Where are the growth drivers of local CRO/CDMO companies?

Recently, some companies in the CRO/CDMO field in China have begun to announce their 2021 results, including the local giant "WuXi" series
.
In the past one or two years, CRO/CDMO companies have experienced dramatic changes in the stock market, with sea flames, ups and downs
.
Going out of the sky and going down to the altar, singing bad and applauding, in the CRO "stock war", there is no shortage of grass and trees, and there are things like bows and snakes
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But it is precisely these real and strong responses that reflect the level of attention this industry has received
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This article sorts out the performance of some local CRO/CDMO companies disclosed in 2021, and objectively and rationally analyzes the operation status, business capabilities and growth momentum of these companies in 2021
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"Though it's hard work, it's hard work, but it's gold.
" In the field of CRO/CDMO, which company has demonstrated "resourcefulness" in the past? Which one will stand out? Revenue growth is more than 30%, and overseas business market is large.
This article has sorted out the performance of some local CRO/CDMO companies that have been disclosed in 2021.
The data comes from annual reports or performance reports
.
WuXi AppTec: According to the annual report released by WuXi AppTec, the operating income in 2021 is about 22.
902 billion yuan, a year-on-year increase of 38.
5%; the net profit attributable to shareholders of listed companies is about 5.
097 billion yuan, a year-on-year increase of 72.
19%.
Both revenue and net profit are achieve new breakthroughs
.
This is the first time that the company's revenue has exceeded the 20 billion yuan mark since its listing on A-shares and H-shares in 2018, doubling the 9.
614 billion yuan in 2018; its net profit exceeded 5 billion yuan for the first time, more than 2.
2 times the 2.
261 billion yuan in 2018
.
From a business perspective, among the five major business segments, except for the cell and gene therapy CTDMO business, which saw a slight decline, all other segments of WuXi AppTec achieved steady growth.

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Among them, the chemical business realized revenue of 14.
087 billion yuan, a year-on-year increase of 46.
93%, the testing business realized revenue of 4.
525 billion yuan, a year-on-year increase of 38.
03%, the biology business realized revenue of 1.
985 billion yuan, a year-on-year increase of 30.
05%, and the cell and gene therapy CTDMO business realized revenue 1.
026 billion yuan, a year-on-year decrease of 2.
79%, and the domestic new drug research and development service department achieved revenue of 1.
251 billion yuan, a year-on-year increase of 17.
47%
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It can be seen that the chemical business is still the "top stream" of its performance, thanks to the company's completion of the synthesis of more than 310,000 new compounds in 2021, enabling early small molecule new drug research and development customers, and becoming an important "flow" of the company's downstream business department.
entrance"
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For the domestic new drug R&D service business, WuXi PharmaTech expects revenue to decline in 2022
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Investigating the reason, it euphemistically explained that the business of the domestic new drug research and development service department will be iteratively upgraded in 2022 to meet the higher requirements of customers for domestic new drug research and development services.

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WuXi AppTec said that 2022 will be a turning year for the development of cell and gene therapy business.
Since the second half of last year, biopharmaceutical stocks have fallen into a trough period, and CRO companies have been under pressure to report on investment in pharmaceutical shares, equity, and funds.
2022 New breakthroughs are expected in this year
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From a market perspective, in 2021, the international market will be WuXi AppTec's "main battlefield"
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Among them, the revenue from US customers was 12.
146 billion yuan, a year-on-year increase of 37.
1%; the revenue from European customers was 3.
719 billion yuan, a year-on-year increase of 40.
3%; the revenue from Chinese customers was 5.
802 billion yuan, a year-on-year increase of 40.
0%; A year-on-year increase of 40.
7%
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As a local giant, WuXi AppTec fully utilizes the advantages of global layout and whole industry chain layout, and ensures business continuity through global linkage in a timely manner
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During the reporting period, the company provided services to more than 5,700 active customers from more than 30 countries around the world through 31 operating bases and branches around the world
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WuXi Biologics: In 2021, WuXi Biologics will achieve operating income of 10.
290 billion yuan, a year-on-year increase of 83.
3%; net profit will be 3.
509 billion yuan, a year-on-year increase of 110.
9%
.
