Baekje burned 50 billion of confidence, which is the value moat in Zhang Lei's eyes

For pharmaceutical companies that want to go public, 2021 is not a good year, especially compared with the previous year
.

Needless to say, the overall downward trend of the pharmaceutical sector is not necessary.
Many innovative pharmaceutical companies have not even touched the threshold of the science and technology innovation board
.

We have no intention to characterize these companies, but this phenomenon shows that at least the Science and Technology Innovation Board itself is more and more clearly positioning itself as a gatekeeper on the dividing line between innovation and money, rather than a greenhouse for incubating companies with innovation labels

At least the Science and Technology Innovation Board itself is more and more clearly positioning itself as a gatekeeper on the boundary between innovation and money, rather than a greenhouse for incubating companies with innovation labels

To be listed on the Sci-tech Innovation Board, platform-based companies need to serve the society and accept supervision, while other companies need self-certified innovation
.

From this perspective, it is still inconclusive.

As the first company in history to be listed in Shanghai, Hong Kong, and the United States, the speed of listing also reflects the speed at which Baekje is burning money.
The IPO financing line of 22.
2 billion yuan, even if it is not limited to the medical and health field, is an eye-catching figure
.

So far, BeiGene's total financing has exceeded 50 billion yuan, and it continues to be in a state of loss.
The title of " money burning machine " awarded by shareholders also comes from this
.

Money burning machine

But obviously, the Sci-tech Innovation Board's judgment on the nature of BeiGene's innovation is not the same as the jokes in the market
.

50 billion, moat and value

50 billion, moat and value

The biggest detour in Apple’s founder Jobs’ life may be that the CEO Sculley, who was personally invited, was driven out of his board of directors, but this does not prevent his golden sentence from being handed down: " Do you want to sell sugar water for a lifetime, or change the world with me?" ? "it is this sentence so that Sculley resigned from the post of Pepsi, to join Apple
.

Do you want to sell sugar water for a lifetime, or change the world with me?

This is also the first fate between Coke and Apple
.

The second time there is a well-known intersection between the two is that Buffett, who is known for value investment, bought Apple stock that he didn't understand, and the most popular investment target of the stock god before was Coca-Cola

Value investing has always been regarded as the norm by the fans of the stock gods.
They believe that this is an investment theory that values ​​company performance rather than stock price fluctuations, pursuing to cross the cycle and claiming to be non-speculators
.

But obviously this is not just a misunderstanding of Buffett, but also a misunderstanding of the market and value

In Buffett's eyes, the core of value is not profitability, but whether the company can build a moat of core competence
.

Zhang Lei, who has won the mantle of value investment, expounded and upgraded it to the concept of " dynamic moat " in the book "Value"

Whether the company can build a dynamic moat of core competence

In other words, in the eyes of Buffett or Zhang Lei, Coca-Cola’s moat is not a secret recipe for black sugar water, it is the ability to sell sugar water to any corner of the earth, and even when the bottle is taken out, there is still water droplets on the bottle
.

Coca-Cola’s moat is not the secret recipe for black sugar water, it is the ability to sell sugar water to any corner of the earth, and even when it is taken out, the bottle body still contains water drops.

Apple’s moat does not sell a similar-looking smartphone every year, but can find the latest technology in the global industrial chain for integration in the fastest time, and mobilize suppliers from dozens of regions within a few months.
The ability to collaboratively produce billions of devices and distribute them to all corners of the world
.

The ability to discover the latest technology in the global industrial chain for integration in the fastest time, and to mobilize suppliers from dozens of regions within a few months to jointly produce more than one billion devices and distribute them to all corners of the world

This kind of accessibility is far broader than the professional terms of the pharmaceutical industry, including the complex causal chain in the manufacturing, supply chain and industrial ecology, the proficient judgment of trends and the psychology of users (patients), and the grandeur beyond the times.
Vision
.

For a company that wants to change the rules of the game, 50 billion is not too much, but too little.
It is just a qualification for the first round of the table .
Zhang Leishen, who has never been absent from Baiji’s previous financing and continued to raise Know this
.

50 billion is not too much, but too little.
It is just a qualification for the first game of the table.

Does Baekje meet the above criteria?

Internal volume: License in/out and Zebutinib

Internal volume: License in/out and Zebutinib

Zebutinib is one of the few products that BeiGene is currently on the market and is profitable, and it is also a competitive product that BeiGene has high hopes for
.

As the first Chinese innovative drug approved by the FDA, what really reflects Zebutinib's strategic position in BeiGene is the following data

Since 2019, Baiyueze® has obtained 12 approvals in 40 countries and regions :

12 approvals in 40 countries and regions

*Including accelerated approval and conditional approval, data source company announcement, picture source NextPharma®

At the same time, Zebutinib has so far submitted more than 20 marketing applications for multiple indications
.

