The Zhitong Finance App learned that Haitong International released a research report saying that compared with innovative domestic drugs to replace relatively mature oncology drugs, self-exempt drugs also have the advantage of a large market size (suitable for the domestic pricing environment for new drugs). The differences are that patients are widely distributed (channel coverage is required), are more chronic diseases, and there is competition for traditional drugs (requiring fast efficacy and high accessibility). Combined with the current market financing environment, although the self-defense target layout is still crowded, companies with good cash flow themselves will be more likely to obtain excess profits. It is recommended to focus on Hengrui Pharmaceutical (600276.SH), Kangzhe Pharmaceutical (00867), Sansheng Guojian (688336.SH), etc.

Haitong International's main views are as follows:

Autoimmune diseases are treated for a large number of people and often require lifelong medication. It is the second largest drug market in the world, and new treatments are rapidly iterating.

Traditional self-immunization drugs are mainly immunosuppressants and anti-rheumatic drugs to improve the condition, etc., and long-term use has major side effects. The global “drug king” adalimumab (TNFα) covers a broad spectrum of self-immune diseases such as psoriasis and rheumatoid diseases, and the market is huge under long-term drug use. Despite changes in new treatments and the entry of biosimilar drugs into the market, adalimumab sold US$21.24 billion in 2022. In recent years, breakthroughs have been made with new targets, new dosage forms, and new long-term self-immunity drugs, and cell therapy has shown the potential to cure lupus erythematosus with a single dose. The iteration of technology creates opportunities for new entrants.

Health insurance coverage provides an opportunity for self-exemption from the release of new drugs in the country.

As biopharmaceuticals with faster effects and better results enter the Chinese market and are covered by medical insurance, domestic self-exempt new drugs have reached an inflection point in commercialization. In 2020, the prices of scotiumab (IL-17A) and pliumab (IL-4Rα) were reduced to medical insurance (the estimated annual cost of these two drugs was less than 10,000 yuan after medical insurance). By 2022, the sample hospital sales had reached 1.22 billion yuan and 870 million yuan, respectively.

Atopic dermatitis, COPD, asthma, and psoriasis are major diseases with over 100 million cases worldwide.

Atopic dermatitis: In the past, it was mainly treated with topical preparations such as TCS/TCI and PDE-4. In recent years, the advent of IL-4Rα and JAK1 inhibitors has met the treatment needs of patients with moderate to severe dermatitis. The sales performance of the imported drug dupriumab (IL-4Rα) in the domestic market was strong, and the JAK inhibitors upatinib and abucitinib seized the share. Among domestic IL-4R targets, Connoya Biology, Sansheng Guojian, and Zhixiang Jintai are leading in progress; JAK1 targets Hengrui Pharmaceutical and Zejing Pharmaceutical are leading in progress;

COPD: No new drugs have been approved globally, and Ensifentrine (PDE-3/4) and dupriumab (IL-4Rα) are expected to break through and be approved domestically. Domestic same-target drug development is in the early stages, and Chinese companies such as Biopharmaceutical and Hengrui Pharmaceutical are leading;

Asthma: Mainly hormonal respiratory preparations. Drugs such as IgE, IL-5, and IL-4Rα inhibitors only cover various subtypes. TSLP monoclonal antibody is the first broad-spectrum asthma biopharmaceutical approved. Domestically marketed drugs include omalizumab and its biosimilar (IgE), dupriumab (IL-4Rα), and mepolizumab and its biosimilar (IL-5). Domestic companies Connoah Biotech, Zhixiang Jintai, Hengrui Pharmaceuticals, Chia Tai Tianqing, and Sansheng Guojian are leading clinical progress in different targets. Among them, Conocoah Biotech's CM310 is in clinical phase 2/3, and is expected to be the earliest domestically produced drug to be marketed;

Psoriasis: In the past ten years, new biologics have been rapidly iterated in the global market. TNF-α has met initial demand. IL17A (/F) has achieved short-term and extremely strong curative effects. IL23 p19 has shown advantages in long-term treatment, and some companies are developing more accessible IL17A small-molecule drugs. In the domestic psoriasis market, scuciumab (IL-17A) has a first-mover advantage, and 7 imported drugs, including gusezizumab (IL23 p19), ecizizumab (IL-17A), and deuterium clexitinib (TYK2), seize the market. The IL-17 inhibitors Hengrui Pharmaceutical and Zhixiang Jintai are leading the way. IL23p19 Tilazumab introduced by Kangzhe Pharmaceutical has been approved. Cinda Biotech's IBI112 is in phase 3 clinical phase, and is expected to be the first domestically produced drug to be marketed.