From a business perspective, the company said that there are several major factors driving the company's performance growth in 2021: first, the production business revenue has achieved significant growth; second, new non-new crown comprehensive projects have driven revenue and market share; third, the implementation of existing and New orders brought by new crown projects; fourth, implement the strategy of "follow and win molecules", add more late-stage clinical projects, and improve recent income; fifth, increase capacity utilization and operational efficiency
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From the market perspective, WuXi Biologics' revenue also mainly comes from the international market, and it has a strong growth in the European market
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The data shows that North America accounted for 50.
8% of revenue, a year-on-year increase of 110.
9%; Europe accounted for 22.
1%, a year-on-year increase of 409.
7%; China accounted for 24.
4%, a year-on-year increase of 2%, and other regions accounted for 2.
7%, a year-on-year increase of 23.
2%
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The same as the "WuXi" department, WuXi Biologics also targets the world.
At present, the company has cooperated with 20 major pharmaceutical companies in the world
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In addition, WuXi Biologics' previous two companies were listed on the "Unverified List" of the U.
S.
Department of Commerce is also expected to be resolved as soon as possible
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Chen Zhisheng, CEO of WuXi Biologics, revealed at a recent media conference that the U.
S.
Department of Commerce has initially agreed to its China-based agency to conduct on-site inspections of the two entities listed on the list, and wait for the U.
S.
-China Ministry of Commerce to finalize the inspections.
After the on-site inspection is completed, the matter is expected to be put on the agenda to eliminate the negative impact on the company as soon as possible
.
Proton Co.
, Ltd.
: In 2021, Proton Co.
, Ltd.
will achieve an operating income of 3.
105 billion yuan, a year-on-year increase of 50%
.
During the reporting period, the company's revenue contribution mainly came from the CDMO business of the core business segment API, which achieved an operating income of 3.
069 billion yuan, a year-on-year increase of 51%
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The preparation CDMO business achieved a breakthrough of "from 0 to 1", and achieved an operating income of 20.
16 million yuan
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Gene cell therapy CDMO business achieved operating income of 13.
87 million yuan, an increase of 897% over the same period last year
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From the perspective of the customer's location, the European market, as the company's largest market, will achieve a year-on-year increase of 40% in operating income in 2021; the second and three largest markets are the North American market and the Chinese market, respectively, and the operating income has increased significantly by 71% during the reporting period.
and 110%
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With the continuous enrichment and expansion of customer pipelines and product pipelines, as well as the further improvement of R&D technical capabilities and product delivery capabilities, the company's overall business for the domestic and international markets has achieved sustained and rapid growth
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This is also the third year in a row that the company has achieved high performance growth since it further promoted the strategic transformation of the CDMO end-to-end one-stop service platform in 2018 and entered a performance inflection point
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Kanglong Chemical: Kanglong Chemical will achieve operating income of 7.
444 billion yuan in 2021, a year-on-year increase of 45.
00%; net profit attributable to the parent company of 1.
661 billion yuan, a year-on-year increase of 41.
68%
.
The company's business can be divided into four major service sectors: laboratory services, CMC (small molecule CDMO) services, clinical research services, macromolecules and cell and gene therapy services according to the main business types
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In terms of market, Pharmaron's main revenue in 2021 will come from the North American market, with North American customers accounting for 64.
20%, European customers (including the UK) accounting for 15.
63%, Chinese customers accounting for 17.
13%, and other Revenue from regional customers accounted for 3.
04%
.
, about 90% of the company's revenue comes from customers including the world's top 20 pharmaceutical companies, of which the revenue from customers of the world's top 20 pharmaceutical companies accounts for 18.
97% of the company's operating revenue
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At the same time, the company is actively expanding its customer base, introducing more than 800 new customers in 2021
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Tigermed: From January 1, 2021 to December 31, 2021, Tigermed achieved operating income of 5.
214 billion yuan, a year-on-year increase of 63.
32%; net profit attributable to the parent company was 2.
874 billion yuan, a year-on-year increase of 64.
26%
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Tigermed focuses on contract research organizations (CROs) that provide professional services for the whole process of clinical trials for new drug research and development, and provides comprehensive and comprehensive clinical research solutions for global pharmaceutical and medical device innovation companies
.
