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如何估值开拓药业?

How to evaluate and develop the pharmaceutical industry?

丫丫港股圈 ·  May 4, 2021 17:41

Source: Ya Ya Hong Kong stock circle

Author: flamingoz

01.pngNiuniu knocked on the blackboard:

The company is not only focused on the horizontal extension of AR mechanism drugs, but also differentiated, so it is expected to find another way in the industry.

Most of the company's current market capitalization is the expectation brought by COVID-19-Pucrumine, which is what investors need to pay attention to.

At the end of last year, it was seen that the epidemic was about to be brought under control, but since the Lunar New year, the epidemic has rebounded, and countries have closed cities for the third time, and recently India has entered hell mode, a constantly mutated virus, causing twists and turns in the global recovery.

In this process, pharmaceutical stocks are still the brightest market stars, and all kinds of vaccines are in short supply, bringing huge profits to vaccine manufacturers.

In terms of COVID-19 's therapeutic drugs, there is also a new hope. A company's small molecular drug has achieved remarkable results in COVID-19 's clinical trials, and is expected to greatly reduce COVID-19 's critical risk. The effect seems to be far more effective than that of the smug Redsevir.

The drug is Proclomide, an AR inhibitor developed by domestic companies in the pharmaceutical industry. Phase 3 trials have been conducted in Brazil and the United States. If clinical results are significant, it should soon be adopted globally.

Because of the breakthrough of this drug, the development of pharmaceutical industry has also become the most dazzling star stock in the stock market this year, rising from 10 yuan to 70 yuan, the biggest gain in 2021.

For such a potential market and the still severe epidemic situation of COVID-19, is there still a chance to develop the pharmaceutical industry?

Planting willow unintentionally

From the perspective of drug mechanism, Puclosamide has little to do with novel coronavirus. AR inhibitors mainly inhibit androgens and are mainly used to treat diseases such as prostate cancer and acne.

However, in the new crown patient report, doctors stumbled upon the phenomenon that novel coronavirus was more likely to attack male patients, including that many reported patients had impaired testicular function, so the researchers tried to get patients to try Pucruamid. to see if it was caused by testosterone, but it achieved better-than-expected results.

In terms of mechanism, when the virus attacks the human body, it binds to ACE protein, and the role of AR inhibitor happens to be to control the ACE protein pathway, thus reducing the attack power of the virus to the human body.

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But interestingly, Enzalamide, which is also an AR inhibitor, has not shown the same effect on the virus as Proclomide in current private trials.

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In other words, apart from the mechanism of AR inhibitors, there may be a special mechanism of proclomide, which is an inadvertent COVID-19 drug with a special mechanism.

From this point of view, this drug is worth looking forward to. Many famous drugs in the world are planted unintentionally, such as the famous sildenafil, which was originally used to treat heart disease, but later expanded its aphrodisiac function and became a divine medicine.

Due to the fuzziness of the mechanism, there are often few imitation competitors, and there is a huge difference between imitation and follow, which makes the market competition very small, the pricing power is strong, and the profit margin will be very high.

It is currently revealed from Brazilian clinical data that Puclosamide has reduced the risk of severe illness by 92%, which is very strong. Moreover, Brazil is already the second worst country in the epidemic, with a large number of mutated viruses. This data has a very high gold content.

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In contrast, there are not many mutated viruses in clinical trials, such as Redcivir and Eli Lilly and Co neutralizing antibodies, which are currently approved, and the effect is not as good as that of Puclosamide.

Among the neutralizing antibodies of Eli Lilly and Co, Bamlanivimab (LY-CoV555) 2800mg and Etesevimab (LY-CoV016) 2800mg in 1035 patients, the incidence of events in the double antibody combination group was 2.1% (11 cases), and that in the placebo group was 7.0% (36 cases), indicating a 70% reduction in event risk (pair0.0004). There were 10 deaths in the study, all of which occurred in the placebo group. There was no death in the Bamlanivimab and Etesevimab double antibody treatment group.

By contrast, the data seen so far are more than an order of magnitude better.

It is also very important that Puclosamide is a small molecule drug with extremely high capacity for large-scale production. It is very easy for the company to increase its production capacity to produce hundreds of millions of tablets a year, but if the production capacity reaches hundreds of millions of tablets, it can also be reduced to the cost of a few pieces on a large scale. This pricing has a very high advantage over Redsevir or neutralizing antibodies, which also makes the profit margin extremely large.

