Innovative pharmaceutical company investment choice: go to the best nightclub, bubble the most beautiful girl!

Guide: Innovative medicine is a very strong technology attributes of the industry, there is reason to believe that China's best innovation medicine era is coming!Why is the innovative drug sub-track called the "high-rich" in the field of healthcare?"high", representing a high industry ceiling, a broad market"Rich" means that this is a good business to make money"Sishuo", on behalf of the industry knowledge-intensive high, the management team is mostly the industry's top talentthese three points correspond to the most important things in investment, namely, business model (pricing power, moat), industry space, the company's management is excellent or notwe judge whether a good business is at the heart of it: pricing power, and innovative medicine is clearly a good business with strong pricing powerwhy doinnovative drugs have such strong pricing power? In its essence, innovative drugs are sold in patents, patents protect the corresponding molecular structure (chemical sinops) or amino acid sequence structure (biological drugs), other pharmaceutical companies in the patent protection period can not be copied, it actually has a monopoly of the nature inside, especially Firstclass or Bestinclassat the same time, innovative drugs are also very explosive and the market space is wide of the track, innovative drugs once approved to market, bringing about huge revenue and profit growthThe most classic case is that, with a treatment of arthritis of the repair of the united world's single-product sales for many years, the annual revenue has reached more than 20 billion U.Sdollars, a few years total sales revenue of more than 100 billion U.Sdollars, a former research drug to create a pharmaceutical giant, the stock price of 8 years five timesTurning to look back at China's innovative drug leader Hengrui Pharmaceuticals, from generic drugs to innovative drugs, in the past 10 years has also created a 10-fold increase in the stock price of the good words, there is a huge wealth-building effect, AbbVie, Hengrui share price trend contrast
but it can not be ignored that high returns often correspond to high riskA new drug often takes at least a decade from development to market, and the cost of research and development is often greater than $1 billion, which is what we call the "double law" of the biomedical community In the research and development process, the high failure rate is the industry's normal, from clinical I to clinical II success rate of 60-70%, from clinical II to clinical III success rate of only 25-45%, through the clinical phase III rate of 45-60%, the approval rate of 75-90%, so comprehensive calculation, the success rate of 5% to 17%, any link of failure means that the total amount of billions of dollars in real money If it is a senior old stockholder, I think the failure of Chongqing beer hepatitis B vaccine should be no stranger, 2005-2011, Chongqing beer experience from the lowest 6.45 yuan / share to the highest 83.12 yuan / share of madness, the final clinical data show poor results, the market back to stop grass with nine consecutive falls at present, most of the strategy of domestic pharmaceutical companies is often me-tooand and -better-based, that is, "take-it-and-one", using foreign proven targets to develop drugs, so little attention to the problem of research and development failure we take Hengrui to compare with the international pharmaceutical giants, whether it is revenue or profit, Hengrui and the giants are not in a scale, but the 420 billion market value is hidden to the giants, no doubt enjoy a super-high valuation Why do make such a market difference? There are two points one is that HengRui was born in the Chinese market, the domestic innovative pharmaceutical industry is in the early stage, the market is growing rapidly, leading companies should enjoy a higher premium, which is the external cause The internal reason lies in the new drug enterprises (especially the research and development pipeline comprehensive pharmaceutical enterprises) can not be estimated according to the simple price-to-earnings ratio method, neither accurate nor scientific, the current professional institutions will take stock of each pharmaceutical company's research and development pipeline and evaluate, and then according to the drug research and development stage and category to assess, and then add the valuation of each pipeline, but this is the art of the door the second is the engineer dividend, in fact, is the advantage of research and development cost, research and development of this work is human-intensive industry Domestic engineers' salaries are half as low as those in Europe and the United States, and they are obedient Suppose that domestic enterprises and European and American enterprises do the same medicine, spend the same research and development costs, I can use 3 people to do your 1 person's work, I certainly higher efficiency than you? This is also the reason why more and more large pharmaceutical companies seek research and development offshoring, but also the domestic CXO enterprises in recent years the rapid rise of the driving force is precisely these two points, superimposed national policy dividends, has given birth to the innovation pharmaceutical industry huge market opportunities, but also we firmly optimistic about and invest in China's innovative pharmaceutical enterprises core logic secondary market is characterized by the fact that you often look for the right track, but you find that you're betting on the wrong jockey or bet on the wrong horse race The bright future of innovative drug circuitist is the consensus of many people, so when investors choose to invest in innovative pharmaceutical companies, how can they choose to race horses and knights, to obtain excess returns? I think the principle that needs to be followed is: "Go to the best nightclub, the most beautiful girl / baby, rather than the lack of abuse." How do you explain that? Look at the following points: 1, sub-subdivision of the track: the choice of major diseases
