"API + core preparation" walks on both legs West Point Pharmaceuticals landed on the Growth Enterprise Market

On February 14, West Point Pharmaceutical, a registered new stock, officially landed on the A-share Growth Enterprise Market, with an issue price of 22.

Source: Oriental Fortune

According to the prospectus, if the actual funds raised this time cannot meet the funding needs of the project, West Point will make up for the funding gap through self-raised funds to ensure the normal implementation of the project

The main income comes from three core preparations

West Point Pharmaceuticals was established in 2001, focusing on the research and development, production and sales of chemical raw materials and preparations.

As of the publication date, the issuer has drug registration approval documents for 22 preparation varieties (27 specifications) and 16 API registration approval documents

Yiyuansheng has a national invention patent and has won the national Torch Program project certificate; it is the first risperidone drug in China that has obtained the registration approval of risperidone orally disintegrating drug and is listed; escitalopram oxalate tablet belongs to anti- Depression drugs, of which 10mg and 5mg, have passed the quality and efficacy consistency evaluation of generic drugs

In 2018, 2019, 2020 and January to June 2021, the total sales revenue of Yiyuansheng, Ketong and Escitalopram Oxalate Tablets accounted for 92.

Chart: Average selling price of West Point's core products (unit: tablet/yuan) Source: Prospectus

In terms of chemical raw materials, daphnetin capsules belong to the circulatory system.

Table.

Source: Prospectus

From the analysis of operating income, the operating income of West Point Pharmaceuticals has remained stable in recent years, with a flat growth trend

Figure.

Source: Prospectus

Market analysis of APIs and chemical preparations

In 2021, the operating income of industrial enterprises above designated size in China's pharmaceutical manufacturing industry will be 2,390.

Figure.

Chemical raw materials and chemical preparations are the two largest pharmaceutical sub-sectors in China

In the field of APIs, China has become the world's largest producer and exporter of APIs, playing an increasingly important role in the global pharmaceutical supply chain

In the global market, China has a complete variety of raw materials and has a price advantage.

In terms of chemical preparations, the market has maintained steady growth in recent years

Figure.
2008-2018 China's chemical pharmaceutical preparation industry's main business income change growth rate, source: NMPA Southern Institute

In the future, China's chemical pharmaceutical preparation industry will enter a stage of rapid differentiation, structural upgrading, and elimination of outdated production capacity.
The state encourages independent innovation and accelerates review and approval, while further strengthening supervision and intensity to promote orderly competition in the industry and survival of the fittest
.

The layout of West Point Pharmaceuticals in market segments

In the field of anti-anemia drugs, the prevalence of anemia among Chinese residents has declined slightly in recent years
.
The data show that in 2012, the anemia rates of children and pregnant women aged 6-11 were 5.
0% and 17.
2%, respectively, down 7.
1 and 11.
7 percentage points from 2002
.
However, the prevalence of anemia in the elderly increases rapidly with age.
At present, the incidence of anemia in women and men over 65 years old in China is about 21% and 16%, respectively.
The incidence of anemia in the elderly over 85 years old is the highest.
Anemia accounts for about 15% to 30% of anemia in the elderly, and the situation of iron deficiency anemia in the elderly in China is relatively severe
.
With the intensifying trend of population aging in China, the demand for iron-deficiency anemia treatment in the elderly will expand in the future
.

Figure.
Hospital sales and growth of iron-containing anti-anemia drugs from 2014 to 2019, source: NMPA Southern Institute

The main indication of Yiyuansheng treatment of West Point Pharmaceuticals is iron deficiency anemia
.
According to reports, the brand has a market share of 5-6% in the hospital market for the treatment of iron deficiency anemia in China from 2017 to 2019, ranking fifth overall
.

Fig.
2017~2019 Yiyuansheng's sales proportion and ranking in the hospital market

In the field of antipsychotic drugs, the prevalence of mental disorders in China has been on the rise for many years
.
From 2014 to 2019, the total size of China's mental disorder drug market continued to grow, from 12.
417 billion yuan in 2014 to 22.
937 billion yuan in 2019, with an average annual compound growth rate of 14.
42%.
In 2017 and 2019, mental disorders The growth rate of the drug market has increased significantly
.
From the perspective of the use of mental disorders, in recent years, the sales of antipsychotic drugs and antidepressant drugs together account for about 95% of the total market share of mental disorder drugs
.

