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It is said that "every biotech has a heart to become a biopharma", and Remegen is no exception
.
Recently, Remegen released a draft A-share restricted stock incentive plan: it is proposed to grant 3.
58 million shares to 188 employees at a grant price of 36.
36 yuan, and set revenue targets for 2022-2027 and start an assessment mechanism
for new clinical trials (including phase I-III clinical trials).
From the perspective of market reaction, in the five trading days since the announcement on October 16, Remegen's A shares and H shares have risen by 27.
93% and 21.
8% respectively, and the closing prices are 74.
47 yuan / share and 46.
65 Hong Kong dollars / share
, respectively.
Obviously, the capital market has voted for this equity incentive plan
.
However, compared with the short-term stock price performance, the focus of the market is mainly on where is the "confidence" of Remegen to complete the performance assessment?
01 2027 revenue target of 5 billion yuan, Remegen wants to create another "Tigermed Pharma"
01 2027 revenue target of 5 billion yuan, Remegen wants to create another "Tigermed Pharma" It is not difficult to see from the equity incentive plan and performance evaluation indicators that Remegen has lofty goals
.
.
Specifically, the number of restricted shares granted under this incentive plan is 3.
58 million shares, accounting for about 0.
6578% of the total share capital of the company of 544.
263 million shares at the time of the announcement of this draft incentive plan, and the grant price is 36.
36 yuan;
The objects of the incentive include directors, senior management, core technical personnel, other actual controllers and their families, foreign employees and other employees deemed necessary by the board of directors, with a total of 188 employees (accounting for 10.
91% of the total number of employees at the end of 2021);
91% of the total number of employees at the end of 2021);
The incentive method adopted is restricted stock, which is divided into class A rights and B interests according to different distribution principles, of which 873,050 class rights and interests are granted for the first time, 1,996,400 class B interests are granted, a total of 2,869,450 shares, and 710,550 shares
are reserved.
were reserved.
Allocation of restricted stock granted to incentive recipients (Source: Company announcement)
In order to meet the company-level performance appraisal requirements, the incentive plan sets up different assessment arrangements for Class A rights and B rights granted for the first time and reserved grants:
Among them, in terms of the first grant: the assessment year of Class A rights is 2022-2026, the assessment year of Class B rights is 2023-2026, if you want to achieve performance evaluation target A (100% of the company's ownership system), then the company's cumulative operating income in 2022-2026 is 750 million yuan, 2 billion yuan, 4 billion yuan, 7 billion yuan, 11 billion yuan (operating income is calculated based on the data contained in the consolidated statements, excluding the overseas licensing income of Tytacept, the same below), The cumulative number of clinical trials started is 6, 12, 20, 28 and 36.
This means that the operating income of Remegen from 2022 to 2026 will achieve 750 million yuan, 1.
25 billion yuan, 2 billion yuan, 3 billion yuan and 4 billion yuan respectively, with an expected compound annual growth rate of 39.
77%.
Among them, the revenue target of 4 billion yuan will be achieved in 2026, which is equivalent to creating another Junshi Biologics (total revenue of 4.
025 billion yuan in 2021).
77%
per annum.
Among them, the revenue target of 4 billion yuan will be achieved in 2026, which is equivalent to creating another Junshi Biologics (total revenue of 4.
025 billion yuan in 2021).
In addition, in terms of reservation and grant: the assessment year of Class A rights is 2023-2027, and the assessment year of Class B rights is 2024-2027, if you want to achieve performance evaluation target A (100% of the company's ownership system), then the company's cumulative operating income in 2023-2027 (accumulated from 2022, the same below) is 2 billion yuan, 4 billion yuan, 7 billion yuan, 11 billion yuan, 16 billion yuan, respectively, and the cumulative clinical trials are 12, 20, 28, 36, 44.
This means that the operating income of Remegen from 2023 to 2027 will achieve 750 million yuan, 2 billion yuan, 3 billion yuan, 4 billion yuan and 5 billion yuan respectively, with an average annual compound growth rate of 46.
14%.
Among them, the revenue target of 5 billion yuan will be achieved in 2027", which is equivalent to recreating one Tigermed (total revenue of 5.
214 billion yuan in 2021).
14%.
Among them, the revenue target of 5 billion yuan will be achieved in 2027", which is equivalent to recreating one Tigermed (total revenue of 5.
214 billion yuan in 2021).
Regardless of the equity grant method, if Remegen is to achieve strong growth of about 40% per year, it is necessary to actively expand the market potential of new indications for existing commercial products, as well as the growth value
of other pipeline candidates.
of other pipeline candidates.
