The stock price of pharmaceutical companies has broken frequently. Who will pay for the Me Too project for the IPO?

Since the implementation of the new regulations in 2016, participating in the new investment strategy has become an investment strategy of “as long as the lottery is won without losing money”, but in October this year, 7 stocks have fallen below the issue price on the first day of listing
.

Table 1 New shares broken on the first day of listing in October

Data source: Straight Flush

The share price break rate of new drug research and development companies on the science and technology board is gradually increasing

Coincidentally, some of the new drug R&D companies listed on the Science and Technology Innovation Board in 2019 have gradually broken or even broken
.

Table 2 Changes in the stock prices of R&D companies of category 1 chemical and biological drugs on the Sci-tech Innovation Board

Data source: Straight Flush

First in class is the new trend of new drug research and development

Investigate the reasons.
In addition to the fact that the overall pharmaceutical capital market is no longer the hot atmosphere of previous years, the overall trend of new drug R&D has gradually shifted from Me too and Fast follow to First in class.
As China’s pharmaceutical R&D has moved from the previous third echelon " "Follow-up" has crossed to the second echelon and "run in parallel", and entering the first echelon has become the goal of the long-term development of China's pharmaceutical industry
.

In this environment where innovation is gradually "involved", it is more and more difficult for some Me too and Fast follow varieties to advance to the market and it is more and more difficult for them to seize market space after they are listed.
These are mainly based on Me too and Fast follow research and development.
The imagination of the future market of the enterprise gradually becomes smaller, which has caused it to be gradually neglected by the capital market, and the transformation of the enterprise is imminent
.

At present, among the 19 companies listed on the Science and Technology Innovation Board that have research and development of category 1 chemical drugs and biological drugs, 6 companies have Me too varieties under research or listed in the oncology field.
The stock price has broken or the stock price is showing a downward trend and is about to The number of companies that broke the issue (the increase in the issue price was less than or equal to 30%) reached 4, accounting for 66.
7%
.

Table 3 Analysis of the research targets of the first class chemical and biological drug R&D companies on the Sci-tech Innovation Board

Data source: Yaozhi Data, Straight Flush

Taking PD-1/PD-L1 as an example, 4 of the 19 companies have researched varieties of the target.
As of August this year, Paimrizumab and Sepalizumab have been listed successively.
There are already 10 PD-1/PD-L1 monoclonal antibodies on the market, including 6 domestically produced PD-1/PD-L1.
The development of PD-1/PD-L1 has now become a typical homogenization target
.

After a round of medical insurance negotiations, the average price of the first four listed products has dropped by 74.
84%, and with the introduction of more domestic PD-1 monoclonal antibodies in the next one or two years and the impact of biosimilars of imported drugs on the market in the future , The overall average price of PD-1 drugs is bound to go down further, and the bargaining position of new entrants will also become lower and lower
.

Table 4 Status of PD-1/PD-L1 listed drugs in China

Data source: Yaozhi data

From the perspective of sales data, although the sales volume of domestic PD-1 is still in a trend of rapid growth due to the gradual increase in indications and the entry of medical insurance, the growth of sales has shown weakness or even peaked.
For the two latecomers Piamplimumab and Sepalizumab, seizing market space has become an extremely difficult challenge
.

Figure 1 Sales volume and sales of all PD-1/PD-L1 drugs

Figure 2 Sales volume and sales of domestically produced PD-1/PD-L1 drugs

Data source: Imida sales database

Clinical value is the core of new drug research and development evaluation

According to the latest forecast made by IQVIA
.

Since the introduction of the 18A policy of the Hong Kong Stock Exchange and the opening of the Shanghai Stock Exchange’s Science and Technology Innovation Board, biopharmaceutical companies have been allowed to raise funds through IPOs without profit, which not only provides innovative pharmaceutical companies with a broader financing platform It also provides a more convenient channel for the withdrawal of capital and greatly stimulates the enthusiasm of capital to participate in innovative investment
.

Faced with this problem, the capital side has already begun to respond.

The big waves are scouring the sand.