On October 21, the National Medical Products Administration and the State Administration of Traditional Chinese Medicine jointly issued the "Notice on Supporting the Development of Substitutes for Rare and Endangered Chinese Medicinal Materials", proposing specific measures such as strengthening industry-university-research cooperation, enhancing technical guidance, and expediting review and approval.
Futu Securities released a research report stating that with the increasing demand for traditional Chinese medicine resources in society, the development of substitutes for rare and endangered Chinese medicinal materials is receiving policy support, which is expected to accelerate the transformation and application of research achievements in substitutes for rare and endangered Chinese medicinal materials. It is reported that on October 21, the National Medical Products Administration and the State Administration of Traditional Chinese Medicine jointly issued the "Notice on Supporting the Development of Substitutes for Rare and Endangered Chinese Medicinal Materials" (hereinafter referred to as the "Notice"), providing supportive policies for prioritized review and conditional approval of registration applications for substitutes for rare and endangered Chinese medicinal materials. Currently, research on substitutes for endangered animal medicinal materials has made significant progress, and the introduction of new traditional Chinese medicine products is expected to speed up.
China Great Wall's main points are as follows:
The development of substitutes for rare and endangered Chinese medicinal materials is supported by policies.
With the increasing demand for traditional Chinese medicine resources in society and the continuous improvement of the acceptance of traditional Chinese medicine overseas, the contradiction between supply and demand of traditional Chinese medicinal resources is becoming more prominent. Wild nurturing or artificial breeding technologies have a long effective period, and the development of substitutes is highly valued. The "Notice" supports the inclusion of research on urgently needed substitutes for rare and endangered Chinese medicinal materials in relevant scientific research projects, promotes the registration of research results, deepens industry-university-research-medical collaboration and innovation, pushes forward key technological breakthroughs in the research of substitutes for rare and endangered Chinese medicinal materials, and is expected to accelerate the transformation and application of research achievements in substitutes for rare and endangered Chinese medicinal materials.
The introduction of new traditional Chinese medicine products is expected to accelerate.
The "Notice" specifically mentions support for the development of substitutes for "rare and endangered Chinese medicinal materials" such as pangolin scales, antelope horns, bezoars, bear bile powder, and cordyceps. In terms of market approval applications, the "Notice" specifies the types of applications for newly developed substitutes for rare and endangered Chinese medicinal materials, and encourages scientific development of substitutes according to different registration application paths, guidance on product development, and prioritized review and approval of registration applications for substitutes for rare and endangered Chinese medicinal materials with clear clinical positioning and significant clinical value. Currently, significant progress has been made in the research of artificial substitutes for endangered animal medicinal materials such as musk, bezoars, and bear bile powder. The "Notice" is expected to expedite the research and development, registration, and market launch speed of relevant traditional Chinese medicine products, enriching the variety of related products available on the market.
The bank continues to be bullish on listed Chinese medicine companies with the following characteristics:
1) Chinese medicine companies with the ability to produce and research artificial substitutes such as musk, bezoar, bear bile powder, and Cordyceps militaris;
2) Building a brand moat, with a single large product, benefiting exclusively from the inheritance of formulas by pharmaceutical companies;
3) Layout of the entire traditional Chinese medicine industry chain, especially companies with authentic Chinese medicinal materials and rich upstream resources;
4) Utilizing its own advantages to layout in areas such as dietary supplements, high-end daily chemicals, or innovative drugs, driving the development of brand pharmaceutical companies through multiple channels.
Recommend focusing on Jianmin Pharmaceutical Group (600976.SH), Dong-e-e-jiao (000423.SZ), Chongqing Taiji Industry (600129.SH).
Risk warning: Slow implementation of policies related to traditional Chinese medicine, R&D of new drugs not meeting expectations, intensified industry competition, and lower-than-expected terminal demand.
