparin APIs. Among them, heparin preparations account for 76% of gross profit, and heparin raw materials account for 24% of gross profit. Furthermore, heparin preparations decreased by 28% year on year, and heparin raw materials decreased by 50% due to price.

In the latest announcement mentioned above, the company also indicated that this time, the holding subsidiary has obtained a notice of acceptance for the registration and marketing of epenatide injectable drugs, which will not have a significant impact on the company's current performance. It is conducive to advancing the development and marketing progress of this product and further enhancing the company's core competitiveness.

US Senate Health Committee “cuts” weight loss pills

The U.S. Senate Committee on Health, Education, Labor, and Pensions is investigating Novo Nordisk's pricing strategy for the GLP-1 drug simeglutide. The drug is effective in losing weight and treating type 2 diabetes, but it is expensive, costing nearly $1,000 a month, putting a heavy burden on patients and government reimbursements. Chairman Bernie Sanders asked Novo Nord to explainWhy is there a significant difference in pricing between Ozempic and Wegovy, drugs with the same ingredients, and asked if the company would consider a drastic price reduction.

According to the US Centers for Disease Control and Prevention (CDC) data, about 42% of the adult population is obese and 11% have diabetes, indicating that tens of millions of Americans may need this expensive medication.

In a letter to Novo Nordisk's CEO, Sanders requested the company to provide internal communication records on drug pricing and respond by May 8. Novo Nordisk responded that the company is committed to partnering with policy makers to support access to affordable treatment for all patients.

The US government and health insurance providers are facing financial pressure. Although many major health insurance plans cover GLP-1 drugs, some plans have begun to limit drug use or stop coverage. Federal health insurance currently does not reimburse diet pills, but may reimburse medications used to treat diabetes and cardiovascular problems.

The US Congressional Budget Office report indicates that if federal health insurance covers GLP-1 drugs for weight loss at current prices, the deficit will increase in the next 10 years. Sanders stressed that for drugs that cannot be bought, no matter how effective they are, there is no real value.