share_log

兆科眼科(06622):二次创业布局眼科百亿赛道,高瓴资本爱尔眼科齐上阵

Zhaoke Ophthalmology (06622): Second venture lays out the 10 billion ophthalmology circuit, and Gao Lin Capital Aier Ophthalmology joined forces

智通財經 ·  May 10, 2021 08:31

With the domestic aging trend becoming more and more obvious, and the rate of myopia among young people increasing year by year, the development prospects of the Chinese ophthalmic drug market are extremely promising. According to insightful data, China's ophthalmic drug market is expected to grow from 2.6 billion US dollars in 2019 to 20.2 billion US dollars in 2030, with a compound annual growth rate of 20.6%, thus attracting many pharmaceutical companies to deploy the eye medicine sector.

As a biomedical company dominated by R&D and the market, Lee's Pharmaceutical Company (00950) is also betting on ophthalmology. After leading Lee's Pharmaceutical Company through more than 25 years of business activities and achieving success, the founder, Dr. Li Xiaoyi, resolutely chose to start a second business and enter the ophthalmology segment. As an ophthalmology pharmaceutical company, Zhaoke Ophthalmology (06622), a subsidiary of Lee's, has been separately spun off and listed on the Hong Kong Stock Exchange. On April 29, Zhaoke Ophthalmology was listed on the Hong Kong Stock Exchange. In the future, Dr. Lee will be responsible for formulating the company's development strategies and policies, as well as the overall day-to-day management of the business and operations. At the same time, according to the announcement, he will also continue to serve as a senior consultant for Lee's Pharmaceutical Company to provide advice and share valuable expertise.

According to the prospectus, before listing, Zhaoke Ophthalmology carried out 2 rounds of financing, raising a total amount of 195 million US dollars. After the B round of financing was completed, the company's valuation is expected to reach 470 million US dollars. In addition to this, GIC, Gaoxin, TPG, Zhengxingu Capital, Aobo Capital, Aier Ophthalmology (300015.SZ), and Fangyuan Capital all gave strong support to the company and invested in shares one after another. During the global sale period, many institutions such as Matthew Asia, CaaS Capital, Jenison, and Mass Ave were introduced as their cornerstone investors.

The strong cornerstone shareholder camp has also made Zhake Ophthalmology even more remarkable, so what exactly is the texture of Zhake Ophthalmology?

Combining imitation and innovation, the market space for core products exceeds 10 billion

The Zhitong Finance App learned that Zhaoke Ophthalmology is a clinical-stage non-profit biological ophthalmology pharmaceutical company. Under Dr. Li Xiaoyi's leadership, the company's product pipeline continues to be enriched. There are 25 drug candidates, including 13 innovative drugs and 12 generic drugs, covering most major ophthalmic diseases and symptoms affecting the anterior and posterior ocular sections.

In terms of innovative drugs, Mega Ophthalmology is currently developing a total of 13 products. Among them, cyclosporin A eye gel, cyclosporin A/ribapat eye gel, and ZK002 are innovative drugs developed in-house, and the others are innovative drugs introduced in collaboration.

image.png

Among many innovative drugs, the fastest progressing is cyclosporine A eye gel, which is currently in phase III clinical trials. The company expects to complete the trial in the third quarter of 2021 and submit a new drug application to the National Drug Administration in the fourth quarter of 2021.

According to the prospectus, cyclosporin A eye gel is a medicine for dry eye disease. The causes of dry eye syndrome are complex. It is related to the living and working environment, long-term use of certain drugs and cosmetics (such as contact lenses and beautiful eyes). Long-term screen staring at the screen by office workers is also an important factor in inducing dry eye.

According to data compiled by the Tongren Ophthalmology Foundation, in the US epidemiological survey, 14.4% of people aged 48 and over had dry eye. According to the results of a questionnaire survey of 13,517 cases in Canada, 28.7% of people had symptoms of dry eyes. Japan screened 2,127 cases of normal people and found that 17% had dry eye. According to an epidemiological survey in India, more than 20% of people aged 30 to 40 suffer from dry eye; among people aged 70 and over, the prevalence of dry eye is as high as 36.1%. Among people aged 65 and over in Taiwan, 33.7% have dry eye. According to China's prevalence rate and epidemiological data (21-30% prevalence rate), the number of dry eye patients in China is huge, with a population of 200 to 300 million patients.

image.png

Furthermore, the prevalence of moderate to severe dry eye disease in 2019 was 77.1 million, and the number of patients is expected to continue to grow as the population ages, environmental pollution worsens, autoimmune diseases increase, and the length of time spent wearing contact lenses and using electronic screens increases. The prevalence of moderate to severe dry eye disease in China is expected to increase to 85.7 million in 2024, and further increase to 93.7 million in 2030.

