The road to the rise of China's innovative drugs: too much Lilly, too few Novo Nordisks

How to become a cosmic pharmaceutical company? There is no standard answer to
this.

Looking back at the rise of overseas big pharmaceutical companies, there are two choices in front of domestic innovative pharmaceutical companies:

The first is the "big and complete" model represented by Lilly: from diabetes to tumors to autoimmunity, Lilly has blossomed everywhere;

The other is the "specialized and refined" model led by Novo Nordisk: in the 100-year history of Novo Nordisk, it has always been deeply engaged in the field of
diabetes.

Although the two companies took two diametrically opposed routes, the results were very consistent, and both became leaders in the pharmaceutical industry:

At present, Lilly has the second largest market capitalization in the world and Novo Nordisk has the sixth market capitalization in the
world.

As long as you care about research and development, no matter what model can be successful
.

But which path is right for them, for Chinese biotechs who are in confusion, may need to ponder.

       / 01 /

Lilly, a great and complete victory

Who is the number one pharmaceutical company in the universe? Lilly laughed and said nothing
.

Since 2019, in less than four years, Lilly's share price has risen by 184.
56%, and its market value has increased by more than 200 billion US dollars, becoming the second largest pharmaceutical company
after "drug and device complex" Johnson & Johnson.

What is Eli Lilly? There is more than one answer, but reviewing its development path, one conclusion that can be drawn is the victory
of the "big and complete" strategy.

Lilly is extremely strong in diabetes, but its sphere of influence is not limited to this market
.
As shown in the figure below, in addition to diabetes, Lilly is involved
in the field of tumors, self-immunity, and neurological diseases.

In terms of performance alone, diabetes is Lilly's trump card, contributing US$6.
826 billion in revenue in the first half of 2022, accounting for half of the total
.

In the long run, the growth of the company's diabetes business is far from over, dulaglutide and empagliflozin two blockbuster hypoglycemic drugs are still strong, and the GIP/GLP-1 dual receptor agonist tirzepatide is poised to go, which is regarded by many as a strong contender for the next drug king
.

But Lilly's potential sector doesn't stop there, and the oncology business has a tendency
to catch up.

With the approval of adjuvant therapy indications for breast cancer last year, the revenue scale of the company's blockbuster product CDK4/6 inhibitor increased to US$1.
058 billion in the first half of the year, an increase of 73%, which is one of
the best performing drugs this year.

In addition to CDK4/6 inhibitors, Lilly has also bet on RET, KRAS G12C, BTK, PI3Ka, which are popular tumor targets, and with the potential of the king of "me better", the future is destined to be full of interest
.

Lilly's autoimmune disease field is late, but it is also rising rapidly, with revenue of $1.
545 billion
in the first half of the year.

At present, in addition to expanding the indications of IL-17A inhibitors, Lilly is also developing self-exempt star targets such as IL-2, IL-23, and IL-13
.
It can be seen that Lilly is also full of expectations
in the field of autoimmune diseases.

At the same time, Lilly is also incubating the neurological disease business
.
In the first half of the year, although this segment contributed only 788 million US dollars in revenue, it contained potential future blockbuster bomb products - Alzheimer's disease drugs
.

Overall, Lilly's rise has opened and closed, based on the continuous extension of its own circle of competence, it has found many growth points outside the diabetes market, and jointly supported the company's bright future
.

       / 02 /

Novo Nordisk, a triumph of fineness and specialization

In the pharmaceutical rivers and lakes, "big and complete" can succeed, and "small and beautiful" can not stand out
.

"Small" means focusing, looking at an area and doing it best
.
At this point, Novo Nordisk has the most right to
speak.

In the past nearly 100 years, Novo Nordisk has been continuously engaged
in the field of diabetes.
According to the company's 2021 financial report, its diabetes business revenue reached 17.
996 billion US dollars, accounting for 80% of
the total revenue.

In addition to diabetes, the Novo Nordisk pipeline focuses on obesity and rare diseases
.
Among them, obesity is also an extension of diabetes products
.

But focusing does not mean that it is difficult to become a cosmic big pharmaceutical company
.
Over the past decade, Novo Nordisk's share price has risen nearly 5 times, making it one of the pharmaceutical companies with the highest rate of return; Up to now, Novo Nordisk has a market value of 240.
4 billion US dollars, ranking 6th in the world.

