Black swans have hit the pharmaceutical sector hard, with the market value evaporating by more than $150 billion in four days

(Quality issues have hit pharmaceutical companies' share prices hard.) Since July 16th, Evers life's share price has fallen four times, with more than $8bn in market capitalisation in the air. At the same time, in the four trading days from July 16 to July 19, the market value of the pharmaceutical sector also fell by a total of 150.8 billion yuan
. According to the first financial statistics, there are currently 287 listed companies in the pharmaceutical sector, from January 2018 to July 13, this year, the A-share market pharmaceutical bio-sector rose 8.5%. The
swan" incident in the A-share market always seems to come too late to prevent. This time, the main character is the pharmaceutical stocks that have been walking cattle for three years.
in the first half of July 2018 alone, two A-share pharmaceutical listed companies had quality problems. On July 7, Huahai Pharmaceuticals blew itself up as "home ugly": unknown impurities with genotoxicity were detected in the product. A week later, rabies vaccine leader Changsheng, during a flight inspection by the State Drug Administration, was found to have recorded fraud in the production of rabies vaccine by freeze-dried human beings.
2016, pharmaceutical listed companies have several product quality problems. In March 2016, an illegal vaccine case occurred in Shandong Province, and listed companies such as Watson Bio and Yan Yan Pharmaceuticals were involved in the case to varying degrees. In the "Wei Tracy Incident" in May 2016, listed companies were also passively involved. In May 2018, Changshan Pharmaceuticals also attempted to influence the share price through drug-related disclosures.
product quality events often hit the performance of these listed companies hard. According to the announcement, Changsheng's 2018 operating income will be reduced by 740 million yuan, rabies vaccine may not be collected. Watson Bio's involvement in the vaccine case resulted in a huge loss of nearly $900 million in 2015 and another $537 million in 2017.
not only that, but quality problems have hit pharmaceutical companies' share prices hard. Since July 16th, Eversy's share price has fallen four times, with more than $8bn in market capitalisation in the air. Meanwhile, the market value of the pharmaceutical sector fell by 150.8 billion yuan in the four trading days from July 16 to July 19.Pharma industry black swan frequency
July 15, 2018, the State Drug Administration (the "National Drug Administration") issued a notice: the Bureau through the report of clues, the organization of Changsheng Biotech Co., Ltd. ("Changchun Changsheng") Changsheng Biotech Co., Ltd. ("Changchun Changsheng"), found that Changchun Changsheng freeze-dried human rabies vaccine production record fraud and other acts.
July 16, Changsheng Bio issued a notice that the flight inspection involved in the batch of products, has not yet been factory and market sales, all products have been effectively controlled. At the same time, in order to ensure the safety of medication, all batches of freeze-dried human rabies vaccine (vero cells) are being recalled.
this is not the first time that long-term organisms have experienced product quality problems. According to the disclosure information, in November 2017, Changchun Changsheng produced a batch number of 201605014-01 and another enterprise's batch of Baibai-breaking vaccine, was found to be effective price indicators do not meet the standard requirements. Among them, Changchun Changsheng this batch of white broken vaccine a total of 2526 million, is expected to achieve sales revenue of about 8.34 billion yuan.
recent years, permatic organisms are not the only pharmaceutical companies with quality risks. In the last less than half a month, the pharmaceutical and medical industry events are frequent, Huahai Pharmaceuticals, Huada Gene and many other listed companies, one after another diagnostic disputes or quality problems, causing high social concern.