As far as sales revenue is concerned, the drug market for moderate to severe dry eye diseases in China remained stable from 2015 to 2019. With the launch of innovative immunomodulatory drugs related to dry eye disease, increased patient awareness, and rising diagnosis and cure rates, it is expected that the drug market for moderate to severe dry eye disease in China will increase from 300 million US dollars in 2024 to 1.6 billion US dollars in 2030, with a compound annual growth rate of 34.1%.

image.png

In such a large market, only one topical cyclosporine A zrun is currently marketed in China, which is a generic drug of Restasis. Furthermore, as of the last practical date, with the exception of Zrun, three candidates for cyclosporine A are in phase III clinical trials. Cyclosporin A eye gel from Mega Ophthalmology is the only hydrogel formulation for topical use that can be administered once a day. Compared with other drug candidates, it has strong advantages in ease of administration and compliance with doctor's instructions.

image.png

Independent development+strong administration convenience, Mega Ophthalmology's cyclosporin A gel is expected to achieve rapid release after approval for marketing.

In addition to the large variety of cyclosporine, NVK-002 in the innovative drug pipeline is also a major product, which is expected to bring great benefits to the company.

Low-concentration atropine is the only anticholinergic drug recommended by the appropriate technical guidelines for the prevention and control of myopia in children and adolescents. According to data from the World Pediatric Ophthalmology and Strabismus Myopia Consensus Statement, low-concentration atropine is the most effective intervention to control the deepening of myopia; compared with high-concentration atropine with more side effects, low-concentration atropine is well tolerated and more effective in controlling myopia, and has excellent safety, so it may become a standard treatment. As of the last practical date, there are no commercialized atropine drugs to treat myopia worldwide.

image.png

Due to the lack of effective drugs, the domestic myopia ophthalmic drug market is empty.

On the demand side, however, it is rising year by year. According to the Guoxin Securities Research Report, the incidence of myopia at various stages of Chinese youth continues to rise as a result of “long study hours+few outdoor activities”. According to the Chinese youth eye big data report, the myopia rate of elementary school students in China is as high as 45.7%, and as education increases, the myopia rate of high school students in China is as high as 83.3%.

image.png

Due to the huge audience, the market size of myopia drugs in China is expected to increase from 126 million US dollars in 2024 to 3 billion US dollars in 2030 (China's first myopia drug is expected to be approved in 2024), with a compound annual growth rate of 69.6%.

image.png

According to insightful data, NVK-002 is one of the world's most advanced atropine candidates for controlling the progression of myopia, and according to the date of initial publication, NVK-002 is the first atropine drug announced in the world. Furthermore, with its proprietary dosage form, NVK-002 successfully solved the instability of low-concentration atropine. It does not contain preservatives and has an expiration period of up to 24 months. In other words, in terms of low concentrations of atropine, NVK-002 has an advantage unmatched by other competitors.

image.png

Currently, Zhaoke Ophthalmology's NVK-002 is in the FDA's phase III clinical phase. The company plans to submit a new drug clinical trial application to the National Drug Administration in the second quarter of 2021. After receiving approval for the new drug clinical trial application from the National Drug Administration, it is planned to begin phase III bridged clinical trials in China in the fourth quarter of 2021, and submit a new drug application to the National Drug Administration in 2023. The marketing of this drug has also filled the gap in domestic myopia medication.

There is a gap in drug use in the market, plus the myopia market is huge, and the NVK-002 market advantage is obvious. Once listed, NVK-002 will bring great profits to Mega Ophthalmology.

Let's also look at generic drugs. In terms of generic drug layout, Zhaoke Ophthalmology focuses more on the indication of glaucoma.

image.png

Glaucoma is the second leading cause of blindness in the world. It is a chronic and progressive disease associated with damage to the optic nerve caused by high eye pressure. The ratio of intraocular aqueous water production to aqueous water discharge determines intraocular pressure. Almost all glaucoma is primary glaucoma, and can generally be divided into two types: open-angle glaucoma and closed-angle glaucoma. In China, about 40% of primary glaucoma is open-angle glaucoma. In China, the number of glaucoma patients increased from 13.4 million in 2015 to 15.3 million in 2019. Driven by the acceleration of population aging, the number of glaucoma patients is expected to rise further to 20 million in 2030. Furthermore, the diagnosis rate of glaucoma is expected to rise sharply from 20.0% in 2019 to 60.6% in 2030.

