Xinhua Pharmaceutical: difficulties in the transformation of bulk drug "big family"

After the "Wulong" incident of Hong Kong vitamin C Yinqiao Tablets, aminopyrine and phenacetin, which were named by Hong Kong Health Department, have entered the field of vision of ordinary people, and the safety of drugs containing related ingredients has also been concerned According to the Hong Kong Department of health, phenacetin and aminopyrine were once used as analgesics but were banned in Hong Kong in 1983 and 1984 respectively because of their serious side effects Phenacetin can cause hemolytic anemia, denatured heme disease and thioheme disease Aminopyrine can cause agranulocytosis Reporters found that in the listed pharmaceutical companies, Xinhua Pharmaceutical, Jilin pharmaceutical, Huadong pharmaceutical, essence pharmaceutical and so on are related to the above drugs Among them, as the largest manufacturer of antipyretic and analgesic drugs in Asia, the domestic market share of aminopyrine and analgin (aminopyrine and sodium sulfite compounds) of Xinhua Pharmaceutical is the first in China As a listed company with hundreds of raw materials and preparation products, aminopyrine and analgin accounted for more than 10% of the total sales in 2012 These drugs, which were generally stopped in developed countries at least in the 1980s, are still being produced, sold and used in large quantities in China Industry insiders believe that with the continuous strengthening of the government's supervision on drug safety, these "controversial" drugs face certain policy risks, and even the market pressure will precede the policy As the largest domestic manufacturer of two "controversial" drugs, analgin and aminopyrine, Xinhua Pharmaceutical bears more risks than other peers At the same time, the majority of low-cost APIs represented by these two kinds of drugs are also suffering from internal and external difficulties On December 12, Xinhua Pharmaceutical released the performance forecast, and it is estimated that the net profit attributable to the shareholders of the listed company in the half year of 2013 will be about 3.12 million yuan to 9.36 million yuan, down from the same period of last year "A year is not as good as a year" Check the financial data of Xinhua Pharmaceutical since 2010 According to the performance presented in the book, in the past three years, the old state-owned pharmaceutical enterprise is undoubtedly on a downward path: in 2012, the net profit of Xinhua Pharmaceutical was 23.66 million yuan, a year-on-year decrease of 68.87%; in 2011, the net profit was 76.02 million yuan, a year-on-year decrease of 21.83%; in 2010, the net profit was 97.26 million yuan, a year-on-year decrease of about Some investors use "one year is not as good as one year" to describe Xinhua Pharmaceutical For the poor performance in 2012, Xinhua Pharmaceutical explained that: the domestic and foreign market demand for API leading products is low; the sales of pharmaceutical products are affected by medical reform, bidding, anti drug restriction, etc.; the market competition of chemical products of subsidiaries is fierce, the demand is not strong, and the sales price is declining; in order to ensure the production, operation and relocation, the increase of loan leads to the increase of interest expense In such a performance, the performance of the capital market is not hard to imagine Its H share price has been running at a low level for a long time Up to now, the H share price is still hovering between HK $1.8 and HK $1.9, far below the net asset value of RMB 3.739 per share Major drugs face policy risks Several "old drugs", including analgin and aminopyrine, have brought more than ten years of fame and fortune to Xinhua Pharmaceutical Founded in 1943, Xinhua Pharmaceutical Co., Ltd was once known as the "meritorious pharmaceutical enterprise of the Republic" and created many "first" in the history of Chinese pharmaceutical industry Xinhua Pharmaceutical is the largest production and export base of antipyretic and analgesic drugs in Asia, and the world's largest manufacturer and supplier of analgin, aminopyrine, ibuprofen, aspirin, caffeine, levodopa and other drugs The market share of the eight leading API varieties ranks first in China, and the total production of antipyretic and analgesic drugs accounts for more than 25% of the Asian market Among them, through many times of expansion, the production capacity of analgin has reached 8000 tons / year Until now, although the vitality of many old brand APIs is declining and the market prospect is worrying, they are still the main challenge for Xinhua Pharmaceutical In 2012, the company's API operating revenue was 1.4 billion, accounting for 47.5%; the profit ratio was 53.55% Among them, the sales volume of analgin accounted for 9.44% of the total sales volume, and that of aminopyrine was 2.72% A pharmaceutical industry analyst believes that although there is no relevant policy in China to completely abolish analgin, aminopyrine, phenacetin and other controversial drugs, the policy risk has always been a "time bomb" for enterprises that mass produce these drugs Xinhua Pharmaceutical has experienced the "uncertainty" of the policy The fourth generation quinolones antibiotic preparation "unoxin" was once a big hand in the transformation of Xinhua Pharmaceutical According to the public information, the cultivation of "unoxin" lasted for 9 years and obtained the drug approval number in September 2011 At that time, the product was regarded as "another heavyweight product listed in the domestic antibiotic market, and also an important achievement of Xinhua Pharmaceutical's transformation strategy to preparations in recent years." For Xinhua Pharmaceutical, "unoxin" is "the company's first success in scientific research and development during the 12th Five Year Plan period" According to the idea, the product will "rapidly grow into the main anti infection drugs of Xinhua Pharmaceutical" On August 1, 2001, the "anti drug restriction order", which is known as "the strictest in history", was officially implemented The antibiotic production enterprises of state-owned enterprises entered the winter overnight, the whole antibiotic industry accelerated the reshuffle, and the scale and profits of the production enterprises fell sharply Now, it has been nearly a year since the anti drug restriction order was implemented, and Xinhua Pharmaceutical, a 9-year-old research and development achievement, has been hard to find in the public information since then Low demand for API Market In addition to the potential policy risks, Xinhua Pharmaceutical also faces the dilemma of the overall environment