"kill valuation", looking at the A and H stock markets, all sectors have entered a period of make up for decline, and even the "long-lasting" liquor has begun to decline, making investors shout, "It's bottomed out." Because from historical experience, the rebound of liquor is all about the bad days: in May 2005, transportation and liquor fell, and on June 6, the Shanghai Composite Index ushered in a market bottom of 998 points; in July 2008, agricultural, forestry, animal husbandry, fishery, liquor and pharmaceutical stocks fell, and in October, the Shanghai Composite Index ushered in a market bottom of 1664 points; in November 2012, the Shanghai Composite Index ushered in a market bottom of 1949 points in December.
"Seeing the bottom" is a surprise, and the pharmaceutical sector is also "good things get hurt." For example, after 6 years, on October 25, the country officially issued a new version of the "Basic Drug Catalog", which once again put pharmaceutical stocks on the "hot search" in the stock market. From the perspective of capital, the Shanghai Stock Exchange Pharmaceutical sector's capital flow on the next day was nearly 10 billion yuan, and the Hong Kong-listed pharmaceutical sector also reached HK$1.5 billion.
The active funds in the pharmaceutical sector also gave the "small and beautiful" Liankang Biotechnology (00690) an opportunity. After all, the general trend and policies are improving, and to gain the favor of investors, you have to "be strong in your own back". In contrast, Liankang has received official acceptance of CFDA in September with its potential products such as acarbose, exenatide , teriparatide powder needle, and has long been favored in the secondary market.
Zhitong Finance APP observed that due to the positive effects of policies and new drug processes, the stock has begun to rise positively since September 6. As of October 25, the increase reached 8 points, which is much better than the pharmaceutical sector (the decline during the period) and is far behind the star stocks.
Market source: Futu Securities
New opportunities in " basic drugs catalog"
From "520" to "685" basic drugs catalog, the Health Commission has made great efforts. Although it was officially implemented on November 1, it does not prevent us from dissecting it and exploring the benefits.
In terms of content, the 2018 edition catalog has multiple characteristics: First, the number of varieties has increased from the original 520 to 685, including 417 Western medicines and 268 Chinese patent medicines (including ethnic medicines), which can better serve all levels and types of medical and health institutions, and promote the full equipment and priority use of basic drugs;
Second, it optimizes the structure, highlights the basic drug needs of common diseases, chronic diseases, heavy burdens, major diseases and public health, and pays attention to the use of drugs for special groups such as children. The new varieties include 12 tumor drugs, which are urgently needed for children in clinical practice. 22 kinds of drugs, etc.;
Third, further standardize dosage forms and specifications. 685 drugs involve more than 1,110 dosage forms and specifications, which will be of great significance to guiding basic drug production and circulation, bidding and procurement, reasonable use of drugs, payment and reimbursement, and full-process supervision;
Fourth, continue to adhere to the equal emphasis on Chinese and Western medicine, increase the scope of function and indications, cover more clinical symptoms of traditional Chinese medicine, and strengthen clinical necessities. Among the new drug varieties adjusted this time, 11 drugs are non-medical insurance drugs, mainly clinically necessary and have accurate efficacy, such as the direct antiviral drug sofosbuvitavir. Experts unanimously believe that it can cure hepatitis C and have a correct efficacy.
Zhitong Finance APP From the perspective of the enterprise, the most concerned thing is undoubtedly the increase in varieties, because once included, it will have a positive impact on the future sales of the product. This is also the reason why many listed companies have recently released good news for their selection.
Secondly, it is a drug replacement, because 22 varieties in the new version of the catalog have been "kicked out", such as dextromycin, mycodynamicin, methyl testosterone, cod liver sodium oleate, etc. In summary, it is those varieties whose drug standards have been replaced, adverse reactions have occurred, and have low economic benefits. This also shows that having both in and out can not only keep pace with the times, encourage pharmaceutical companies to improve their quality, but also bring opportunities to companies that have not been included in the basic drug catalog.
