New crown drug made in China?

One stone caused a thousand waves of waves.
On November 16, the announcement of the signing of a supply contract by Kailai Ying attracted widespread attention and discussion in the industry and the market
.

According to the announcement, the cumulative amount of this CDMO service contract of nearly 3.
1 billion yuan (US$481 million) has reached more than 50% of Kailaiying's audited main business income in 2020
.

A secondary market analyst who has tracked Gloria for a long time told the E-pharmaceutical manager that this order has set the historical record of the amount of a single product order for Gloria, even in the global small molecule CDMO industry.
Competitive"
.

Although the amount of the order is huge, because "the transaction involves trade secrets to protect the interests of the counterparty", Kailaiying did not disclose the detailed information of the transaction in the announcement, which has triggered outside speculation
.

Why did this record order "land" on Kailai Ying? Where did the "big order from the sky" come from?

01 Who on earth is "Customer C"?

From the moment the announcement was issued, the outside world's "guessing" on the counterparty of this order also began
.

Although Gloria keeps secrets about the specific content of its counterparties and orders, some clues can still be seen from the clues of the announcement
.

According to the announcement, the client of this transaction is a "a large American pharmaceutical company" with which Kailaiying has continued to cooperate, and Kailaiying has maintained a sustained and good cooperative relationship with it for a long time
.

The announcement also announced the amount of transactions between the company and the customer and the proportion of operating income in the last three years:

The revenue from this customer in 2018 was 185 million yuan, accounting for 10.
07% of the operating income of the year; the revenue from this customer in 2019 was 249 million yuan, accounting for 10.
11% of the operating revenue of the year; the revenue from this customer in 2020 was 638 million yuan, It accounted for 20.
25% of the operating income of the year
.

Combined with the detailed information of the five major customers disclosed in the Hong Kong stocks prospectus published in June this year, "Customer C" basically corresponds to the transaction party of this order
.

So, who exactly is "Customer C"?

Gloria also stated in the 2021 semi-annual report that it has established cooperation with 15 of the world’s top 20 pharmaceutical companies, and has served 8 of them continuously for more than 10 years.
Global pharmaceutical giants such as Weiwei, Eli Lilly, Bristol-Myers Squibb and AstraZeneca have formed a strong cooperation viscosity
.

The true identity of "Customer C" seems to be in the presence of Pfizer, Merck, AbbVie, Eli Lilly and Bristol-Myers Squibb
.

According to the E-medicine manager from the above-mentioned sources, although the innovative drug product involved in this order has not yet been approved, it has been promoted and included in the channel that needs to be quickly reviewed and marketed
.

According to the announcement, the delivery time of this order is from 2021 to 2022
.

In the 2021 semi-annual report, Kailaiying stated that during the epidemic, it was responsible for the development and production of two small-molecule antiviral innovative drugs.
One of the drugs, through the application of continuous response, shortened the key segment from 4 steps to 1 step.
It took 6 months to achieve ton-level scale-up production of molecules with only gram-level technology, which significantly shortened the clinical development time; another drug has now entered clinical phase III
.

During the epidemic, the two U.
S.
pharmaceutical giants Merck and Pfizer’s small molecule new crown antiviral drugs made the fastest progress.
Among them, Merck’s Molnupiravir was approved for listing in the United Kingdom this month, while Pfizer’s Paxlovid issued the announcement to the United States on the day of the announcement.
The FDA has applied for an emergency use authorization (EUA)
.

An interesting piece of information is that on the first trading day after Pfizer’s new crown oral specific drug announced its clinical results, the share price of Calais opened close to the daily limit, and the enlarged trading volume at that time once set the record in 2021
.

Based on various signs, the "Customer C" in this "big order" is probably Pfizer, and the product is very likely to be the new crown oral drug Paxlovid
.

In this regard, Kailaiying emphasized that "the company has always been customer-centric" is not commenting on outside speculation, only that the company will put the protection of the interests of customers first, and will continue to promote the product in the future and after the market enters the terminal market.
Provide support in
.

On the 17th, the official account of Gloria British Pharmaceutical News once pushed the article that Pfizer submitted an emergency use authorization application for Paxlovid to the FDA, and the article has been deleted
.

02 Why is Kailaiying?

Another question is, among the many choices in the world, why is it China's Gloria?

In terms of strength, the status of Kailaiying, established in 1998, in the CDMO industry after more than 20 years of development has been obvious to all, especially its small molecule CDMO business field has a global competitive advantage
.

For this large order, industry experts who have been paying attention to Gloria for a long time analyzed mainly for the following reasons:

The first is due to the long-term and continuous in-depth cooperation between Gloria and Pfizer
.

Whether in terms of revenue contribution or cooperation with blockbuster products, both Pfizer and Kailai Ying have benefited from past cooperation.
Especially in the past three years, the key varieties of Pfizer’s R&D pipeline (mostly small molecule new drugs) have been It has an intersection with Kailai Ying, and even its main supplier
.

Second, it is bound to be inseparable from Kailaiying's "hard core technology"-continuous process technology, which is undoubtedly top-notch in the industry
.

From the beginning of its establishment, Hong Hao, the founder of Kailaiying, has always emphasized the importance of "D" (development) in CDMO
.

If you use numbers to describe it, Kailaiying’s R&D investment is undoubtedly among the best in the industry
.

The projects that Kailiying intervenes in the early stage can usually shorten the clinical time of the drug and save a few months in advance to market.
This is what pharmaceutical companies like
.

Third, Gloriain can meet the urgent production needs of new crown drugs
.

At this stage, the new crown drug has a huge demand, coupled with its short R&D cycle (delivery time is only two years), the time required for its R&D and production is urgent, and whether it can provide high-quality production capacity in a timely and rapid manner is very important.
Not many companies can take over
.

Relevant experts said that for many years, the main income of Gloria has come from Europe and the United States, and its quality management system can fully satisfy Europe and the United States
.
This year's semi-annual report, the proportion of its income outside mainland China is close to 90%
.
At the same time, there are few small molecule CDMO companies that can meet the production capacity of Pfizer's new crown drug, and Kailaiying is one of them
.

In terms of follow-up production capacity, according to the above-mentioned sources, Kailaiying has made adequate preparations for resource allocation and follow-up production capacity arrangements, and it should be able to meet the supply requirements at the corresponding time node
.

Whether it is from Calais’s “acquisition” or Pfizer’s new crown vaccine and new crown drugs, hard-core technology and a deep understanding of the industry are indispensable
.

Back to the CDMO industry, some investors once compared Gloria to the "Foxconn of the pharmaceutical industry" and asked Hong Hao.
Hong Hao said that CDMO companies should not simply be regarded as general foundry companies, high-end original new drug APIs, intermediates Body, especially the production process of preparations, is very technically difficult, and the threshold is quite high
.

"If you have to give a definition to the CMO/CDMO industry, then engaging in non-cGMP standards that touch the intermediates or API production and processing services that are less difficult to synthesize is a primary competitor in the first stage.
What it earns is capacity transfer and cost reduction.
2.
Money to reduce environmental pressure; the intermediate competitors in the second stage copy downstream customers' process routes on the premise of meeting cGMP standards.
Although they also make money for capacity transfer, barriers have increased; and now Kailaiying is undoubtedly a high-level competitor
in the third stage .
Under the premise of meeting cGMP standards, it can already use new technologies with intellectual property rights to optimize traditional processes or provide innovative drug process development services.
The strength of'D' in Laying CDMO
.
"

The fact that Calais won the big order may also need to cause the outside world to think more deeply about the CXO industry
.