What is the largest increase in Hengrui, Shanghai Pharmaceuticals, CSPC, and Yangtze River's impact on the top 20 global pharmaceutical companies?

2015 and 2020 are two watersheds in the development of China's pharmaceutical industry

After the drug review reform in 2015, China's pharmaceutical industry has shifted from an era when marketing was king to an era with innovation as its core competitiveness

In 2020, after five years of innovative practice, marked by the "failure" of traditional Chinese pharmaceutical companies in PD-1, traditional pharmaceutical companies and innovative pharmaceutical companies have begun to compete head-on

Whether it has benefited from the past innovation preparations or the transformation after being "forced" by innovative pharmaceutical companies, in 2021, the innovation layout of traditional pharmaceutical companies will begin to accelerate

News about the layout and innovation of traditional pharmaceutical companies have emerged.

How do traditional pharmaceutical companies take the path of innovation and transformation? In the next five years of stock game and incremental grabs, whoever can make the first move will be able to rely on the accumulated production and sales advantages to maintain their original position in the next market competition, or have some advantages.

In fact, in the final analysis, the transformation and upgrading of pharmaceutical companies is nothing more than two paths: endogenous and extended.

The first step of the layout is to start with looking for increments based on the advantages of the long board

Hengrui, Shanghai Pharmaceuticals, CSPC and other Chinese companies that have entered the global top 50 pharmaceutical companies are already outstanding in the local market

01 Hengrui’s growth is internationalization and mergers and acquisitions

Hengrui has done well enough in the Chinese market, the market value of the pharmaceutical industry is the largest, and continuously high R&D investment has brought a brand new product line

In 2017, Hengrui Pharmaceutical's revenue was 13.

At the product level, Hengrui's growth is in three aspects:

The first is tumor medicine

The second is the layout of new areas, such as chronic diseases

The third is the field of rare diseases

At the market level, Hengrui's increase is the further expansion and deepening of the international market

To be fair, Hengrui's achievements in the commercialization of international markets have been lacklustre

Internationalization, as an important support for Hengrui Pharmaceuticals to achieve leapfrog development in the future, will definitely be the focus of its current business development
.

In fact, internationalization is a common problem faced by traditional Chinese pharmaceutical companies
.
In the US market, generic drugs can't beat India, and innovative drugs cannot compete with multinational pharmaceutical companies such as Europe, America and Japan
.

Hengrui's method has not deviated from the traditional methods of expanding overseas markets by traditional pharmaceutical companies.
The generic method has accelerated the registration efforts and opened up emerging markets in addition to the mainstream markets in Europe, America and Japan
.
At the same time, we will promote overseas clinical trials of innovative drugs, accelerate the construction of overseas localized R&D teams, and strive to achieve overseas marketing of innovative drugs as soon as possible
.

In addition, in addition to independent research and development, Hengrui's extensional innovation layout has continued to expand in the past two years.
It has invested in Yingli Pharmaceutical and Ruishi Biological.
At the same time, together with Sun Piaoyang, it has invested in the establishment of Ruilidi (Shanghai) Biomedical Co.
, Ltd.
In the development of antiviral drugs
.

Among the top 50 global pharmaceutical companies in 2021, Hengrui Medicine ranks 38th, 45 billion yuan behind Teva, which ranks 20th
.
Entering the list is not the goal, but how to continue to introduce new innovations while being surrounded by innovative pharmaceutical companies and have international competitiveness is a challenge Hengrui needs to face
.

Generally speaking, there are two paths: after the innovative drug is listed in the mainstream market, it becomes a blockbuster with annual revenue of over US$1 billion; or it "subverts" Hengrui's past development genes and completes a major acquisition
.
Except for the newly established Huizhi, the top 20 companies in the world's top 50 pharmaceutical companies are all after a number of mergers and acquisitions to achieve their current size
.

02 The increase of Shanghai Pharmaceuticals is the integration of resource collection and digestion

Shanghai Pharmaceuticals is a well-deserved "elephant" in China's pharmaceutical industry
.
The annual revenue is close to 200 billion yuan, of which 168.
2 billion yuan is commercial and 23.
7 billion yuan is industrial
.

In 2020, it was included in the Fortune Global 500 list, ranking 473th, and it is one of only two Chinese pharmaceutical companies
.
In the same year, it ranked 48th among the top 50 pharmaceutical companies in the world in terms of sales of prescription drugs
.
In 2021, it will jump 6 places to 42nd among the top 50 pharmaceutical companies in the world
.

The advantage of Shanghai Pharmaceuticals is that it has a large market and a solid foundation, and as a large-scale state-controlled pharmaceutical company, it has obvious advantages compared with other pharmaceutical companies in terms of the ability and tension to mobilize resources
.

Shanghai's pharmaceutical industry segment has revenues of 23.
7 billion yuan, a gross profit margin of 58%, and more than 42 single products over 100 million yuan
.
But as of June 2021, its price-earnings ratio is only 7, and the total market value is around 60 billion yuan
.
In a sense, the investment value of Shanghai Pharmaceutical's industrial sector is seriously underestimated by the capital market: the average price-earnings ratio of the pharmaceutical manufacturing sector is 65, while Shanghai Pharmaceuticals is far below this
.

