The first stock of RNA diagnostics with flying performance due to the epidemic landed on the Science and Technology Innovation Board

The sudden outbreak of the epidemic in early 2020 not only made PCR detection successful, but also brought rapid growth opportunities for RNA molecular diagnosis
.

Founded in 2007, Rendu Bio is one of the earliest domestic companies focusing on RNA isothermal amplification technology and products
.

The main business is the research and development, production and sales of molecular diagnostic reagents and equipment integrated products based on the RNA real-time fluorescence constant temperature amplification technology (SAT) platform, focusing on reproduction, respiration, digestion, blood, food, environmental safety and other fields Provide solutions for accurate diagnosis, effective prevention and control of pathogens and personalized diagnosis and treatment

Rendu Bio, which has been developing steadily and low-key for more than ten years, quickly seized the development opportunities brought by the expansion of the industry in the face of the massive nucleic acid testing needs of the new crown epidemic, and gave full play to the unique advantages of RNA diagnosis, and its performance has ushered in explosive growth
.

However, the demand for new crown testing is sporadic and unsustainable, and the development of other testing product markets will profoundly affect the development prospects of Rendu Bio

Revenue increased by 1.
5 times under the epidemic

Revenue increased by 1.
5 times under the epidemic

According to the prospectus, from September 2018 to September 2021, Rendu Bio’s revenue was 69 million yuan, 99 million yuan, 250 million yuan and 224 million yuan respectively; the net profit was -32.
0512 million yuan, 3.
7392 million yuan, and 61.
3765 million yuan respectively.
In 2020, revenue increased by 152.
5% year-on-year, and net profit increased by 1541.
43% year-on-year
.

Among them, the surge in performance has a lot to do with the new crown epidemic in early 2020
.

At the beginning of the outbreak, Rendu Bio responded quickly and acted proactively.
With its systematic technology platform and R&D system, it successfully developed a new coronavirus nucleic acid detection reagent within a month after the outbreak of the epidemic, and passed the national drug supervision.
In March 2020, the Administration obtained the registration certificate for emergency approval
.

At the same time, Rendu Bio independently developed the AutoSAT fully automatic new coronavirus nucleic acid detection platform.
During the epidemic, the installation, calibration, and testing were completed overnight at the fastest speed.
Regions are delivered and used
.

As of October 2021, the AutoSAT testing platform has installed more than 300 units in hospitals, disease control, customs, third-party laboratories and other testing institutions in 32 provincial-level administrative regions across the country
.

In 2020, the sales revenue of Rendu Bio's automatic nucleic acid detection and analysis system was 78.
9969 million yuan, accounting for 31.
61% of the total revenue, and the sales revenue of new crown detection reagents was 68.
5074 million yuan, accounting for 27.
41%
.

However, while the epidemic brought revenue from the nucleic acid testing business to Rendu Bio, other businesses were affected
.

Taking the sales revenue of reproductive tract products as an example, it will drop by 17.

After excluding the new crown testing business, from January to September 2020 and 2021, Rendu Bio's operating income was 139,020,500 yuan and 122,031,500 yuan, respectively; the net profit was 34,159,600 yuan and 25,024,800 yuan respectively, and the growth rate slowed down
.

Source of financial situation before and after proposing the new crown testing business: prospectus

At present, with the popularization of vaccines, the epidemic has been basically brought under control.
In addition, the production of new crown detection products on the market is sufficient, and product prices have also fallen due to oversupply.
According to public information, the lowest centralized procurement of multiple rounds of new crown detection reagents has won the bid.
The price has gradually decreased from 25 yuan/person to less than 6 yuan/person; the average price of Rendu Bio's new crown detection reagent products has also dropped from 40.
06 yuan/person in the first half of 2020 to 26.
08 yuan in the first half of 2021.
per person, the market for COVID-19 testing products needs to face the realistic problems of decreasing revenue, gross profit and gross profit margin
.

Therefore, if the market segment expansion of other testing products is unfavorable and the effect of market education is not as good as expected in the future, the increase in revenue from other products cannot make up for the decline in revenue from new crown testing, which will have a significant adverse impact on Rendu Bio's operations, profitability and business prospects.

.

How to develop in the post-pandemic era

How to develop in the post-pandemic era

Before the epidemic, Rendu Bio had been deeply involved in the field of molecular diagnostics for many years, and possessed core technologies ranging from diagnostic reagents to fully automatic supporting instrument R&D and production.
As of the prospectus signing date, Rendu Bio had a total of 45 patents, including 26 invention patents.
items, and 19 utility model patents
.

In terms of products, 4 nucleic acid detection kits for reproductive tract pathogens independently developed are the first certified products in China that can realize the detection of RNA live bacteria in urine samples, thus realizing non-invasive sampling; 4 nucleic acid detection kits for respiratory pathogens, 3 The nucleic acid detection kits for enterovirus pathogens have all obtained the third-class medical device registration certificate of the State Food and Drug Administration
.

