Commercialization test transcript: 34 18A pharmaceutical companies have revenue of 25.3 billion yuan and 60% have experienced market value shrinkage

In 2021, the 18A biotechnology company in Hong Kong stock market will gradually realize the innovation results

In the past month, the 2021 results of Hong Kong-listed pharmaceutical companies have almost been announced one after another.

However, as the trend of "squeezing the bubble" in 2021 becomes more prominent, the total market value of 34 18A biotechnology companies in 2021 will shrink by HK$19.

In terms of R&D expenses, 18A biotechnology companies are also continuing to accelerate.

At the same time, with the accelerated upgrade of innovation level, the cooperation of BD projects has become more popular.

01 Commercialization: The innovation achievements of leading enterprises are emerging

In 2021, 26 of the 34 18A biotech companies achieved revenue, with a total revenue of 25.

The highest annual revenue is BeiGene, with annual revenue of 1.

The realization of innovation achievements has become the main driving force for their revenue growth

Half of BeiGene's revenue comes from commercial product contributions

Another product, BTK inhibitor zanubrutinib, shows that BeiGene’s internationalization process is moving towards independent commercialization.

The turnaround of CanSino in 2021 is mainly due to the approval and commercialization of its new crown vaccine at home and abroad

The most important boost to Junshi Bio's performance in 2021 is the neutralizing antibody ectelizumab, which is cooperating with Eli Lilly.

However, Junshi's PD-1 sales are not optimistic.

Innovent's product revenue will reach 4 billion yuan in 2021, a year-on-year increase of 69%, and its commercial product portfolio has reached 6 models, of which the sales growth of the PD-1 product sintilimab is the main driving force for performance growth.

The high sales growth of Cinda is not unrelated to the expansion of its commercialization capabilities.

The head biotechnology companies are transforming into Biopahrma, and the "small and beautiful" companies in 18A are also gradually commercializing their products

As a leading company in the domestic ADC field, Rongchang Bio will achieve operating income of 1.
426 billion yuan in 2021, of which technology licensing revenue from HER2 ADC drugs will be 1.
291 billion yuan, and product sales revenue will be 131 million yuan
.

Hua Medicine, which focuses on the field of diabetes, also took a key step in 2021, submitting a new drug application for Dorzagliatin for the treatment of type 2 diabetes to the NMPA for acceptance
.

Ascentage Pharma, which focuses on apoptosis, has entered the commercialization stage with the approval of its first product, Orebatinib, in November 2021
.
On the one hand, Zhu Gang, the former general manager of Celgene China, was hired as the chief commercial operation officer (CCO), and a commercialization team was formed for it.
At the same time, it also signed strategic cooperation with leading domestic dealers and distributors
.

02 R&D: Baekje continues to lead, and Clover's R&D expenses have increased by 7 times

The research and development of 18A Biotechnology Company is regarded as one of the epitome of the development of the domestic innovative drug industry
.

In the past year, 34 biotechnology companies have invested more than 30 billion yuan in research and development, reaching 33.
425 billion yuan, and the average growth rate of research and development expenses has reached 41%
.

R&D investment is an important indicator to measure the R&D level of innovative pharmaceutical companies.
The increase in R&D investment also represents a pharmaceutical company's entry into an accelerated period of innovation to a certain extent
.

Overall, among the 34 biotechnology companies, BeiGene leads the way with R&D investment of 9.
308 billion yuan
.

There is no doubt that BeiGene is still the best
.
In 2021, Baiji's R&D investment will reach 9.
308 billion yuan, a year-on-year increase of 4%
.
Although the increase in R&D investment has slowed down, as of the press date, BeiGene is still firmly in the top spot in domestic innovative drug R&D investment
.
From the perspective of R&D expenditure in 2020, only BeiGene has invested more than 5 billion yuan in domestic R&D
.

The annual report shows that BeiGene has nearly 50 clinical-stage candidates and commercial-stage products, and its R&D pipeline covers various types such as small molecule drugs, monoclonal antibodies, double-antibodies, and ADCs
.
Behind the continuous deployment of new targets and new technologies, strong R&D support is required
.
At present, Baiji has a huge R&D team of more than 2,900 people as the "engine" of the company's R&D
.
Among them, the global clinical development team has reached 2,200 people, and the scale of the development team in the field of oncology is even comparable to that of large multinational pharmaceutical companies
.