Fig.
2014~2019 my country's overall market and sales of drugs for mental disorders, source: NMPA Southern Institute

As a new generation of antipsychotic drugs, risperidone has accounted for about 13%-15% of the market share of antipsychotic drugs in China in the past three years, and about 7% of the market share of drugs for mental disorders in China
.
According to the data of the NMPA Southern Institute, in 2019, among the major manufacturers of risperidone preparations in China, the sales of the top five enterprises all exceeded 100 million yuan
.
Among them, Xi'an Janssen Pharmaceutical Co.
, Ltd.
ranked first with three dosage forms: tablet, oral solution and injection microsphere powder
.
Shandong Qilu Pharmaceutical Co.
, Ltd.
ranked second in the market with tablets
.
West Point's risperidone orally disintegrating tablet ranked fifth in sales
.

Table.
my country's risperidone preparation market from 2017 to 2019

Market share of major manufacturers, source: NMPA Southern Institute

Escitalopram oxalate is an ideal antidepressant.
After 2017, its sales increased significantly, from 1.
603 billion yuan in 2017 to 2.
119 billion yuan in 2019.
It has become the No.
1 antidepressant drug market in sales.
variety
.
According to the data of the NMPA Southern Institute, the main domestic competitors of West Point Pharmaceuticals in the production of escitalopram oxalate are Lundbeck Pharmaceuticals, Jingwei Pharmaceuticals and Kelun Pharmaceuticals, which are far behind the TOP3 manufacturers
.

Table.
Market shares of major manufacturers of escitalopram oxalate tablets in my country from 2017 to 2019, source: NMPA Southern Institute

In the API market field that West Point Pharmaceuticals is involved in, one of the core products - sodium ferulate has a wide range of effects in cardiovascular and cerebrovascular diseases, in the treatment of respiratory diseases, diabetes and its complications, protection of liver and kidneys, etc.
is also more effective
.
At present, sodium ferulate has been widely used in clinical treatment of cerebral ischemic diseases, coronary heart disease, angina pectoris, diabetic vascular disease, diabetic nephropathy with heart failure and other diseases, and has a prominent role in the treatment of cardiovascular and cerebrovascular diseases
.
At present, there are mainly eight manufacturers of sodium ferulate API in China, and West Point Pharmaceutical is one of the few manufacturers
.

The important raw materials of Yiyuansheng are ferrous fumarate and ferrous sulfate, both of which are common iron supplements for the treatment of iron deficiency anemia
.
At present, West Point Pharmaceutical has been able to realize the large-scale production of ferrous sulfate raw materials; the original Daphnetin was proposed from Changbai Ruixiang, which has been artificially synthesized, and has the functions of dilating coronary blood vessels, increasing coronary flow, reducing myocardial oxygen consumption, improving myocardial metabolism, Promote the recovery of cardiac function and anti-thrombotic effects
.
At present, there are four domestic manufacturers of ferrous fumarate raw materials, and three domestic manufacturers of ferrous sulfate raw materials, including West Point Pharmaceuticals
.

West Point Pharmaceutical is the exclusive domestic manufacturer of daphnetin APIs, but according to the prospectus, its self-developed patent titled "A New Process for Synthesizing Daphnetin" will expire at the end of March 2026.
After the patent expires The sustainability of profitability will be questionable
.

summary

In general, West Point Pharmaceuticals, a new listed company listed on the registration system, has created a business model of “APIs + preparations” that integrates R&D, production and sales.
Some core preparations can firmly rely on their own API production capacity to provide product sales.
Strong competitiveness, but on the other hand, it can be seen that the current revenue is too concentrated, the original patents are facing expiry, and the new product research and development has not yet been connected and other risks
.
In addition to listing and raising funds to expand existing production capacity and occupy market share, West Point Pharmaceuticals should also consider increasing the proportion of research and development, continue to innovate, and continue to enhance its development potential
.