02 New indications for commercial products continue to expand, gradually moving towards Biopharma
02 New indications for commercial products continue to expand, gradually moving towards Biopharma From the performance of previous years, from 2018 to 2020, Remegen achieved total revenue of 13.
275 million yuan, 4.
825 million yuan and 3.
044 million yuan respectively, and net profit of -270 million yuan, -430 million yuan and -698 million yuan respectively, which has been in a state of
loss.
The poor performance in the early years was mainly due to the lack of commercial products of Remegen as a biotech, coupled with the need to invest high research and development expenses, resulting in a gradual increase
in net profit loss.
However, in the past two years, with the commercialization of products (tetacept, vedicitumab) and the recognition of foreign pharmaceutical companies, Remegen has gradually moved
from biotech to biopharma.
from biotech to biopharma.
In 2021, Remegen achieved total revenue of 1.
426 billion yuan, a year-on-year increase of 467.
5 times, and a net profit of 276 million yuan, a year-on-year increase of 139.
6%.
Among them, 1.
291 billion yuan came from technology licensing, accounting for 90.
5%, mainly due to the company's receipt of a $200 million down payment
from Seagen in Seagen last October.
291 billion yuan came from technology licensing, accounting for 90.
5%
In August 2021, Seagen received an exclusive global (excluding Asia Pacific) license agreement
for the company's self-developed ADC drug vedicitumab for up to US$2.
6 billion (US$200 million down payment and up to US$2.
4 billion milestone payment) and a gradient sales commission from high single digits to more than 15%.
In terms of commodity sales, Remegen has two products, tetacept (RC18) and vedicitumab (RC48), which have been approved for marketing, and achieved revenue of 131 million yuan through the sale of goods in 2021, accounting for 9.
21%
of the total revenue.
Among them, tatacept was conditionally approved by the State Medical Products Administration (NMPA) in March 2021 for moderate to severe systemic lupus erythematosus (SLE), which does not respond well to standard treatment; At present, vedicitumab has been approved for 2 indications, namely the treatment of gastric cancer and urothelial cancer patients
who were conditionally approved by the NMPA in June and December 2021.
cancer and urothelial carcinoma.
In the first half of this year, Remegen achieved a total revenue of 350 million yuan, a year-on-year increase of 1033.
35%, of which commodity sales achieved revenue of 329 million yuan, accounting for 93.
8% of the total revenue, mainly due to the strong year-on-year growth in sales revenue and sales of commercial products tetacept and vedicitumab; Secondly, the revenue of technology licensing was 20.
1108 million yuan, accounting for 5.
74%.
8% of the total revenue.
Looking ahead, Remegen is expected to open up greater market space
as tetacept and vedicitumab continue to expand their indications, steadily develop their international business and verify their commercialization capabilities.
From the perspective of indication expansion, the company is currently carrying out clinical trials of tetacept for the treatment of 7 autoimmune diseases, among which monotherapy for recurrent neuromyelitis optica spectrum disease (NMOSD) and moderate to severe rheumatoid arthritis (RA) with poor efficacy of MTX are in clinical phase III.
, and are expected to be listed in 2024-2025; Primary Sjogren's syndrome (SS), immunoglobulin A nephropathy (IgA nephropathy), multiple sclerosis (MS), and myasthenia gravis (MG) are all in clinical phase II and are expected to be available in
2025-2027.
, and are expected to be listed in 2024-2025; All are in clinical phase II and are expected to be launched
in 2025-2027.
Then, according to the Frost & Sullivan & Southwest Securities Research Report, based on key assumptions such as the year of approval of each indication, the number of patients, and the annual treatment cost, it is predicted that the sales of tetacept from 2022 to 2026 will be 237 million yuan, 526 million yuan, 785 million yuan, 1.
256 billion yuan and 1.
795 billion yuan
, respectively.
256 billion yuan and 1.
795 billion yuan
respectively.
In addition, Remegen is currently developing new indications for vedicitumab for a variety of solid tumors, among which HER2 low-expression breast cancer in China, HER2-positive breast cancer with liver metastasis, combined PD-1 treatment of first-line urothelial carcinoma, and HER2-expressing urothelial carcinoma in the United States are all in the clinical phase III stage and are expected to be launched in 2024-2025; The combination of PD-1 in China for the treatment of perioperative HER2-expressing invasive bladder cancer, low HER2 and non-expressing urothelial carcinoma, HER2-expressing gynecological malignancies, HER2-expressing biliary tract cancer and HER2-expressing melanoma are all in the clinical phase II stage and are expected to be launched
from 2025 to 2027.
in 2025-2027.