But like the two sides of a coin, from another perspective, advantages may become a challenge that affects its development: how to balance the relationship between corporate ownership and market operation, how to simplify complexity, and to operate flexibly on a large-scale basis
.

However, fortunately, Shanghai Pharmaceuticals is activating its innovative strength in various ways, and is making a comprehensive layout in terms of tapping potential and incremental expansion of its stock
.

In 2018, the commercial sector jumped from No.
3 to No.
2 in China by virtue of its acquisition of Cardinal China, and set up an overseas headquarters in Hong Kong, taking an important step towards internationalization
.

In 2019, the first phase of the stock equity incentive plan was implemented, and the market-based incentive mechanism was truly incorporated into the company's management
.

R&D investment has increased year by year, from 600 million yuan in 2015 to nearly 2 billion yuan in 2020, which has brought about a continuous increase in innovative drugs under research.
As of the end of 2020, it has reached 25, and 15 have entered the clinical or market stage
.

In addition, Shanghai Pharmaceuticals has continued to expand the ecosystem construction, focusing on the field of innovative drugs, and reached a strategic cooperation with CanSino Bio; led the participation in the A round of financing of Chengdu Wesker Biotech; Rio Tinto's rare disease drug field, officially established and operated Shanghai Shanghai Pharmaceuticals and Rare Diseases Pharmaceutical Co.
, Ltd.
; Cornerstone invests in Ailis Pharmaceuticals on the Sci-tech Innovation Board and Saisheng Pharmaceuticals of the Hong Kong Stock Exchange; co-built an "production-university-research" platform with a number of universities, medical institutions, and scientific research institutes, and successfully transformed it including CAR -Multiple frontier projects including T cell therapy; participated in the first phase establishment of the 50 billion Shanghai Biomedical Industry Fund, and formed strategic synergy in multiple aspects such as high-quality target identification, early project incubation, and innovation field layout
.

In May 2021, following the announcement that Yunnan Baiyao plans to invest 11.
229 billion yuan in a strategic investment in Shanghai Pharmaceuticals and may become the second largest shareholder, Shanghai Pharmaceuticals' subsequent discoveries have left enough room for imagination in the industry
.

Yunnan Baiyao has rich experience in mixed ownership reform.
In addition, it has accumulated a lot of valuable experience in the creation of traditional Chinese medicine, health care products, and consumer products
.
The Chinese medicine and health products business is an important part of Shanghai's pharmaceutical industry.
At the Chinese medicine level, it has a full industry chain business system from Chinese medicinal materials planting, Chinese herbal medicines, Chinese patent medicines to Chinese medicine clinics; at the health care product level, Shanghai Pharmaceuticals acquired Australia in 2016.
Vitaco, a health care product company, has a wide range of health care products; in addition, Shanghai Pharmaceuticals also has a series of medical and beauty health products such as probiotics, anti-aging, and saffron
.
More importantly, under the trend of centralized procurement and medical insurance control fees, the price of health care products is determined by the market
.

In fact, in order to achieve the synergy between the traditional Chinese medicine and health products sector, on the second day after Shanghai Pharmaceuticals announced the announcement of the fixed increase of Yunnan Baiyao, Shanghai Pharmaceuticals signed a strategic cooperation framework agreement with Yunnan Baiyao and Tianjin Pharmaceuticals to jointly build a "Yun Tian Shang • Rejuvenating the China Excellent Traditional Chinese Medicine Industry Alliance", one of the goals is to create a large variety of Chinese medicine
.
This action is also considered by the industry to be that Shanghai's pharmaceutical industry sector is expected to enter the top 20 global pharmaceutical companies by relying solely on the incremental expansion of the Chinese market
.

In this fundraising, Shanghai Pharmaceuticals plans to raise a total of 14.
384 billion yuan from Shanghai Industrial Group and Yunnan Baiyao.
After the fundraising is completed, it will be allocated according to the fund-raising use previously announced by Shanghai Pharmaceuticals, except for 3 billion yuan to return the company’s debts.
More than 10 billion yuan is mainly used for the promotion of innovative drug R&D pipelines, the construction of R&D bases and R&D platforms, and the introduction of BD projects
.
This also means that Shanghai Pharmaceuticals will have more drugs entering the clinical and even later clinical stages, and the launch of independent innovative drugs is already on the schedule
.

For Shanghai Pharmaceuticals, which has a history of 100 years, revenues close to 200 billion yuan and employees close to 50,000, any innovative move requires tremendous effort, but as long as the direction is right, the energy that elephants can bring after dancing is full of imagination.
Space
.

03 The increment of CSPC is a macromolecule

In 2020, the sales revenue of CSPC's patented medicines was 20.
405 billion yuan, achieving an increase of 13.
8%
.
Based on this performance, CSPC has newly entered the top 50 global pharmaceutical companies this year, ranking 44th
.

CSPC is a representative enterprise of China's raw material pharmaceutical companies in the transformation of preparations and layout innovation, and is also an excellent case of successful transformation
.
However, CSPC obviously has not kept up with the layout of the macromolecule field
.

