“Science and Technology Innovation Board Daily”, May 5 (Reporter Zheng Bingxun) In the first quarter of 2024, many parts of the country successively issued relevant policies to support the high-quality development of the biomedical industry or innovative pharmaceutical devices to continuously optimize the biomedical innovation environment.

Policy warming is coming, and the overall development trend of biomedical companies on the Science and Technology Innovation Board continues to improve.

According to reports, since the establishment of the Science and Technology Innovation Board, it has strongly supported the financing and development of “hard technology” enterprises and actively cultivated new quality productivity. It has gathered 111 innovative biomedical companies, covering a wide range of industry segments such as innovative drugs, generic drugs, medical devices, clinical trial services, etc., focusing on treatment fields such as cancer, AIDS, hepatitis B, hepatitis C, etc., and has become the main listing location for global biomedical companies outside the US and Hong Kong. The industrial agglomeration effect and demonstration effects are outstanding, and the formation of new quality productivity is accelerating.

▌Many companies welcomed a “good start” in the first quarter

Judging from the first quarter performance data, the Science and Technology Innovation Board biomedical company continued its steady month-on-month trend in the fourth quarter of 2023, and the business situation continued to improve.

After three years of continuous losses, Baili Tianheng (688506.SH) quickly turned a loss into a profit in the first quarter of 2024, with net profit exceeding 5 billion yuan. Bailey Tianheng's first quarter results were expected to increase significantly. The main reason was that the down payment of 800 million US dollars agreed in the BL-B01D1 development and commercialization license agreement between the company and multinational pharmaceutical company Bristol-Myers Squibb (hereinafter referred to as BMS) was completed as scheduled, confirming revenue in the current quarter.

Earlier, the company announced in December 2023 that the company and BMS reached an exclusive license and cooperation agreement for BL-B01D1, an EGFR×HER3 dual antibody ADC drug independently developed by the company, and the two sides will jointly promote the development and commercialization of this product. After the cooperation agreement comes into effect, BMS will pay the company an initial payment of 800 million US dollars and up to 500 million US dollars in recent contingent payments. After reaching development, registration and sales milestones, the company will receive additional payments of up to 7.1 billion US dollars.

According to reports, this transaction set a new global record for the total transaction price of ADC drugs, and also set a record for both down payment and total transaction amount for authorized domestic innovative drug transactions. It is the first new dual-antibody ADC drug to successfully go overseas.

Also turning losses into profits is Shenzhou Cell (688520.SH). In the first quarter of 2024, Shenzhou Cell achieved revenue of 613 million yuan. Under the premise of maintaining a high level of R&D investment, it achieved an impressive net profit of 74.1974 million yuan. According to the company, the conversion from loss to profit is mainly due to the continuous steady increase in the company's product sales revenue, and cost reduction and efficiency by controlling operating costs and improving R&D efficiency.

Looking at the development process of Shenzhou Cell, the company has officially entered a rapid development path since its core product, Anjiain, an 8-factor coagulation factor, was approved for marketing in 2021. On the one hand, Anjia's sales revenue continued to increase, and its market share increased steadily. In 2023, sales of single drugs were about 1.78 billion yuan, an increase of more than 77% over the previous year. On the other hand, various products developed by the company, such as An Pingxi, An Jiarun, and Ambeizu, have been approved one after another, and the commercial product matrix is beginning to take shape. Under the leadership of new quality productivity, the company's innovative achievements have accumulated and underdeveloped, and operating revenue has grown rapidly from less than 1 million yuan at the time of listing to nearly 2 billion yuan.

In the medical device sector, Aibo Healthcare (688050.SH) achieved revenue of 310 million yuan in the first quarter of 2024, an increase of 63.55% over the previous year; realized net profit of 103 million yuan to mother, an increase of 31.26% over the previous year.

The company's performance in the first quarter was impressive. On the one hand, thanks to the steady growth of the company's core business such as artificial lenses, artificial lens revenue increased 41.67% year on year, and overseas revenue increased by more than 127.9% year on year. At the same time, with the gradual promotion of high-end bifocal crystals, the artificial crystal business maintained a steady growth trend.