Moreover, the difficulty that troubles Chinese pharmaceutical companies in selling their products to the world is the lack of a global commercialization team, but there is no such problem for COVID-19 drugs, which are widely expected. Governments of various countries will naturally purchase good drugs with good results. COVID-19 's good medicine does not have too high sales barriers, and the company does not need to worry about commercial academic promotion. Products can be sold around the world naturally and quickly.

From this point of view, at present, Puclosamide is unassailable in terms of cost, commercialization and other logical aspects, and the rest depends on the clinical effect and time.

Among the current drugs, there are also Pfizer Inc's PF-07321332 and Israel's EXO-CD24 with high expectations. the efficacy of these products is also worth paying attention to. They are also the main potential competitors of Puclosamide at present, especially in Israel, which is said to have a cure rate of 95% in the early stage, which is stronger than Puclosamide.

There are still many bright spots in other products.

Of course, apart from the current epidemic expectations corresponding to procarbamide, the company's pipeline is also noteworthy.

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The company is very focused on the development of drugs in the field of AR inhibitors, and the products currently under development also have a huge market space.

The company has laid out two generations of products, namely Freitane and GT20029, both of which use AR mechanism to treat hair loss. At present, the global market for hair loss is huge, but there are many shortcomings of existing drugs, so there has been no large market space. The company's products are expected to combine the advantages of existing products, external use + low side effects, to become the best products in this field. However, there is not much efficacy data available, and the time of drug resistance of AR seems to be much faster than that of finasteride.

ALK-1 is a better drug for existing VEGF products, and Ditopsetil and GT1708F are very novel targets.

Therefore, the company is not only focused on the horizontal extension of AR mechanism drugs, but also differentiated, which is expected to find another way in the industry.

However, it should also be noted that the market space for the rest of the drug pipeline is still on the low side, which cannot be compared with COVID-19, and the progress is also lagging behind. If COVID-19-Pucrumine is excluded, according to the potential of existing products, the valuation of the company can be matched by similar overseas companies such as Cassiopea, and then optimism should be less than 10 billion. Therefore, the vast majority of the company's current market capitalization is the expectation brought by COVID-19-Pucrumine, which is what investors need to pay attention to.

Conclusion

For such a company, valuation is difficult because no one can predict how the world will change in the future. Moreover, the COVID-19 epidemic has been changing, and later, the situation in India has improved, and that in Europe and the United States has also declined steadily with the advance of the vaccine, so no matter how huge the company's short-term increase is now, then the decline will also be huge.

Assuming the most optimistic scenario, the world will not be able to solve COVID-19 for many years to come, and the number of new cases of COVID-19 every year will remain at the current level of tens of millions per year, and the company is effective against various variants of the subsequent virus, and maintains the existing excellent clinical data. according to Redxivir's sales of about $1 billion in a single quarter after its listing, under very optimistic circumstances, the company is expected to achieve global sales of more than $4 billion a year. At present, the highest sales of COVID-19 treatment products is Pfizer Inc vaccine, which is expected to sell US $15 billion in 2021.

In the most optimistic case, Puclosamide could transform itself into the largest pharmaceutical company in China by sales.

However, considering that COVID-19 drugs have the characteristics of one-time income, even if the sales reach 4 billion US dollars, the actual profit level can reach nearly 10 billion RMB. The target company is Yingke Healthcare. According to the valuation of Yingke, the market value that can be given can go to about 60 billion.

Of course, considering the worst-case scenario, the company's next three phases of clinical failure, or approval but general data, or before approval, the world epidemic has been basically controlled by the current vaccine, so the performance brought by Pucruamide is very limited, so, the company's valuation can only return to the original level, which also has a lot of room for adjustment.

As a result, the company's valuation is quite artistic, maybe 60 billion or 5 billion, depending on the future of the world. However, from the point of view of odds, either a total loss or a profit of several times, the ideal maximum return must be much higher than the maximum loss, so be prepared for a total loss to bet on the possibility of being approved in the future. This makes light position participation may also be a feasible way to play.

Edit / lydia

The translation is provided by third-party software.


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