According to Huahai Pharmaceuticals disclosed on July 7th, the company's optimization and evaluation of the production process of the raw materials of nitrate tan, under the unknown impurities, found and detected an unknown impurity is nitrodi methamphetamine (NDMA), although the content is very small, but according to the relevant animal experimental data, the impurities contain genotoxicity.
from July 9 to 15, Huahai Pharmaceuticals announced three times in a row that the company provided the European and domestic market raw materials for salatin, there are also NDMA impurities. In order to guard against risks, the company decided to implement an active recall of the raw materials of the drug, as well as the preparation products of the raw material of the drug, which are listed at home and abroad.
not only the above-mentioned companies, in the last two years, the medical and pharmaceutical industry black swan incidents continue, there are listed companies involved. In May 2016, baidu and Yantian hospitals were subjected to public opinion torture after the Wei Tracy incident was exposed, and Zhongyuan Concord was also involved in the Wei Tracy incident because of the planned acquisition of the "Yutian System" company.
earlier in the Shandong illegal vaccine case, more listed companies involved. In March 2016, Shandong police cracked a case of illegal vaccine worth up to 570 million yuan, which was sold to 24 provinces and cities without strict cold chain storage and transportation. The vaccine contains 25 kinds of children, adults with secondary vaccines, Watson Biology, Yan Yan Medicine and other listed companies, are involved in the case to varying degrees.
the pharmaceutical industry, not limited to product quality, individual listed companies also through drug-related information disclosure, trying to influence the secondary market share price.
May 15, 2018, Changshan Pharmaceuticals announced that due to the subsidiary's access to the drug GMP certificate, commonly known as "Viagra acid sidna non-tablets" can be officially put into production and market sales, and said that the product adapts to the number of domestic patients about 140 million people, the potential market size is expected to reach 10 billion yuan. Over the next two days, Changshan Pharmaceuticals' share price rose more than 20%, and its chairman and executives took the opportunity to sell off their holdings, with a cumulative cash-out of 87.65 million yuan.
's data on 140 million ED patients in China, claimed by Changshan Pharmaceuticals, were not from objective investigations or published by authorities, but from a May 2014 study by a brokerage company obtained by an online search. On June 24, the CSRC found that Changshan Pharmaceutical Co., Ltd. had violated the law, and proposed to issue a warning to Changshan Pharmaceutical Co., Ltd. and its chairman and secretary of the board of directors, and fined it a total of 1.2 million yuan.performance has been hit hard
product fraud, quality problems, often hit the income and profits of listed companies. Some of the enterprises involved in the deeper issue, after the incident, operating income, profit cliff-edge decline.
Changsheng Bio announced on July 18 that it expects to reduce first-half operating income by about 200 million yuan and net profit by about 140 million yuan due to a recall of all batches of freeze-dried human rabies vaccines during the validity period. First-half net profit forecast, also from the original 343 million yuan to 423 million yuan, revised to 211 million yuan to 317 million yuan, from the expected year-on-year growth of 30% to 60%, reduced to a range of -20% to 20%.
of rabies vaccines and recalls have had a greater impact on permatic organisms throughout the year. According to the company's announcement, the vaccine recall is expected to reduce operating income by about $540 million in the second half of 2018. Combined with $200 million in the first half of the year, Changsheng Bio's full-year operating income will be reduced by $740 million.
$740 million in rabies vaccines, which could lead to the loss of the long-term organisms business in 2018. Data show that in 2016 and 2017, Changsheng Bio's operating income was RMB1,017 million and RMB1,553 million, respectively, and net profit was RMB424 million and RMB566 million, respectively.
, rabies vaccines are also a profitable support for living things. In 2017, the product's gross margin was 92.7%, up 10.02 percentage points year-on-year, the highest among all products, contributing about 650 million yuan in gross profit. Based on static gross margin calculations, peri-life organisms will have a full year of 680 million yuan of gross profit ash smoke.
data show that the main use of the treatment of mild, moderate primary hypertension, Huahai Pharmaceuticals raw materials are mainly sold to North America, Europe, India, Russia and South America and other markets, related raw materials, preparations revenue, although relatively low, but the impact of the recall can not be underestimated.
, according to the disclosure data, in 2017, the company's sales of sartan raw materials about 330 million yuan, preparation sales revenue of 20.43 million U.S. dollars, or nearly 130 million yuan, a total of about 460 million yuan. Annual report data show that in 2017 its sartan raw materials sales revenue of 939 million yuan, even if not taking into account the European and domestic markets, the recall of products amounted to more than 1.06 billion yuan.
