Rongchang's listing of "blood supplement" and Cinda's "blood transfusion" by Lilly, can the losses be reversed?

On March 31, Rongchang Biotech landed on the Science and Technology Innovation Board, officially entering the "A+H" era
.
The A-share issuance price is 48 yuan per share, and it is planned to raise 4 billion yuan of funds, which will be used for new biological drug industrialization projects, new anti-tumor antibody drug research and development projects, autoimmune and ophthalmic disease antibody new drug research and development projects and supplementary working capital
.
Similar to the situation of many innovative pharmaceutical companies, Rongchang Bio has been in a state of loss for many years
.
Therefore, for innovative pharmaceutical companies that develop new drugs and commercialize them, "replenishing blood" through listing financing has become one of the important ways for the company to continue investing in research and development
.
However, the capital market did not seem to buy it.
The first day of the IPO on the Science and Technology Innovation Board was broken.
Rongchang Bio A shares opened at 46.
00 yuan per share, down 4.
17% from the issue price.
The closing price was 40.
84 yuan per share, with a total market value of 22.
228 billion yuan.
Yuan
.
On the other hand, as of the close of Hong Kong stocks on March 31, Rongchang Biotech closed at HK$45.
8 per share, which also fell below the Hong Kong stock issue price of HK$52.
10 per share
.
Different from Rongchang Bio's "A+H" dual-listed "Blood", the innovative drug company Innovent, which has not yet achieved profitability, received a "blood transfusion" from Eli Lilly after the failure of PD-1 to go overseas
.
On March 28, Innovent announced that it will obtain the exclusive commercialization rights of Eli Lilly's ramucirumab and sepprotinib in China, as well as the priority to negotiate the future domestic commercialization of Pirtobrutinib.

.
The commercialization of oncology products once again has attracted the attention of these two companies.
The two drugs, ramucirumab and sepretinib, are about to be launched, whether they can bring new business to Innovent Bio in the difficulties of consecutive years of losses.
Revenue growth? PD-1 revenue growth slows down, and Innovent has accumulated losses of more than 12 billion yuan in consecutive years.
On March 29, Innovent Bio released its 2021 fiscal year annual report
.
The company will achieve an operating income of 4.
270 billion yuan in 2021, a year-on-year increase of 11.
08%, a loss of 2.
243 billion yuan, a net loss attributable to the parent company of 3.
138 billion yuan, a year-on-year increase of 214.
30%
.
It is worth mentioning that Cinda Bio, which has insufficient "hematopoietic" ability, has been losing money for six consecutive years.
From 2016 to 2021, it lost 504 million yuan, 562 million yuan, 5.
771 billion yuan, 1.
720 billion yuan, 998 million yuan, and 22.
43 yuan.
, the cumulative loss exceeded 12 billion yuan
.
Innovent said that the increase in losses in 2021 was mainly due to continued investment in research and development
.
The company will invest 2.
116 billion yuan in research and development in 2021, a year-on-year increase of about 23%
.
Innovent said that the steady increase in R&D expenditure is mainly used for the products in the late stage of development in the global pipeline and the clinical trials of priority development products to further expand the indications of the existing product series and to develop new drugs under research, including preclinical development
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At present, Innovent's commercial product portfolio has expanded to 6 models, of which Sindile, the PD-1 monoclonal antibody tumor drug, is its star product
.
Innovent said in its annual report that the product maintained strong growth in both sales revenue and sales volume
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At the same time, other products in the continued expansion of commercialized products also contributed to the strong growth of product revenue, which accounted for approximately 30% of the total annual product revenue
.
According to the sales of sintilimab previously disclosed by Innovent by quarters, in all four quarters of 2021, the product will achieve sales revenue of approximately RMB 700 million, RMB 700 million, RMB 800 million and RMB 900 million respectively, totaling About 3.
1 billion yuan
.
However, as the “involution” of the domestic PD-1 antibody market intensifies, even if sintilimab is newly approved in 2021 for three indications: first-line non-squamous non-small cell lung cancer, first-line squamous non-small cell lung cancer, and first-line liver cancer Compared with the quarterly growth of about 400 million yuan, 500 million yuan, 600 million yuan and 700 million yuan in all four quarters of 2020, the growth rate of sales has slowed down
.
At the same time, under the background of medical insurance cost control, the domestic PD-1 market has “shrinked” to a certain extent.
Previously, Innovent and its partner Eli Lilly were committed to promoting sintilimab to North America and Europe.
and overseas markets in other regions
.
However, on February 10 this year, the majority of the members of the Oncology Drug Advisory Committee convened by the FDA voted against it, and on March 24, the company received a complete reply letter from the FDA regarding the review of the listing application of sintilimab.
As a result, the FDA did not approve Sindhi New drug application for limumab in combination with pemetrexed and platinum for the first-line treatment of non-squamous non-small cell lung cancer
.
In 2022, sintilimab has been approved for 4 indications, all of which will be included in the national medical insurance.
This drug will continue with 12 other PD-1 (L1) products in the Chinese mainland market.
Fierce competition
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The sales team doubled, and the partner Lilly brought a new product "blood transfusion".
After the failure to launch sintilimab overseas in cooperation with Lilly, Innovent quickly bought two anticancer drugs from Lilly
.
On March 28, Eli Lilly and Innovent once again announced the commercialization of oncology products
.
Innovent Bio has obtained the exclusive commercialization rights to import, sell, promote and distribute ramucirumab and sapritinib in mainland China, as well as the right to negotiate first for future commercialization of Pirtobrutinib in mainland China
.
The imminent launch of ramucirumab and sabrutinib may bring new revenue growth points for Eli Lilly and Innovent
.
In March 2022, the State Food and Drug Administration approved the combination of ramucirumab and paclitaxel for the second-line treatment of advanced gastric cancer.
The drug's marketing application for second-line liver cancer treatment was also accepted by the State Food and Drug Administration in September last year
.
Sepretinib, a transfection-rearranged gene (RET) inhibitor, was accepted by the State Food and Drug Administration in August last year for the treatment of adults with metastatic RET fusion-positive non-small cell lung cancer, as well as eligible adults and 12 RET-mutant medullary thyroid cancer in children over 12 years old has been granted priority review status for marketing application
.
According to the agreement, Innovent will pay Lilly a total of US$45 million as a down payment after the approval of ramucirumab for liver cancer indications and sepretinib for non-small cell lung cancer indications
.
In the future, Innovent will be solely responsible for the pricing, import, marketing, distribution and sales promotion of these two products; Eli Lilly is only responsible for product production, supply, and regulatory registration
.
Choosing to cooperate with local pharmaceutical companies is Lilly's performance of optimizing resource allocation in the Chinese market
.
For Innovent, this cooperation is also beneficial
.
In the context of national talks and centralized procurement, innovative pharmaceutical companies are facing greater cost pressures, and obtaining some potential varieties may help further enrich the company's revenue sources
.
The more extensive commercialization activities have also resulted in an increase in related expenses.
Innovent Bio will invest 2.
541 billion yuan in sales and marketing in 2021, accounting for 59.
6% of total revenue and 63.
5% of product revenue
.
In terms of commercialization channels, the scope has expanded to about 5,100 hospitals and 1,100 hospital-side (DTP) pharmacies in more than 320 cities
.
In terms of sales staff, it has been strategically expanded from 1,284 employees in 2020 to 2,768 employees in 2021, an increase of more than doubling
.
However, whether these two drugs can bring new profit growth points for Innovent is still a test
.