The main products are clinical trial technical services, clinical trial related services and laboratory services
.
Medicilon: The performance report of Medicilon shows that the operating income in 2021 will be 1.
167 billion yuan, a year-on-year increase of 75.
27%; the net profit attributable to the parent is 282 million yuan, a year-on-year increase of 117.
93%
.
During the reporting period, benefiting from the continuous increase in the encouragement of the state’s policies on the pharmaceutical industry and the continuous increase in the investment in innovative drug research and development by pharmaceutical companies, the company has firmly grasped the development opportunities of the pre-clinical CRO market while optimizing its business structure.
The development ability and order acceptance ability were simultaneously improved
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Zhaoyan New Drug: According to the previous performance report released by Zhaoyan New Drug, the operating income in 2021 will be 1.
517 billion yuan, a year-on-year increase of 40.
99%; the net profit attributable to the parent is 557 million yuan, a year-on-year increase of 76.
83%
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Zhaoyan New Drug said that the company has always strengthened technological innovation, and has taken the lead in establishing and standardizing the industry's innovative drug evaluation technology platform
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Continued to strengthen R&D support for innovative drugs and original innovations of new technology platforms, and won the trust of innovative R&D enterprises.
New orders for the year exceeded 2.
8 billion yuan.
As of the end of the reporting period, orders in hand exceeded 2.
9 billion yuan
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Other CRO/CDMO companies will also disclose their performance one after another, and follow-up will make further explanations
.
Growth Power of CRO/CDMO Enterprises A group of CRO/CDMO enterprises in the early stage of China were driven to grow by the influence of foreign pharmaceutical enterprises.
Although they started late, they developed rapidly.

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According to forecasts, the outsourcing ratio of China's pharmaceutical R&D investment will increase from 39.
4% in 2021 to 49.
9% in 2026, and the global pharmaceutical R&D investment outsourcing ratio will increase from 43.
0% in 2021 to 52.
7% in 2026
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In the past two years, local CRO/CDMO companies have risen from the ground up one after another, and they have come strong
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CRO/CDMO companies can grow rapidly.
In addition to their role in reducing costs and increasing efficiency, they also benefit to a large extent from the continuous expansion of the global pharmaceutical market, the support for innovation by the new domestic pharmaceutical policy, and the enhancement of China's local pharmaceutical innovation capabilities.
and other factors
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The role of cost reduction and efficiency enhancement: Under the dual pressure of increased R&D costs and patent cliffs, and also affected by the limitations of their own R&D talents, pharmaceutical companies gradually tend to choose pharmaceutical R&D and production outsourcing services to reduce the cost of drug R&D
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In addition, CRO/CDMO enterprises can also improve the company's R&D efficiency and share R&D risks.
These roles provide a solid foundation for the market development of CRO/CDMO
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Expansion of the global pharmaceutical market: With the accelerated progress of the aging of the global population, the expansion of the population of chronic disease patients, and the increase in the total investment in medical and health care in various countries, the global and Chinese pharmaceutical markets will continue to develop, which in turn drives the continued investment in pharmaceutical R&D and production.
increase
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In the future, the global pharmaceutical research, development and production market scale and the Chinese pharmaceutical research and development and production market scale are expected to maintain good growth, further providing a broad stage for the development of CRO/CDMO
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Policy factors: China's pharmaceutical industry has shifted from imitation-based to innovation-based strategies, reform of my country's drug and medical device review and approval system, marketing licensee system (MAH), generic drug consistency evaluation and volume procurement, and innovative drug medical insurance negotiation The continuous advancement of a series of policies will drive the domestic market demand for innovative drug R&D and production to continue to grow
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China's local pharmaceutical innovation capabilities are enhanced: First, the innovation capabilities of pharmaceutical companies are enhanced to expand the demand for CRO/CDMO.
For example, the rise of emerging Biotech has driven changes in the structure of innovative drug R&D and promoted the growth of CDMO market demand; second, the innovation capabilities of CRO/CDMO have been enhanced to improve outsourcing services.
For example, CRO/CDMO companies represented by the "WuXi" department continue to expand high-quality business, demand drives supply, and supply promotes demand, forming a virtuous circle
.