image.png

Corresponsively, the market size of glaucoma drugs in China also increased from 110 million US dollars in 2015 to 163 million US dollars in 2019, with a compound annual growth rate of 10.2%. China's glaucoma drug market is expected to grow sharply from 2019 at a compound annual growth rate of 25.4% to $2 billion in 2030.

image.png

One aspect of the company's layout is that the glaucoma market is large enough. On the other hand, in most cases, glaucoma cannot generally be controlled by any single treatment over time, requiring the combined use of multiple drugs with different mechanisms of action. As a result, the company developed 7 comprehensive glaucoma products, including three PGAs, a L-beta blocker, and three fixed-dose combination eye drops, covering the mechanism of reducing intraocular pressure (that is, increasing the outflow of aqueous fluid and reducing the production of aqueous acid) and effective for open-angle and closed-angle glaucoma.

Currently, the best-selling glaucoma drugs in China include monotherapy PGA drugs and beta receptor antagonists, and fixed-dose combination eye drops that combine PGA and beta receptor antagonists in a single dosage form. According to medical guidelines, monotherapy eye drops are recommended as first-line treatment. Fixed-dose combination eye drops are used for patients whose condition worsens or who fail to achieve target eye pressure after using monotherapy drugs. Compared with the use of PGA and beta receptor antagonists alone, fixed-dose combined eye drops reduce the total number of times eye drops are used, improve convenience and patients' compliance with doctor's instructions, reduce the cleansing effect caused by subsequent drops, and have lower ocular surface exposure and toxicity.

image.png

As of the last practical date, Mega Ophthalmology's beta receptor antagonist candidate is the only clinical-stage beta antagonist in China. In addition, the company's PGA monotherapy bimeprost and two fixed-dose combination therapy candidates (bemethoxil, timolol and trevotia?) are expected to be the first such generic drug in China and are expected to be approved in the fourth quarter of 2021.

image.png

Judging from the above analysis, the company may launch two major products in the fourth quarter of this year.

The advantages of commercialization are obvious, and there is plenty of growth

For enterprises, whether it is imitation or innovation, the ability to commercialize is extremely important to the company's growth. According to insightful data, the Chinese ophthalmic drug market is highly concentrated in hospitals, that is, “the one who gets the hospital wins the world.”

It is worth noting that the cornerstone investors of Zhaoke Ophthalmology include Aier Ophthalmology, the largest private eye hospital in China.

According to public information, as of November 2020, the total number of Aier Eye Hospitals and Optometry Centers reached more than 600, including more than 500 in mainland China, 7 in Hong Kong, 1 in the US, more than 80 in Europe, and 12 in Southeast Asia. The annual number of outpatient visits in mainland China exceeds 10 million.

As a shareholder of Zhaoke Ophthalmology, it is obvious that after the launch of Zhaoke Ophthalmology's products, it can quickly enter AIR Ophthalmology's suppliers. Relying on AIR Ophthalmology's existing channels, Zhaoke Ophthalmology can easily achieve the first position in domestic ophthalmology.

Private hospitals are supported by Aier Ophthalmology, while public hospitals need to set up their own layout. Currently, the company has also begun planning. According to the prospectus, Zhaoke Ophthalmology plans to enter the top 40 public hospitals by 2021 (based on glaucoma prostaglandin drug sales) and the top 100 public hospitals by 2022 (based on glaucoma prostaglandin drug sales).

In addition, the parent company of Zhaoke Ophthalmology, Lee's Pharmaceutical, also has strong sales capabilities. According to reports, Lee's Pharmaceutical has established extensive cooperative relationships with more than 20 international companies. If Lee's Pharmaceutical Company empowers its existing channels to Zhake Ophthalmology, Zhake Ophthalmology's products can also quickly open up markets at home and abroad.

In addition to the support of Air and its parent company, Zhaoke Ophthalmology has also begun to make efforts in its own commercial construction. Currently, the company is forming a core commercialization leadership team. The goal is to have about 50 members by 2021, 100 members by 2022, and 200 to 300 members within the next five years.

It can be seen from this that Zhaoke Ophthalmology not only has an advantage in its products; its commercialization is supported by Aer Ophthalmology and its parent company Lee's Pharmaceutical, and its competitive advantage among peers is also very obvious. After a successful listing, with the support of capital, Zhaoke Ophthalmology's R&D and commercialization capabilities will reach the next level, and is expected to become a big dark horse among eye medicine companies.

The translation is provided by third-party software.


The above content is for informational or educational purposes only and does not constitute any investment advice related to Futu. Although we strive to ensure the truthfulness, accuracy, and originality of all such content, we cannot guarantee it.
    Write a comment