In terms of global clinical development programs, as of the end of 2021, BeiGene has more than 100 planned or ongoing clinical trials in more than 45 countries and regions, including 38 Phase III or potential registration-available clinical trials
.
Global R&D also promotes BeiGene to integrate with international standards more quickly
.
According to the annual report, the company expects to update the results data of Baiyueze in a global head-to-head pivotal trial this year, achieve the approval of Baiyueze for CLL indications overseas, and plans to add approvals in more than 10 other countries.

.
In addition, the target decision time of the PD-1 drug Bai Zean's first listing application in the FDA is July 12, and it is expected to achieve the first overseas market this year
.
According to statistics, since 2015, Baiji's R&D investment has reached about 31.
6 billion yuan
.

Although Baekje is the only company that has invested more than 5 billion yuan in R&D, among the 18A companies this year, the number of club members with R&D exceeding 1 billion yuan has increased from 4 in 2020 to 7
.
In addition to BeiGene, six pharmaceutical companies including Zai Lab, Innovent Bio, Junshi Bio, Clover Bio, Kangfang Bio, and Henlius have invested more than 1 billion yuan in research and development in the past year
.

The R&D investment has increased by 152%, and Zai Lab has become the "Gold Burning King" second only to Baekje among the 18A companies with an R&D investment of 3.
655 billion yuan
.
Clover Bio, Kangfang Bio, and Fuhong Henlius entered the "R&D over 1 billion club" with R&D investment of 1.
826 billion yuan, 1.
123 billion yuan and 1.
024 billion yuan respectively
.

It is worth noting that Clover Bio, which just landed on the Hong Kong stock market on November 5 last year, will increase its R&D investment by 701% in 2021, which is the highest increase among all 18A biotechnology companies that have disclosed their annual reports
.
The previous prospectus showed that Clover Bio is a global biotechnology company in the clinical trial stage.
It was established in 2007 and has not yet achieved profitability
.

In September last year, Clover Bio's recombinant protein COVID-19 vaccine candidate SCB-2019 (CpG 1018/aluminum adjuvant) obtained positive results of Phase II/III clinical trials on efficacy and safety, becoming the first batch of randomized double-blind clinical trials One of the new crown vaccines that has demonstrated significant protective efficacy against the Delta strain
.
From a technical point of view, the biggest attraction of Clover Bio is its innovative Trimer-Tag™ (protein trimerization) technology platform
.
The technology, invented by company founder Dr.
Liang Peng, can be used to develop dozens of new vaccines and biotherapeutics
.
The SCB-2019 new crown vaccine candidate was developed based on the technology platform of trimerization
.

Except for Clover Bio, which has doubled its R&D expenditures, a total of 30 18A biotechs will increase their R&D expenditures in 2021
.
Among them, Beihai Kangcheng, Yongtai Bio, Connoya, Sinopharm, Zhaoke Ophthalmology, Zai Lab, Kintor, and CanSino Bio have all achieved an increase of over 100% in R&D expenditure
.

Of course, it's not all biotech that sees growth in R&D spending
.
The R&D investment of four other biotechs has been reduced to varying degrees, including TOT BIOPHARM, Jiahe Biotechnology, Hua Medicine and Tengsheng Boyao
.
Among them, the largest decline is Tengsheng Boyao, whose R&D investment in 2021 will drop by 44% year-on-year compared with 2020
.

Regarding the reason for the significant reduction in R&D expenditure, Tengsheng Biopharma stated that due to the reduction of third-party contracting costs related to the new crown R&D project, the company's R&D expenditure was reduced by 44%
.
Tengsheng Biopharmaceuticals, which entered the Hong Kong stock market in July 2021, has established more than 10 innovative product pipelines, and the fastest R&D progress is in the treatment of new coronary pneumonia and hepatitis
B.
Among them, the new crown special drug has been approved for use by the State Food and Drug Administration in December 2021, and an emergency use authorization application has been submitted to the FDA
.