On the other hand, the company's contact lens business layout ushered in a performance explosion after many years. In 2023, it had already achieved revenue of 137 million yuan, an increase of 1504.78% over the previous year. As production capacity increased in the first quarter of 2024, performance growth potential and profit contribution capacity were continuously strengthened, providing a second curve for the company's rapid growth. Furthermore, the company maintains strong R&D capabilities, and clinical projects such as aspherical trifocal astigmatism correction artificial lenses and aspherical extended depth of field (eDoF) intraocular lenses are being accelerated, and it is expected that it will continue to maintain its technical competitiveness in the field of ophthalmology.

▌Innovative pharmaceutical companies have entered a cash out period, and medical devices are gradually recovering

Judging from the fact that the term “innovative drug” first entered the “Report on the Work of the Government” this year, to the policy consultation drafts issued in Beijing, Guangzhou, Zhuhai, etc., the high-quality development of domestically produced innovative drugs is ushering in another spring. According to the 2023 performance questionnaire handed over by the Science and Technology Innovation Board Innovative Pharmaceutical Company, most companies' R&D results have gradually been realized, business performance has continued to improve, new quality productivity has added new momentum, and high-quality development has reached a new level.

BeiGene Shenzhou (688235.SH), a leading domestic innovative drug company, has accelerated the internationalization process and achieved impressive global market performance. In 2023, we achieved a total revenue of 17.423 billion yuan, an increase of 82.1% over the previous year; net loss to mother was 6.716 billion yuan, a year-on-year reduction of 6.926 billion yuan, a loss reduction of 50.77%. Mainly, the increase in revenue from core products and cost management contributed to the improvement of the company's operating efficiency.

In particular, Baiyuze (zebutinib), a second-generation BTK inhibitor independently developed by BeiGene, achieved global sales of 9.138 billion yuan (about 1.27 billion US dollars) in 2023, making it the first domestically produced innovative drug with annual sales exceeding 1 billion US dollars. The product's popularity is mainly due to its excellent clinical effects. Head-to-head clinical trial data shows that it is best-in-class (best drug in its class). It has now been approved for marketing in more than 65 countries or regions around the world, making it the BTK inhibitor with the widest range of indications.

Biotai (688177.SH), which adheres to the two-wheel drive of innovative drugs and biosimilars, has achieved a new “milestone” in domestic biosimilar developments in the past year. Its self-developed tocilizumab biosimilar drug and bevacizumab biosimilar were approved for marketing by the US FDA in September and December 2023, pioneering the marketing of domestic biosimilar drugs in the US. At the same time, the company is also initiating global phase III clinical trials for a number of other biosimilar drugs under development, which are currently progressing smoothly according to the plan.

In 2023, benefiting from the rapid release of listed products such as Galerie, Prerich, and Schrelli, the company achieved revenue of 705 million yuan, an increase of 54.86% over the previous year. Among them, the company achieved revenue of 244 million yuan in the fourth quarter, an increase of 232.32% over the previous year. Looking ahead to 2024, the company successfully broke through the FDA's two biosimilar drugs, which is expected to contribute more objective overseas revenue to the company.

Tebao Biotech (688278.SH), a leader in long-term biopharmaceuticals, has continued to grow rapidly since its launch, with a compound revenue growth rate of 38.30% in the past three years. The market penetration rate of the core product Pegbin continues to increase, achieving revenue of 1,790 billion yuan in 2023, an increase of 54.18% over the previous year.

The listing of Pegbin once broke the monopoly situation of foreign pharmaceutical companies on domestic hepatitis B treatment drugs and achieved import substitution. Currently, Pegbin's registered clinical phase III trial for the purpose of clinical cure of chronic hepatitis B has been completed and the marketing license application was accepted in March of this year. The approval of the new indications is expected to further boost the sales ceiling of this product. In addition, the listing application for the long-term human growth hormone Epeisan, developed independently by the company, was also accepted in January of this year. It is expected to further enrich the company's product line and contribute another revenue growth point.