Take Liankang Bio as an example. Its existing biological "cash bull" products, Jinyinpeptide and Jinyinshu, can be fully included in the basic drug catalog. Of course, even if you don’t enter the basic drug catalog, you will get enough nourishment just by winning bids from various places and entering the military coordination. Because in terms of performance, the "dual varieties" of "double varieties" in the first six months of this year achieved an income of HK$46.6 million.The reason why we can enter the military coordination and win bids in many provinces is obviously the best choice for quality, efficacy and economic value. In turn, the expansion of the catalog has also brought a good opportunity for Liankang's future development.
The big variety in the "Supplement Catalog"
Considering that the basic drug catalog clearly states that "local supplementation is not encouraged", many companies that originally hope to enter the local supplementation catalog are also disappointed. But from a certain perspective, it also happened to bring "time difference" opportunities to those companies that have already entered the local area to add catalogs.
According to the Zhitong Finance APP, as of July 2018, a total of 19 provinces, autonomous regions and municipalities across the country, including Beijing, Gansu, Guizhou, Hebei, Henan, Heilongjiang, Hubei, Jilin, Jiangxi, Ningxia, Qinghai, Shanghai, Tibet, Xinjiang, Jiangsu, Shandong, Anhui, Liaoning, and Sichuan, have officially released the provincial basic medical insurance, work-related injury insurance and maternity insurance drug catalog (including the 2017 transition version of Hebei Province).
Refer to the medical insurance catalogs of each province, and its changes can be described as "thousands of". Among them, Hebei Province has the highest number of supplementary Chinese and Western medicines among all provinces, reaching 635; among the supplementary Western medicines, Jiangxi Province is the province with the largest number of supplementary varieties, with 451 varieties; among the supplementary Chinese medicines, Beijing is the province with the largest number of supplementary varieties (including ethnic medicines), with 255 varieties.
drug categories have changed, from the perspective of treatment areas, among the overall supplementary Western medicine varieties entering the medical insurance drug catalog of various provinces, the top three categories are digestive system and metabolic drugs, systemic anti-infective drugs and respiratory drugs. Among them, metabolic disease - osteoporosis drugs, and teripatide injection has been supplemented to Guizhou, Anhui, Heilongjiang and other provinces.
Why is teriparatide mentioned here separately? The main reason is that the market is too large. Data shows that the total prevalence of osteoporosis in my country is as high as 12.4%, second only to circulatory diseases. A large-scale epidemiological survey and research nationwide showed that the total number of people suffering from osteoporosis in China has exceeded 160 million. It is predicted that by 2020, the number of patients with osteoporosis and low bone mass in my country will increase to 280 million, ranking first in the world.
Teriparatide is the most effective anti-osteoporosis metabolic drug, and its economic benefits are also quite spectacular. Take Eli Lilly, who developed the original drug for example, achieved sales of US$1.8 billion in 2017, which can be called a metabolic drug fighter.
So, we also see that in the context of its patents coming to an end, more and more companies are beginning to get involved. In the midterm, Liankang Biology is also at the forefront. The disclosure of the CFDA Drug Review Center on September 14 showed that the recombinant human parathyroid hormone (Uni-PTH) for injection of new drugs under Liankang Bio were officially accepted, with the acceptance number CXSS1700039.
From the drug data, Uni-PTH is better than Eli Lilly's teripatide, and in terms of dosage forms, Liankang Bio not only has freeze-dried powder, but also innovatively upgrades to make the freeze-dried powder directly turn into a water needle, which is more convenient for use and transportation. Among them, the dosage form of the freeze-dried powder injection is expected to be launched as early as 2019, and eventually become the second company in China to launch such products.
In view of the efficacy of teriparatide, it is "preference" to the period of supplementation and expansion of various provinces, and combined with the local "supplementation and expansion" needs, if Liankang Bio's Uni-PTH is released, it is obvious that it will not require any channel promotion and can be quickly included in all provinces. After all, "good drugs are always scarce." This will inevitably bring huge benefits to Liankang Bio and is expected to achieve a compound growth rate of 68% in three years.
Finally, combined with the opportunities brought by the new version of the basic drug catalog and the dependence on teriparatide in the supplementary situation of various provinces, Liankang Bio's future growth is obviously not to be underestimated with its strong intrinsic growth.
(WeChat ID: UniBio-IR)