2017, Huahai Pharmaceuticals' operating income was RMB5,002 million, up 22.21% YoY, and net profit was RMB639 million, up 27.64% YoY. The 1.06 billion yuan recall is about 20% of its operating income for the same period. In the same period, the gross profit margin of the preparation was 46.87 percent and 66.78 percent, respectively.
addition to direct recall losses, compensation is also involved. More seriously for permatic organisms, their product certificates have been regulatoryly withdrawn. Some brokerage pharmaceutical industry analysts have previously on the first financial analysis, this event will bring about the impact of life-long life is still unknown. Whether the future of long-term organisms still have the qualifications to produce rabies vaccine is not determined, whether to pay dealers in this incident of loss, it is also indeterm.
Huahai Pharmaceuticals said in a statement that in accordance with the original process of production of raw materials, has not been used in preparation products, if not in line with industry standards, may face the risk of customer requirements for return and exchange; Losses from the recall, which cannot be accurately estimated at this time, may face compensation losses arising from the suspension of supply in the U.S. market.
problems in the quality of products of pharmaceutical enterprises, operating income and profits often fall off the cliff. Watson Bio's 2015 operating income of about 1 billion yuan, affected by the vaccine case, net profit from an estimated loss of about 390 million yuan, to a huge loss of 898 million yuan. In 2016, its operating income fell to 591 million yuan, down 41.25 percent year-on-year, although the profit reversed to 70.45 million yuan, but the good times are not long, in 2017 the company's operating income is still only 668 million yuan, the profit is a huge loss of 537 million yuan.pharmaceutical sector market value fell by 150 billion
pharmaceutical companies in quality problems, in addition to the most important safety issues, but also directly impact the stock price. Shares of listed companies with such problems have plummeted without exception.
shares of Huahai Pharmaceuticals also fell after the market opened on July 9. It had fallen 7.22 per cent in the previous session. As of the close of trading on July 19, Huahai Pharmaceuticals was trading at 21.02 yuan, the biggest drop of the day at 6.8 per cent, and the recent cumulative decline has been more than 15 per cent.
July 19, Changsheng continued to fall and stop, at 16.11 yuan. Since July 16th, its share price has fallen four times in a row. Based on the closing price of 24.55 yuan on July 13, Changsheng has now lost 8.44 yuan and lost more than 8.2 billion yuan in market value.
is yet to be seen whether the living creatures will be able to stop falling. So far, seven fund companies have lowered their valuations. Among them, Anxin, Teda Manuly, China Merchants, Guangfa four down to 16.11 yuan, Yifangda, Jiutai, Bo time three are down to 14.5 yuan, which means that the stock may have a fall.
, Huahai pharmaceutical industry, long-term organisms also rose significantly. Since the end of September 2015, Huahai Pharmaceuticals has continued to gain ground, reaching a high of 35.79 yuan in May 2018, a cumulative increase of 2.22 times. During this period, the company was transferred by 10:3, the cumulative increase after the resumption of rights of about 2.8 times. In May 2018, the unit was again transferred by 10:2. Since the resumption of rights, the cumulative increase has also been close to 90%, and the growth rate of Changsheng Bio from February to May 2018 has also reached about one-fold.
According to first financial statistics, there are currently 287 listed companies in the pharmaceutical sector, from January 2018 to July 13, this year, the A-share market pharmaceutical bio-plate rose 8.5%, during which the highest overall valuation of 41 times, far better performance than the A-share market. Over the same period, A-shares fell 7.9 per cent.
recent series of events, pharmaceutical stocks have been volatile, as of July 19, the pharmaceutical sector fell 3.46 percent, down more than A shares, the sector valuation of 34 times. The share price fell by 207, or more than 70 per cent, between July 16 and 18. The market value of the pharmaceutical sector fell by 150.8 billion yuan in the four trading days from July 16 to July 19. (First Financial Daily)