do the core of the new drug is to benefit patients, then the more patients, corresponding to the new drug developed out of the sales peak is larger, this is certain, so in the core of the innovative pharmaceutical enterprises heavy pipeline, must consider the corresponding disease market space 2019 global drug sales top15 from the 2019 global drug TOP15 list can be seen, these "drug kings", either the corresponding single disease has a large group of patients, or is the corresponding indications a lot, he broadens the sales space of drugs Take Ebervey's Simela, which has been able to treat the ongoing expansion of the disease since it was approved, and has covered 14 types of indications, mainly for rheumatoid arthritis and hypertheritis, which are more common and difficult to cure worldwide why did Sumele become the first global drug single sales for many years? You can see the corresponding indications above, because it is currently very difficult to cure, that is, the need for long-term medication treatment of the slow disease This is the same as the folk stock Shenlin Yuan focus on diabetes, heart disease, cardiovascular disease logic is the same, these slow disease is not good, but not to lose life, patients do not take medicine and uncomfortable, it will control the disease of drugs become addictive, once addiction means huge profits of pharmaceutical companies The corresponding "reverse textbook" is Gilead's cured hepatitis C drugs Harnovi and Sovaldi, although at its peak in 2015 brought $19.1 billion in revenue to the company, but cure a customer less than one customer, followed by the patent expiration, Indian generics impact and price pressure, the new pipeline did not come up, resulting in product green yellow, share prices fell sharply keywords: big disease, slow disease 2, the preferred track leader, the second-choice three-tier innovative pharmaceutical industry, is destined to race against time industry The speed and progress of innovative medicine approvals has a huge impact on future sales spikes, and the first space to take approvals is clearly greater than the space behind them We think the best pattern is the moon long star thin, followed by a super-strong, again a little bit is two-point or three-legged standing, the worst is the flowers in full bloom, a hundred competing streams of this highly competitive segment then find the domestic market share leader in each sub-track, and then not to find the top three is crucial, because these companies are either the first domestic to seize the blank market, or its products in the same kind of efficacy is the best, or its comprehensive capacity is the strongest "For market segment leaders, there is often a raw capital accumulation and scale effect, if the existing pipeline can not satisfy management, then it can also buy and buy, which means that the matthew effect of the innovative pharmaceutical industry will become more and more obvious." also for the current non-profitable innovative pharmaceutical companies, the most important consideration is the comprehensiveness of the research and development pipeline, quality and progress, through its research and development pipeline cash flow discount, this method is very difficult, and different investors grossestimate the number is also different In addition to the reasonable value assessment, it is also very important to check the lead of the company's pipeline progress than its competitors, you can check and track from the relevant FDA website keywords: segmenting track taps, research and development pipeline comprehensiveness, quality and schedule 3, identify the management of the enterprise we said earlier, innovative drugs are research and development-oriented talent-intensive industries, so people for the company is obviously the core of the assets often good leadership team can make the enterprise issued beyond the imagination of the core competitiveness, which in the strategic layout of the enterprise will have a very deep embodiment what kind of leadership would be satisfactory? the first is to push back from the primary market, because China's innovative pharmaceutical industry is still behind Europe and the United States more than 10 years, VCs basically choose innovative drug labels when they all look at the leader is a multinational pharmaceutical company to serve on the resume, or from abroad to come back to the thousands of planning level experts These people have an international perspective and experience, and they know better than those at home how to work with foreign companies and are more sensitive to the future direction of innovative drugs give an example of The Management of Baeda Pharmaceuticals: Chairman Mr Ding Listing, National High-Level Talent Program Expert, National "Major New