As mentioned above, Novo Nordisk's success comes from "precision and expertise"
.

Since the invention of the first generation of animal insulin in 1925, Novo Nordisk's R&D iteration has not stopped
.
From improving safety, improving efficacy, to extending safety time, insulin from second generation to fourth generation, Novo Nordisk has been a
leader.

The ultimate pursuit of technology has created the hegemonic position
of Novo Nordisk.
In the first half of 2022, Novo Nordisk's insulin accounted for 47.
1% of the global market share
.

Novo Nordisk's ultimate pursuit is not limited to insulin, but also includes another hypoglycemic drug, the GLP-1 analogue.

In 2009, Novo Nordisk launched the world's first GLP-1 analogue liraglutide, ushering in a new era of hypoglycemia; In 2017, Novo Nordisk launched the long-acting hypoglycemic drug semeglutide
.

Around semeglutide, Novo Nordisk once again exerted its own "refined and specialized" research, by expanding indications, increasing doses, and combining with other drugs, trying to tap all the potential
of semeglutide.

At present, semeglutide has become the ruler of
the GLP-1 field.
Driven by it, Novo Nordisk occupied 31% of the global hypoglycemic drug market share
at the end of 2021.

Hypoglycemic drugs have also brought Novo Nordisk an unexpected "side hustle" - the weight loss market
.
In June 2021, the FDA approved semeglutide for weight
loss.
Morgan Stanley expects Novo Nordisk obesity revenue to reach $11.
7 billion in 2030, opening a new growth engine
.

100 years of expertise in the field of diabetes is the source
of Novo Nordisk's ingenuity.

       / 03 /

China's innovative pharmaceutical companies also need more ingenuity

Lilly's model is worth learning, and Novo Nordisk's model can also be learned
.

In the future, we will inevitably give birth to China's "Lilly"
.
Nowadays, many innovative pharmaceutical companies are pursuing a "big and complete" development model
.

Most of the "three tigers" of biopharma that were successfully transformed by biotech due to PD-1 are like this
.

Innovent Biologics still focuses on oncology business, but is not limited by oncology business: self-immunity, ophthalmology, and metabolism have all been deployed
.

Junshi's metamorphosis seems to be more thorough, and the key to supporting its imagination in the past two years is the new crown business: from neutralizing antibodies to new crown oral drugs
.

It is also understandable that the domestic innovative drug industry is still a desert, and there are many areas that need to be overcome
urgently.
The transition from generic to innovative drugs is destined to be full of opportunities
.
In the face of historical opportunities, naturally no one wants to miss them
easily.

It is precisely for this reason that many domestic innovative pharmaceutical companies have opened up and closed at the beginning of their establishment and attacked
in the direction of "big and complete".
In the future, it is destined to give birth to a king and lead China's innovative drugs to the world
.

But at the same time as the rise of "China Lilly", we also look forward to the birth of industry cultivators
such as Novo Nordisk.

Everyone in domestic innovative drug companies is "Lilly", and there is helplessness behind it
.
From 2015 to now, the development of the domestic innovative drug industry has
been completed in only 7 years.
Most innovative pharmaceutical companies are still very young and in the stage
of entrepreneurship and financing.

Innovative pharmaceutical companies first need to ensure that they can continue to raise funds before they are qualified to talk about the future
.
That's why everyone goes wherever
it's hot.

Typical such as Huadong Medicine, centralized procurement to compress the profit of generic drugs, the road of transformation is colorful, from medical cosmetology to ADC, and then to today's diet drugs, hot spots have never been absent
.

In the field of new crown oral drugs, pharmaceutical companies are better at chasing hot spots
.
Pharmaceutical companies that used to do AIDS drugs, hepatitis B drugs, and everything are all lined up to enter the list
of new crown concept stocks.

Returning to the level of development path, for the capital market, it must be that the "large and complete" model is more attractive
.

Under the constraint of capital, there are only a few
pharmaceutical companies that can stand alone and are willing to develop drugs with ingenuity.

Nowadays, as the capital boom fades, the domestic innovative drug industry is about to enter a new development cycle
.
Although Novo Nordisk's model may not be replicable, domestic pharmaceutical companies should also take this case to seriously consider:

Which path is more suitable for you?