This is not just as simple as buying a drug in 40 countries or regions.
It means that BeiGene has already opened up a clinical + application channel covering more than 3 billion people through a product of Zebutinib.
The last link of sales can deliver medicines to patients of different skin colors, languages, and races
.

This may be the most valuable moat in Baekje in Zhang Lei's eyes

China economy has been through a product Zerbe imatinib, opened the cover over three billion people reporting clinical + channels, differing only in the last part of this sale, we will be able to medicines into different colors of different races in different languages of the patient one hundred The most valuable moat

According to the data of Medical Rubik's Cube, Hengrui and Cinda are simultaneously compared
.

Baekje has never been absent from the core clinical advancement in Europe and the United States from 2017 to 2021; in comparison, Cinda only has core clinical trials in Europe, America and Japan in 2018; and Hengrui, which has declared up to 34 core clinical trials in China in 2021, In the past 5 years, there are only 4 core clinics in Europe, America and Japan

Hengrui core clinical number

BeiGene core clinical numbers

Cinda Bio's core clinical numbers

*The definition of core clinics in the NextPharma database of Medicine Rubik's Cube: Including registered phase III clinical trials, single-arm phase II clinical trials and high-quality research initiated by researchers

Everyone’s >
.

In the past two years, internal scrolling has become a major trend in society
.
Any price war, homogenization, must be called inward roll, but the market has become richer, but the growth rate has to slow down, and there are fewer and fewer good targets, so people begin to worry
.

However, internal scrolling does not need to be demonized.
The above characteristics are actually an objective description of a mature economy.
Internal scrolling is nothing but a transition (not excessive) anxiety to enter a mature market and mature economic period
.

The internal volume is nothing more than a transition (not excessive) anxiety to enter a mature market and a mature economic period.

In such an environment, spending 50 billion to maintain an average of more than 7 phase III clinical advances each year.
It cannot be said to be reasonable, but to be realistic.
At the same time, in such an environment, it is also willing to spend 50 billion to cultivate ecology, not The subject of a ticket is also worthy of the dual certification of the Sci-tech Innovation Board and Zhang Lei
.

Upside-down: "Dynamic" and Innovation

Upside-down: "Dynamic" and Innovation

Another major feature of the internal volume is the first-level and second-level valuation inversion .
Due to the scarcity of high-quality targets and the single hot spot, the occurrence of the first-level and second-level valuation inversion has become a normal and reasonable phenomenon, so there will be more and more breaks in the future.
It is not worthy of surprise or pessimism
.
And since it is within the volume, most violent breaking up is to outgrowth
.

Since the first and second valuation upside down is an inward roll, the most crude way to break the game is to grow outward

If calculated from the single factor of sales, there is no difference in order of magnitude between 20 indications for 3 billion people and 34 indications for 1.
4 billion people
.
But when we talk about China, we always talk about "characteristic national conditions", specifically, medical insurance negotiation and centralized procurement
.

Under the premise of our background, similar to state-owned enterprises whose profits are turned over to the state treasury, the pharmaceutical industry is a special strategic reserve industry in a sense that is directly responsible for the health of the people
.
Therefore, whether it is medical insurance negotiation or mass purchase, the core is to let patients have medicines to buy and afford them
.

This is of course the highest vision of every caring pharmaceutical man in the world, but for Chinese pharmaceutical companies in the market environment at this stage, they bear such a responsibility, even if there is no internal volume, losing profit space means losing The opportunity to grow into an MNC means that the future may be left behind in R&D investment
.

At first, Baekje’s internationalization strategy seemed to have chosen the most difficult, farthest and most dangerous path, but at this time it suddenly turned around.
In the face of competition from domestic companies, Baekje will gain the profit advantage of free pricing in overseas markets ; In the global competition, we can use large-scale domestic purchases to obtain insurmountable production cost advantages
.

But at this time, there was a sudden turn of events.
In the face of competition from domestic companies, Baekje will gain the profit advantage of free pricing in overseas markets.

This core competitiveness acquired following changes in trends fits Zhang Lei's definition of a "dynamic" moat.
From this perspective, Baekje is Zebutinib from the top
.

Baekje is Zebutinib from Hillhouse

In the end, even Baekje has not fully implemented its business model, let alone reshaping the ecology
.
This is also the biggest risk that Baekje faces.
After choosing a marathon, it is natural not to sprint at the speed of 100 meters
.

Choosing a marathon, naturally you can’t use the 100-meter sprint speed for the entire journey

As for the entire Chinese pharmaceutical industry, even if there is no medical insurance negotiation and centralized procurement, the internal volume will still come.
The way to really avoid the internal volume is to flourish basic scientific research and source innovation .
Just imagine if mRNA technology and gene editing technology Emerging in China, will we still lack Moderna and Editas? However, the scope of discussion on this topic has gone far beyond medicine itself
.

The real way to avoid involution is to flourish basic scientific research and source innovation.