In the post-pandemic era, as diagnosis and treatment activities returned to normal, new medical infrastructure brought original innovation based on clinical needs, volume procurement expectations ushered in the release of multiple positive factors such as mitigation, and stabilization of the influence of regulatory policies such as anti-corruption, the performance of the medical device sector reversed and repaired and accelerated into an upward cycle, and the fundamentals of the industry showed an upward trend. As a strategic platform for the capital market to serve scientific and technological innovation, the Science and Technology Innovation Board strongly supports the high-quality development of “new quality productivity” of medical devices.

In 2023, 28 medical device companies on the Science and Technology Innovation Board achieved a total operating income of 34.384 billion yuan, an increase of 23.89% over the previous year; a total net profit of 7.156 billion yuan, an increase of 44.13% over the previous year; and realized deducted non-net profit of 6.207 billion yuan, a year-on-year change of 16.30%. Twenty-two companies achieved year-on-year revenue growth, 5 companies increased by more than 50%; 26 companies achieved profits, 18 companies achieved year-on-year increase in net profit, and 8 companies increased by more than 50%.

Blood purification equipment Shanwaishan (688410.SH)'s revenue increased by 80.65%, and net profit to the mother increased by 228.34%. Shanwai Mountain's core product continuous blood purification equipment is currently one of the CRRT devices with the widest range of indications in the domestic market. The company took advantage of the release of demand for medical equipment updates to achieve rapid installation, and the product brand effect continued to increase.

Furthermore, on the consumables side, with the launch of new blood purification consumables, continuous blood purification pipeline hemodialyzers, and disposable blood perfusion devices, the company's consumables have been connected to the internet one after another, forming a synergy effect with hemodialysis equipment and CRRT, driving high sales growth. In the future, with the implementation of centralized procurement of hemodialysis consumables in some provinces, it is expected that the number of hospitals covered by the company will rapidly increase the number of hospital coverage of the company's consumables, accelerate the release of the company's consumables, and increase the company's profitability.

▌Actively respond to the “Improve Quality, Increase Efficiency, and Focus on Return” action

Under the Shanghai Stock Exchange's “Improve Quality, Efficiency, and Value Return” special action initiative, a number of biomedical companies on the Science and Technology Innovation Board responded positively, promulgated action plans, and proposed specific measures in terms of main business, investor returns, standardized operations, and investor exchanges, showing firm confidence in future development.

Alice (688578.SH) recently launched a cash dividend plan for the first time, becoming the fifth standard listed company on the Science and Technology Innovation Board with the second cash dividend after Shanghai Yizhong. According to the profit distribution plan, the company plans to distribute a cash dividend of 4 yuan for every 10 shares to all shareholders, for a total of about 180 million yuan in cash dividends. In addition, the company responded positively to the call to “increase the frequency of dividends” and further mentioned mid-term dividend matters in the “2024 “Improve Quality, Efficiency, and Heavy Return” action plan. If the first half of the year is profitable and the cash dividend conditions are met, the company plans to pay mid-term dividends to share development results with investors.

Tebao Biotech proposed that the company will continue to focus on the field of hepatitis B treatment and explore optimization plans for hepatitis B clinical cure and liver cancer prevention based on Pegbin to help hepatitis B patients achieve more standardized and scientific treatment. At the same time, we will increase our market expansion efforts, continue to enrich our product line, and continue to enhance our core competitiveness while consolidating our leading position in local fields, laying a solid foundation for the company's long-term development.

Aibo Healthcare will distribute a cash dividend of 4.90 yuan (tax included) for every 10 shares to all shareholders in 2023. At the same time, the capital reserve will be used to transfer 8 shares to all shareholders for every 10 shares. Aibo Healthcare said that the company will continue to focus on its main business, enhance the company's core competitiveness, maintain technological leadership, effectively protect investors' interests through good management, standardized corporate governance and positive investor returns, effectively fulfill the responsibilities and obligations of listed companies, return investors' trust, maintain the company's good market image, and promote the stable and healthy development of the capital market.