In addition, the self-developed Automatic Nucleic Acid Detection and Analysis System (AutoSAT) is the first domestic fully automatic, high-throughput RNA molecule detection pipeline with on-demand inspection and emergency functions.
It can be equipped with an RNA real-time fluorescence constant temperature amplification technology platform ( SAT) full series of reagent products, realize molecular diagnosis on-site inspection, meet the fast and accurate detection needs of outpatient and emergency department, and expand the clinical application field of molecular diagnosis from traditional molecular diagnosis laboratory to outpatient and emergency and other on-site application scenarios
.

Relying on its own product and technological advantages, in 2019, Rendu Bio's reproductive tract series products ranked first in the segmented market with a revenue of more than 67 million yuan in the field of molecular diagnosis of sexually transmitted infections, accounting for 28.
5% of the market size in this field; Respiratory series products ranked fourth in the industry in the molecular diagnosis segment of respiratory diseases, accounting for 11.
2% of the market share
.

Market share of China's sexually transmitted infection molecular diagnosis industry by manufacturer in 2019 Source: Prospectus

In addition to the respiratory tract, reproductive tract, and intestinal fields, Rendu Bio is still expanding into new fields
.

In March 2021, Rendu Bio's Hepatitis B Virus Nucleic Acid Assay Kit (RNA Capture Probe Method) was registered by NMPA.
Compared with the standard hepatitis B detection index, this index can be used for hepatitis B efficacy monitoring, recurrence risk prediction and early prediction of the efficacy of interferon medication.
It plays an important role in optimizing the treatment process of chronic hepatitis B patients and is expected to provide new growth for Rendu Bio in the future.
point
.

According to the prospectus, from 2018 to 2020, Rendu Bio’s R&D expenses were 10.
4779 million yuan, 13.
7984 million yuan and 23.
6983 million yuan respectively, and the R&D expenses accounted for 15.
11%, 13.
91% and 9.
48% respectively, which were higher than comparable companies in the same industry
.

R&D expenses compared with peers Source: Prospectus

With high investment, Rendu Biology will also usher in the harvest period
.

At present, Rendu Bio has 12 research projects, of which 2 are in the registration technical review stage, 3 are in the clinical evaluation stage, and 7 are in the product development stage, involving blood diseases, respiratory tract, reproductive tract, and tumor screening.
and other fields
.

Source of product development pipeline: prospectus

In general, although Rendu Bio's products have occupied a certain market share in the reproductive tract, respiratory tract and other sub-fields, due to the low market awareness of RNA molecular diagnostic technology in China, the scale of its related sub-markets accounts for the overall market share.
The proportion of the molecular diagnostics market is small, so the company's overall revenue is not high
.

How big a cake can RNA diagnostics create?

How big a cake can RNA diagnostics create?

The molecular diagnostics market in China is mainly divided into infection detection, tumor detection, reproductive health and genetic disease, among which infection detection is the largest single segment
.

According to statistics, the domestic molecular diagnostics market has grown from 2 billion yuan in 2015 to 5 billion yuan in 2019, with a compound annual growth rate of 25.
2%.
It is estimated that by 2024, the market size of the infection detection sector will reach 14.
4 billion yuan
.

Source of the market size of molecular diagnostics in China: prospectus

At present, the mainstream technologies in the field of infection are conventional PCR technology and RT-PCR technology
.

For the coexistence of DNA and RNA in the same pathogen (such as bacteria, fungi, mycoplasma, chlamydia, and DNA viruses), domestic manufacturers mainly use conventional PCR technology for detection, and the number of products accounts for 93.

The technical application of domestic nucleic acid detection reagent products in the infection field Source: prospectus

Although China's RNA molecular diagnosis started late and has a low market share, compared with conventional PCR, RNA molecular diagnosis technology has high sensitivity, reduces the risk of contamination of amplification products, and is more suitable for complex samples (such as urine, feces, etc.
) The detection of pathogens solves the problems of low sensitivity, specificity, and false positives and false negatives in the detection of complex samples in the field of infection (such as non-gonococcal urethritis), which is more conducive to the realization of automated pipeline detection
.

At present, in the field of molecular diagnosis of infectious diseases in China, the proportion of RNA molecular diagnosis still lags behind that of developed countries.
For example, the proportion of RNA molecular diagnosis in the field of infection in the United States has reached 25%, while that in China is only 6%
.

However, according to Sullivan's analysis, China's RNA molecular diagnosis is one of the fastest-growing segments in the infection field, and the average annual growth rate is expected to remain around 23%

In this context, if Rendu Bio can do a good job in market development and academic promotion, and make the domestic clinical market more familiar with and accept its RNA diagnostic products, it is expected to grab a large market share from the PCR market in the future
.

summary

summary

With the continuous development of biomedical technology, precision medicine has become an integral part of the national strategic emerging industry
.

Compared with the commonly used PCR technology, the sensitivity and accuracy of RNA diagnosis have been greatly improved, and the future development potential is huge

Rendu Bio, the first company in RNA diagnostics, has seen a surge in performance due to the epidemic.

References

References

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"Anti-epidemic pioneer enterprise Rendu Bio has registered through the IPO of the Science and Technology Innovation Board, and plans to raise 700 million yuan", Sohu, 2022.
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