Is the pharmaceutical Q3 report card worthy of this wave of rise?

This year, from the perspective of the external environment, the pharmaceutical industry can be described as ill-fated
.

Since the beginning of this year, the repeated intensification of the domestic epidemic has almost blocked the hospital-side channels
.
South China, East China and Beijing-Tianjin-Hebei and other regions are the main markets for hospital sales, because of the impact of the epidemic, so that almost all pharmaceutical and device companies will complain in their performance reports, "affected by the epidemic" has become a one-size-fits-all reason for
the decline in the performance of pharmaceutical companies.

For innovative drugs with "no performance pressure", the slow progress of clinical trials is mostly due to the epidemic
.

Some companies explain: "The pandemic has made it difficult for CRA personnel to arrive and recruit clinical patients, and the distribution of comparative drugs and on-site verification of the trial process cannot be guaranteed
.
While some decentralized clinical trials can digitally address a certain degree of patient dropout, diseases such as Alzheimer's and Parkinson's still require face-to-face subjective scale assessments by medical staff to quantify the efficacy of
these patients.
”

But back in the audience, the entire industry actually knows that the entire pharmaceutical bubble is slowly being punctured under macro-control, and the epidemic is just a catalyst
.

A clear signal is that the freezing financing environment has not only affected pharmaceutical companies that go overseas independently, but also disrupted the cooperation plans
of most pharmaceutical companies overseas.

Some pharmaceutical companies that once stood out by License-in have also begun to make careful calculations
on "buying, buying and buying" in the cold capital winter.
In August, Genting Sun Yao, which has always been backed by a financial father, announced that it had entered into a termination and transition service agreement with Gilead's subsidiary Immunomedics to transfer the previously introduced TROP-2 Asian interests
in ADC drug Topavi.
This ADC drug, once the world's first and only approved ADC targeting Trop-2, was also a big hit
in capital grabs.

In February this year, CSPC acquired WINCOM Biologics, becoming the first case of
biotech selling.
Although it did not start with this to set off a wave of pharmaceutical companies selling themselves, it can be seen
from a series of actions to sell assets, lay off employees, and authorize products.

In addition to selling themselves, the broken arms of pharmaceutical companies continue to operate
.
Clover has suspended research and development on three pipelines and put its chips into its vaccine candidate, SCB-2019, and other COVID-related projects
.
Watson directly terminated the research and development of recombinant EV71 vaccine, and fully promoted the bivalent HPV vaccine WHOPQ prequalification, 9-valent HPV vaccine clinical research, and recombinant new crown vaccine clinical research at home and abroad
.

Innovative pharmaceutical companies themselves cannot make blood, and when investors frown, their pockets are stretched
.
However, for traditional pharmaceutical companies, the overall decline in sales expenses in the Q3 report can be seen
.

China's innovative drug products are still mainly Me-too or Fast-Follow, and the initial promotion inevitably requires intermediate costs
.
This year, innovative drug companies still have a lot of gains in commercialization: Hengrui's AR inhibitor revilutamide has been listed in China, and Junshi's PD-1 inhibitor treplimab has been approved
for a new indication.

The normal operation is: after the product is approved, it will quickly start the city meeting, listing meeting, department meeting, promotion meeting and so on
.
This year, due to the pandemic and funding constraints, these sales activities have had to be postponed or switched online
.
As a result, Junshi's sales expenses decreased by 2.
59% year-on-year, while Hengrui was even more exaggerated: a year-on-year decrease of 26.
21%, and the current sales team has less than 11,000 people
.

Where did the money go?

From the Q3 report: Junshi gave R&D, with a total investment of 1.
636 billion yuan in the first three quarters, a year-on-year increase of 15.
01%; Hengrui added 1.
314 billion new R&D expenses in the third quarter, and considering the capitalized part, the R&D already invested this year may be more than
4.
5 billion.

The choice of enterprises is understandable: if you want not to collapse, you must find and invest money
in the hundreds of pipelines under research in the rear.
However, drawing water from the sales process cannot help but worry that a vicious circle
of "reducing sales expenses - slow commercialization progress - enterprises cannot raise money" will form in the future.