Then, according to the research report of East Asia Qianhai Securities Research Institute, based on key assumptions such as the number of patients, the year of approval of each indication, market penetration, annual treatment costs, and overseas market sales share and licensing income, it is predicted that the total domestic revenue of vedicitumab from 2022 to 2027 will be 422 million yuan, 731 million yuan, 1.
082 billion yuan, 1.
276 billion yuan, 1.
52 billion yuan and 2.
002 billion yuan
, respectively.
082 billion yuan, 1.
276 billion yuan, 1.
52 billion yuan and 2.
002 billion yuan
, respectively.
03 Other pipelines under research are abundant, but most of them are still in the early stages of research and development
03 Other pipelines under research are abundant, but most of them are still in the early stages of research and development In fact, tetacept and vedicetumab are only two of the core products
developed by Remegen through three core technology platforms.
At present, Remegen has laid out three pipelines of antibody fusion proteins, ADCs, monoclonal antibodies and bispecific antibodies, covering the three major fields of autoimmune diseases, oncology and ophthalmology, and has developed more than 20 biological drug candidates, of which more than 10 biological drug candidates are in the stage of commercialization, clinical research or clinical research application (IND) preparation, all of which are targeted biological innovative drugs; Seven products that have entered the clinical trial stage are undergoing clinical trials for the treatment of more than 20 indications, including two products in the commercialization stage and 5 products in the clinical research stage
.
In the field of anti-tumor, in addition to vedicitumab (RC48), 11 products such as RC88, RC98, RC108, and RC118 have been laid out, and the drug types cover PD-L1, ADC and fusion
proteins.
However, except for RC48, most of the rest are in phase I clinical or preclinical stage
.
.
In addition to RC18 and RC48, Remegen's pipeline under research (source: company official website, Guojin Securities Research Institute) has laid out four product candidates in the field of ophthalmic diseases, RC28, RC208, RC218 and RC228, covering fusion proteins and nanobodies and other drug types
.
Among them, the fastest progress in research and development is RC28, and the three indications of wet senile macular degeneration (wAMD), diabetic macular edema (DME) and diabetic retinopathy (DR) have been advanced to the phase II clinical stage; The remaining 3 self-developed products are still in the preclinical stage
.
.
RC28 is the first bifunctional long-acting fusion protein targeting VEGF and FGF under research in China, and there are currently no dual-target anti-VEGF biologics for the treatment of wAMD and DME approved for marketing in China, only 4 single-target anti-VEGF biologics such as ranibizumab, aflibercept, combocept and broluzumab have been approved for marketing, and the first 3 have been listed in China and have been included in the national medical insurance directory
.
The main competitors of RC28 in China are Roche's dual-target RG7716 and Novartis' single-target RTH258, and the indications of these two drugs are in the phase III clinical stage and progress is relatively fast
.
According to the forecast of Huaan Securities Research Report, assuming that the two indications of AMD and DME of RC28 can be listed in early 2026, and the annual treatment cost refers to the pricing of Combocept (40,000 yuan before including medical insurance, and then reducing the price by 20% every two years), then the total domestic sales (after risk adjustment) in 2026 and 2027 will be 210 million yuan and 541 million yuan
.
.
In addition, the performance evaluation targets set by Remegen also include the initiation of new clinical trials (including phase I-III clinical trials), with a total of 36 and 44 in 2026 and 2027
, respectively.
If this goal can be achieved, it means that the company's R&D pipeline is already quite rich
.
However, it should be noted that the abundance of pipelines is only secondary, and the early project approval process determines the success or failure of the project, the time and cost
invested by the enterprise.
Therefore, not only quantity, but also commercial value is more critical
.
invested by the enterprise.
Therefore, not only quantity, but also commercial value is more critical
.
After all, in today's cloudy innovative drug rivers and lakes, the risk of the target, the clinical value and market prospect of the target, the existing market competition and the patents of the original research are all key points to grasp in the early stage of project establishment and are crucial
.
Conclusion: Looking at Remegen's R&D pipeline, it is not difficult to see that the products that can be approved for marketing and quickly contribute to performance before 2027 mainly depend on the expansion of new indications for tetacept and vedicitumab and the advancement of
overseas clinical trials.
overseas clinical trials.
During this period, Remegen also faced many factors such as other competitors and changes in market policies, which shows that it is difficult to formulate performance evaluation targets for equity incentive plans
.
But also as Qu Yuan said in "The Departure", "The road is long and long, and I will seek from top to bottom
.
" "Standing at the moment of the changes in the innovative drug industry and the struggle of Biotech to survive, it may be more necessary to have the "courage" to face the difficulties
.