Drug Creation" special group of experts, Zhejiang Province special experts, enjoy the State Council special allowance, the University of Arkansas School of Medicine, The Department of Pathology Clinical Medicine, American pathologist FOR EXAMPLE, SENIOR VICE PRESIDENT AND CHIEF SCIENTIST JIA BINGWANG, PH.D IN ORGANIC CHEMISTRY AT THE UNIVERSITY OF WISCONSIN-MADISON Has worked in the United States Merck, AstraZeneca, the United Kingdom, engaged in new drug research and management for more than 20 years, led dozens of new drug projects, successfully promoted a number of projects into clinical research, is a number of clinical new drugs and clinical candidates of the key inventors of new drugs, in the field of small molecule targeted drug design the second is the local school, the local school aspirations of the talent can be said to be one of the thousands of pick, the degree of difficult to identify can be seen the most typical character is Hengrui Pharmaceuticals boss Sun, slowly from a small pharmaceutical factory to become bigger and stronger, in the strategic determination of the transformation to innovative drugs, so that Hengrui became a brother of Chinese medicine, become a generation of legends And the domestic local leadership of the pharmaceutical companies, eat the old, small rich is too much, most of these do not have investment value, so in the choice of more cautious, it is best to refer to some have proved their own leadership in the business keywords: international school, excellent local pie; 4, focus on the local advantages of China
the local advantages mentioned here, on the one hand, the domestic engineer dividend mentioned, the annual salary of a skilled engineer in the country is about 150,000, is the same level of foreign 25%, so that domestic pharmaceutical enterprises research and development and production costs have a strong advantage, the domestic CXO industry is to undertake a large number of orders to achieve high-speed growth, the same as the same as the rise of electronics on the other hand related to the local environment, China's innovative pharmaceutical industry is in the early stage of development, and a broad gap abroad, the low starting point of the advantage is a broader market space And we see the U.S and China cancer incidence - death rate of data comparison found that the disease map of the people has a strong local characteristics (related to living habits, environment), such as stomach cancer, nasopharyngeal cancer, esophageal cancer and other tumor incidence remains high, there is a large number of unmet demand, if the local innovative pharmaceutical companies can tap this part of the unmet demand, it can complete to some extent "Chinese characteristics of consumption." To give a typical example of the device, TAVR field is the first breakthrough of Qiming medical treatment, but also to tap the domestic high incidence of aortic valve stenosis needs, around the characteristics of the body organs of the Chinese people to develop the corresponding solution, slowly to the "subdivision of the field of a brother" position, occupy more than 70% of the domestic market segment share in addition to these two points, sales promotion is also an important part of the impact of enterprise performance, in this regard, China's domestic pharmaceutical enterprises in government affairs, market access, academic promotion and other aspects of a comprehensive competitive advantage so, based on the domestic, dig deep chinese characteristics of the demand, in the inner map strong after the outside, this is the most grounded gas of China's pharmaceutical companies to play keywords: cost advantage, disease map with Chinese characteristics; 5, identify the institutional shareholders behind pharmaceutical companies
the research power of individual investors is very limited, often obtained information and public private equity funds, venture capital and other large institutions are asymmetrical So whether it is PE stage investment and secondary market investment need to identify to understand the pharmaceutical companies before there is no institutional intervention, what institutions to intervene, how many families involved If a pharmaceutical company, before an IPO or has been in circulation in the secondary market, has not been involved in the mainstream institutions, then it is very doubtful, it is difficult to imagine a so promising innovative pharmaceutical company has not been invested by mainstream institutions to buy, even if it is financially flawless, investment will be somewhat flawed Here also need to distinguish, the primary market mainly look at the well-known VC, PE, industrial funds, etc , the second level mainly look at public offerings, well-known private placements (The following is the domestic primary market investors pay more attention to the authority list of Qingke, help individual investors to identify the company's vc shareholders) key words: shareholders, mainstream institutions summary innovative drugs are very strong technology attributes of the industry, its representative is the most cutting-edge life science systilife and biotechnology, while it is linked to the national economy, one end of the people's livelihood In the rapid rise of the motherland at the moment, we as market participants, reasonable believe: China's best innovative medicine era is coming! in the end it's the old saying that the pessimistist is right, and the optimist makes money