In 2000, 8 of the top 10 innovative drugs in global sales were small molecule drugs.
Since 2008, the small molecule drugs in the Top 10 sales of innovative drugs can barely occupy half of the country.
By 2019, only 4 of the Top 10 are small molecules.
It is becoming more and more difficult for molecular drugs to reach the top 1 in sales, and the proportion of small-molecule innovative drugs in the overall market sales is also showing a gradual decline
.

At present, almost all products that contribute sales to CSPC are small molecule drugs, including Enbipu, Xuan Ning, Medosol, and Kelly
.
In the 30-page annual report of CSPC, the related sales revenue of macromolecular drugs, which has been hot in recent years, has not yet been seen
.

CSPC's 2020 annual report shows that CSPC currently has about 300 research projects, including more than 40 large-molecule innovative drugs
.

In fact, CSPC’s new drug development platform for large molecules has a history of more than ten years
.
At present, CSPC has 5 large-molecule new drug research and development platforms in China and the United States, covering early discovery, process development and transformation, process optimization and industrialization pilot trials
.

According to the information on its official website, CSPC currently has 4 macromolecular drugs in clinical phase III, namely, anti-RANKL monoclonal antibody JMT103 (hypercalcemia/giant cell tumor of bone), anti-EGFR monoclonal antibody JMT101 ( Solid tumor), anti-PD-1 monoclonal antibody SYSA1802 (tumor), omalizumab biosimilar drug
.
Among them, JMT103 is expected to be listed as early as 2022
.

In addition, CSPC also has a relatively "mysterious" macromolecular drug ALMB-0168, which is developed by Alamab Therapeutics, a subsidiary of CSPC in the United States
.
Alamab Therapeutics was established in 2017 by CSPC in the United States, dedicated to the development of the first class of antibody drugs
.

ALMB-0168 is the first humanized monoclonal antibody agonist for the new target hemichannel membrane protein connexin 43 (Cx43), which is used to treat osteosarcoma and bone metastases
.
In 2019, ALMB-0168 obtained the orphan drug qualification issued by the US FDA
.

04 Yangtze River's increment is a product

Yang Zijiang is not one of the top 50 pharmaceutical companies in the world, but in the eyes of industry insiders, she is big enough to make the list
.
Whenever the top 50 global pharmaceuticals list is released, people in the industry will wonder why there is no Yangtze River? This is indeed the biggest bug on this list in the United States, but it is also excusable
.

Although there are also two unlisted multinational pharmaceutical companies on the top 50 list: BI of Germany and Servier of France, these two multinational pharmaceutical companies have announced their global pharmaceutical business revenues, making the data available for ranking basis
.
But what exactly Yangtze River’s industrial income is has been speculated but never confirmed
.

This pharmaceutical "empire" has always been well-known in the industry for its strong commercialization capabilities
.
In April 2021, the State Administration of Market Supervision imposed fines on Yangtze River and the published administrative penalty decision revealed a corner of its sales system management
.

In a sense, Yangtze River has built an open avenue from production to end-to-end heavy-duty.
As long as products are put in, high-volume sales can be achieved
.

Therefore, the next increment of Yangtze River is more from the introduction of products, and the actions are frequent
.

In May 2021, Yangtze River Pharmaceutical and Maiwei Biotechnology reached a strategic cooperation on the domestic rights and interests of two innovative biological drugs
.
According to the agreement, Yangtze River Pharmaceutical will obtain the exclusive production and commercialization of a recombinant (yeast secreted) human serum albumin-human granulocyte colony stimulating factor fusion protein (rhG-CSF, code name 8MW0511) for injection in the cooperation area.
Chemistry rights, and the exclusive development, production and commercialization rights of a PD-1 (9MW1111) in the cooperation area
.
Regarding the PD-1 project, Yangtze River Pharmaceutical will also obtain the exclusive right to develop drugs in combination with any other one or more drugs, and Maiwei Bio will retain all the rights to develop double antibodies, polyclonal drugs and other forms of drugs
.
Both parties will share future commercialization benefits within the scope of cooperation
.

In March 2021, Yangtze River Pharmaceutical Co.
, Ltd.
, through its subsidiary Haini Pharmaceutical Co.
, Ltd.
, and Daewoong Pharmaceutical Co.
, Ltd.
of South Korea reached a partnership to obtain a new generation of proton pump inhibitor (PPI) Fexuprazan developed by Daewoong Pharmaceutical for the treatment of gastroesophageal reflux disease for a maximum of 338 million U.
S.
dollars.
R&D, sales and supply rights
.
At the end of 2020, Fexuprazan's application for Phase III clinical trials in China has been approved by the NMPA
.

In October 2020, Yangtze River Pharmaceutical and Changchun Anwo High-tech Biopharmaceutical established an exclusive strategic partnership to promote the commercialization of 8 biosimilar drugs in China
.
At that time, the founder of Yangzijiang Pharmaceutical referred to this business partnership as "an attempt by Yangzijiang in international cooperation in biosimilars" and stated that Yangzijiang's vision was to develop, manufacture and introduce high-quality biosimilars
.