Judging from the pipeline disclosed by Tengsheng Biopharmaceuticals, hepatitis B, new coronary pneumonia, HIV (AIDS virus) infection, multidrug-resistant/extensively drug-resistant Gram-negative bacterial infection, multidrug-resistant/extensively drug-resistant Mycobacterium tuberculosis The research and development of new drugs in many fields of infection and depression is the key area of ​​focus.
Among them, the hepatitis B project is an important research and development pipeline of Tengsheng Biopharmaceuticals, and it has entered clinical phase II
.
In addition, projects for HIV treatment and depression treatment are still in Phase I clinical phase, among which depression-related diseases are in the preclinical phase, and the Phase I study of the BRII-296 project for postpartum depression is expected to be completed in the second half of 2022
.

03 BD: External acceleration goes to sea, internal modes are diverse

At a time when international innovation has become a major trend, 18A Biotech's overseas license-out project has performed well in the past year
.

License-out projects of some Hong Kong stock 18A biotechnology companies in 2021 Image source: Guosheng Securities Research Institute

Guosheng Securities believes that when local innovation has become the new focus of domestic pharmaceutical companies, the products of innovative pharmaceutical companies from China are narrowing the gap in development speed with international first-in-class products
.
Behind the license-out is the establishment of China's innovative drug ecosystem.
Chinese local innovative companies are also accelerating the establishment and differentiated development of innovative technology platforms, improving the efficiency of new drug development, and entering a larger international market
.

According to incomplete statistics, in the past year, BeiGene, Innovent Bio, Junshi Bio, Rongchang Bio, Kintor Pharmaceutical, Keji Pharmaceutical, etc.
have all achieved overseas licensing cooperation for innovative products
.
Among them, BeiGene has twice reached project authorization cooperation with Novartis at the beginning and end of 2021, involving PD-1 and TIGIT products, with a total amount of more than 5 billion US dollars
.
And Rongchang Bio's ADC product Vidicitumumab has achieved a single overseas transaction with a total value of 2.
6 billion US dollars
.

On the other hand, while accelerating the export of innovative products to the sea, the cooperation between local pharmaceutical companies has shown the status quo of increasing numbers and diverse models
.

Cooperation projects between some Hong Kong-listed 18A biotechnology companies and other local pharmaceutical companies in 2021 Image source: Guosheng Securities Research Institute

In terms of joint product development and commercialization, small Biotechs use the commercialization capabilities of large Biopharma to commercialize their first products, such as the cooperation between Innovent and Ascentage, so that they can get what they need
.
If Biopharma wants to grow into BigPharma, from a big perspective, the R&D capability of new drugs can only be regarded as an entry ticket, and commercialization is an urgent need to overcome.
The rapid expansion of the commercialization team of local companies requires product support, and small Biotech support products are reduced.
Risks, large companies realize commercialization and complement each other, and there will be more and more such cooperation in the future
.

In addition to product cooperation, a further step is equity cooperation
.
Large pharmaceutical companies indirectly enjoy the dividends of innovative drugs through equity cooperation, while small pharmaceutical companies supplement other conditions such as funds through equity cooperation
.
In addition to direct shareholding, the form of jointly establishing joint ventures is also popular.
For example, Junshi Bio and Jiachen Xihai have reached a cooperation agreement.
The two parties will jointly establish a joint venture to jointly develop and commercialize new drug projects based on mRNA technology platforms and globally.
; Nuocheng Jianhua and Connoya signed a joint venture agreement to establish a joint venture Tiannuo Jiancheng in a 50:50 ratio to discover, develop and commercialize related innovative drugs on a global scale
.
CanSino has established a joint venture with Shanghai Pharmaceutical Group for the production and supply of adenovirus vector new crown vaccine Keweisha
.

As local pharmaceutical companies promote the transformation of local R&D achievements through cooperation and investment, in the future, the cooperation methods between local pharmaceutical companies will also be more in-depth and diverse
.

Original title: The top BioPharma commercialization test report card: 34 18A pharmaceutical companies have a revenue of 25.
3 billion yuan! 60% of the market value shrinks, where will small and beautiful biotech go?