Core views

Nootai Biotech is one of the few biomedical companies in China whose main research and development direction is polypeptide drugs. It has accumulated deep technology and a rich variety of products in the field of peptides.

In recent years, mainly selected products have grown rapidly, and the CDMO business has developed steadily. As GLP-1 drugs continue to expand their fields of application, the GLP-1 market is expected to expand at an accelerated pace. As patents for some varieties are about to expire, the overall demand for peptide APIs is strong. The company has sufficient talent reserves in related fields, and is planning production capacity in a forward-looking manner. It is expected to achieve several tons of peptide production capacity in 25 years, and is expected to accelerate growth with industry-leading production scale and excellent product quality.

titles

Combining independent research and development with customized production, Nuotai Biotech, a pharmaceutical leader deeply involved in the field of peptides, is one of the few biomedical companies in China whose main research and development direction is polypeptide drugs. Focus on independent research and development and production of peptide drugs and small molecule chemicals. In all fields, from advanced pharmaceutical intermediates, APIs to formulations, the company actively carries out product development and business expansion, deepens its segmentation, focuses on the peptide business, and gradually forms a rapid development pattern of two-wheel drive for independently selected products and customized products. The company is committed to breaking through technical bottlenecks in drug development and production through technological innovation, building a whole industry chain from advanced pharmaceutical intermediates, APIs to formulations, and providing green, low-cost, high-quality and efficient pharmaceutical-related products and technical services to global pharmaceutical companies.

Patented cliffs are superimposed on GLP-1 for continuous catalysis. The peptide market accelerates the expansion of peptides. They are important active molecules in organisms that participate in and regulate important physiological processes such as cell proliferation, growth, differentiation, metabolism, and apoptosis. Polypeptide drugs are currently widely used in the fields of tumors, diabetes, cardiovascular diseases, etc., and the market scale is expanding year by year. 2014-2026 is the peak period when patents for major types of peptide drugs expire. Liraglutide is currently on the market as generic drugs at home and abroad, and simeglutide is expected to expire in 26 years in some countries. Combined with the continuous expansion of GLP-1 drugs in new indications such as weight loss, cardiovascular, and sleep-respiratory syndrome, the peptide API market is expected to expand at an accelerated pace.

Revenue from independently selected products is growing rapidly, and customized products are growing steadily. The company's six major technology platforms cover all aspects of research and production of small molecules, peptides and oligonucleotide APIs and formulations. They are highly competitive in the production of polypeptides using solid-liquid fusion. While achieving high single-batch production, product quality can also maintain a high level of product quality. The company builds a high-quality development engine through an integrated platform of APIs and formulations. 1) In terms of APIs, domestic registration of 18 APIs has been completed, and 9 of these APIs have been approved for the production of marketed drugs. It is also one of the first companies in China to register liraglutide, simeglutide, and telpotide GLP-1 drugs. The company's main GLP-1 raw materials have high purity, few impurities, and excellent product quality. Under the explosive growth of GLP-1 demand, related self-selected products grew rapidly and became the main driving force for rapid growth in performance. 2) On the pharmaceutical side, the company collected and won bids for several products and continued to contribute to stable revenue. Among them, sales of oseltamivir phosphate capsules increased significantly under the influence of the epidemic in '23. At the same time, the company is also forward-looking laying out 37 products under development, such as APIs and formulations, and increasing the oligonucleic acid circuit to find the next growth point. 3) In terms of customized products, the company is stable and stable with a good customer base and project reserves, and the volume of large orders starting in '24 is expected to drive the long-term development of the enterprise. 4) The company proactively expands production capacity and establishes competitive barriers. At present, the company's peptide API production capacity has now reached the tonnage scale, and it is expected that by the end of 2025, the production capacity of peptide APIs will reach several tons, leading the overall layout of the industry.

Profit forecasting and investment advice

The company is a leading domestic enterprise in the field of polypeptides, with deep technology accumulation and comprehensive product layout. At the same time, GLP-1 drugs have huge potential for application, and demand in the API market is still in its infancy. As patents expire in various countries, it is expected to accelerate growth. The company's forward-looking production capacity layout is expected to achieve multi-ton peptide production capacity within 25 years, leading the production capacity layout industry, which is expected to support the company's long-term development. We expect the company to achieve revenue of 17.2, 21.5, and 2.63 billion yuan in 24-26, up 66.6%, 25.0%, and 22.3% year over year. Net profit attributable to mother was 4.02, 5.19 and 0.608 billion yuan, up 146.5%, 29.3%, and 17.2% year over year. Maintain a “buy” rating.

Risk warning: New drug development falls short of expectations; market competition enhances risk; capacity utilization falls short of expectations; industry policy risk