of API market It is understood that since the second half of last year, the overall demand of API in the international market has continued to be depressed, and domestic API enterprises generally have excess capacity and competitive prices At the same time, the EU and the United States are increasingly strict in the supervision of imported APIs "Therefore, the adjustment of product structure is necessary This structural adjustment may be based on the research of pharmacology, toxicology and side effects of the drug itself Some "old drugs" with larger side effects will become more and more apparent with the clinical monitoring of drug side effects " Zhou Yan, Secretary General of China Chemical Pharmaceutical Industry Association, said, "when new and alternative drugs appear, some" old drugs "with more side effects may be gradually stopped This is objective " "But the main reason for the adjustment of product structure is that the old way of low-cost development of API enterprises is not feasible, and the adjustment is imperative." Zhou Yan said, "in the past, China's pharmaceutical industry used to focus on raw materials and light preparations, with a good foundation for API development In addition, China's low labor cost and almost negligible environmental protection cost With the transfer of international API industry, domestic API enterprises have grown rapidly, with a general overcapacity After more than 30 years of reform and opening up, environmental pollution has become a prominent problem Green production and environmental protection have been raised to an unprecedented level At the same time, China's labor cost has also been greatly increased The extensive economic model of high pollution, low level repetition and low cost development will surely come to an end " Xinhua Pharmaceutical is the most typical representative of this "old brand API enterprise" Guo Fanli, manager of the industry research department of CIC, believes that some of the main products of Xinhua Pharmaceutical are in the late stage of the life cycle, and if the enterprise does not adjust the product structure in time, it will be eliminated by the market 6 years since the announcement of transformation In fact, the voice of "transformation" of Xinhua Pharmaceutical has been sung for a long time In, Guo Qin, then president of Xinhua Pharmaceutical, said that the development strategy of Xinhua Pharmaceutical "has been adjusted to vigorously develop preparations while continuing to consolidate APIs." "We have long recognized the importance and urgency of adjusting the product structure," Guo said at the time If Xinhua Pharmaceutical does not adjust its product structure, it will be eliminated by history, which is not sensational " Not only Xinhua Pharmaceutical, domestic API enterprises are affected by many factors and their profits are declining year by year It is an inevitable choice for many traditional API enterprises to enter the pharmaceutical market In the process of transformation of preparations, Xinhua Pharmaceutical put forward the slogan of "making bigger and more compulsory agents" At the same time, four categories of drugs, namely antipyretic and analgesic drugs, cardio cerebral vascular drugs, anti infective drugs and anti-tumor drugs, were taken as the main research and development direction of new products The head of Xinhua Pharmaceutical previously said that the so-called "stronger and bigger preparations" refers to the development of high value-added products, even products with independent intellectual property rights; the cultivation of several preparations with sales of over 100 million, and the plan to increase the proportion of preparations in total revenue to about 50% by the end of the 12th Five Year Plan At least six years have passed since the public announcement of the transformation of preparations According to the 2012 annual report, preparations produced by Xinhua Pharmaceutical accounted for 20.1% of the total sales As before, there are only two years left to achieve the goal of 50% Zhang Daiming, chairman of the board of directors, previously said that when the international pharmaceutical processing cooperation center with an annual output of 20 billion pieces is put into operation, the product structure and scale of the company will achieve greater strides Cao Changqiu, Secretary of the board of directors of Xinhua Pharmaceutical, told the Beijing news that the sales of the company's main products, analgin and aminopyrine, are still normal, but considering the life cycle of the old products, the company has already begun to transform its layout The effect of huge amount of research and development of new drugs is not obvious It is understood that Xinhua Pharmaceutical invests nearly 100 million yuan in new drug research and development every year According to the public information, in addition to traditional drugs, the company has also increased R & D investment in cutting-edge drugs such as cardio cerebrovascular drugs, digestive system drugs, anti-tumor drugs and anti metabolism drugs For the market situation after the advent of vigorously developed preparations such as hepatitis B and anticancer drugs, Xinhua Pharmaceutical did not disclose relevant detailed data In terms of financial statements, the sales of all preparations accounted for only 20.1% of the total An investor left a message on the official website of Xinhua Pharmaceutical in "company interaction" and asked: "how is the sales of Anka (irisquinone capsule)? After 20 years of product research and huge investment in R & D, the product has not yet become a single product of the company's big brand Does it indicate that the company's product R & D development is insufficient? " To this end, Xinhua Pharmaceutical's response is just a simple sentence: "Anka's sales have increased in recent years." Zhang Daiming, chairman of the board of directors, previously said that a number of cardiovascular and cerebrovascular drugs, including simvastatin, fasudil and amlodipine, will be put on the market next year Transformation has not brought visible benefits If the profit chain of the main products breaks, what products can be continued in time? "Xinhua Pharmaceutical develops the concept of anticancer drugs, the concept of hepatitis B drugs, and the concept of diabetes But none of these new approaches has brought tangible benefits " According to an industry analyst "In the future, enterprises need to develop professionally under the scale." Zhou Yan said that the old enterprises with API foundation should combine the changes of clinical disease spectrum with their own technical advantages, brand advantages and management advantages