Under the vigorous development of the CXO industry, investment and financing may continue to be active!

【Pharmaceutical Network Market Analysis】Recently, CRO company Huateng Bio announced the completion of a round of financing
.

The funds raised from this round of financing are mainly used for the construction of the human disease large animal model resource bank and the expansion of preclinical CRO service capacity
.

Huateng Biology said it will strive to build itself into the largest large-scale animal research and development and production base for human diseases in the Guangdong-Hong Kong-Macao Greater Bay Area, and is committed to providing one-stop pre-clinical evaluation services
for drugs, medical devices, genes and cell therapy.

Antibody Discovery CRO Baiying Biotech also announced the completion of a round of nearly 500 million yuan B round of financing
.

The financing amount of this round will be mainly used for the expansion of CRO service capacity, the construction of intelligent manufacturing R&D service production lines, and the continued strengthening of overseas channels
.

The industry said that the CXO industry belongs to the human capital intensive industry, and its rapid development is inseparable from the increase
in investment in the industry.

However, from the recent data, especially in July, the intensity of investment and financing activities in the primary market has actually decreased, why is this? Southwest Securities once commented that the amount of investment and financing and the number of events fell simultaneously month-on-month, mainly due to the recent setback in the stock price of the pharmaceutical sector, which slightly affected
the sentiment of the primary market.

It believes that the short-term related CDMO large-scale orders superimposed endogenous business continue to increase at a high rate, and the CXO industry is still a track
with both certainty and growth.

Debon Securities pointed out that from 2021 to 2022, due to factors such as policy + short-term investment and financing, the valuation of the CXO industry has been adjusted to a historical low, and the allocation is cost-effective
.

So, will the investment and financing of the CXO industry continue to be active? CITIC Securities recently expressed the view that according to the data of the artery network, the total amount of investment and financing in the global medical and health industry in 2022H1 reached 42.
7 billion US dollars, compared with the average annual compound growth rate of nearly 16% in 2020H1, which is still at a high level in the past decade; During the same period, the authorized cooperation/trading is very active and is obviously more inclined to the early stage, so it is judged that the market is gradually entering an "active and rational" state
.

It said that the activity of industry mergers and acquisitions and XBI are strong correlation indicators
of the activity of global biomedical investment and financing.

In 2022Q2, the activity of mergers and acquisitions in the industry has rebounded, and XBI has also ushered in a bottoming out.


The overseas representative CXO head 22H1 orders in hand maintained steady growth, customer inquiry / order demand is still booming, and expectations are optimistic
.

Judging from the performance of domestic CXO companies H1, the performance of most companies is also very eye-catching
.

It is understood that among the listed pharmaceutical companies that have released the mid-report, the CXO segment has a rapid momentum, as of August 30, A-share 29 CXO listed companies have issued semi-annual reports, and 21 net profits have increased year-on-year, accounting for more than 70%.
The revenue and attributable net profit of the four companies increased by more than 50%, namely Boteng Shares, Gloria Ying, WuXi AppTec and Jiuzhou Pharmaceutical
.

Among them, the net profit revenue of Boteng shares and Kai lai Ying has doubled, and Boteng shares have achieved revenue of 3.
914 billion yuan in the first half of the year, an increase of 211.
67% year-on-year; Net profit attributable to shareholders of listed companies was 1.
212 billion yuan, an increase of 465.
01% year-on-year; Non-net profit attributable to shareholders of listed companies was 1.
211 billion yuan, an increase of 501.
87%
year-on-year.

Gloria Ying also doubled its revenue and net profit, recording operating income of 5.
034 billion yuan in the first half of the year, an increase of 186.
75% year-on-year; Net profit attributable to the parent company was RMB1.
74 billion, an increase of 305.
31% year-on-year, and basic earnings per share were RMB4.
75
.

CITIC Securities expects that global biomedical investment, financing and mergers and acquisitions will continue to be active, supporting the iterative increase in global biomedical R&D and outsourcing needs; China's CDMO industry is expected to rely on the continuous accumulation of early pipelines in the field of global biomedical innovation technology, and the medium- and long-term growth engine will enter the era of "engineer dividend" + "leading innovation dividend" dual-core drive, and the industry's long-term outsourcing rate and leading market share ceiling are expected to increase
accordingly.

Optimistic about the domestic CXO industry, especially the medium- and long-term growth of
global CXO companies.

Disclaimer: In no event shall the information or opinions expressed herein constitute investment advice
to any person.