Whether it is A-shares or Hong Kong stocks, investors always habitually follow foreign capital and large banks. Even if the valuation is significantly higher than that of peers, as long as the "high" target price is released, it will always attract a group of "dead loyalists". Those fine-priced stocks full of characteristics and potential are often ignored or even killed by mistake.
takes small stocks and the newest biopharmaceutical drug - Liankang Bio (00690), Zhitong Finance APP observed that under the multiple characteristics of "holding the best-selling EGF drugs, focusing on the diabetes field, striving to achieve performance, and introducing emerging strategic partners", the stock price underperformed the Hang Seng Index in the bull market in 2017, with trading volume less than 1.6 billion shares.
Market Source: Futu Securities
Exploration has caused this dilemma: Some investors blame their performance for being beautiful and not easy to gain market recognition; some investors think that their business channels are not strong enough and their competitiveness is difficult to reflect; and some even think that their R&D map is not clear enough and their future driving force is insufficient... No matter which statement, it seems to be announcing, "I ignore you, it is reasonable and well-founded." Is this true? Let us take these questions with us to find the truth from the interview with Liang Guolong, chairman of Liankang Bio, so as not to miss a potential biomedical target.
business upgrade seeks internationalization
Zhitong Finance APP: From the diversified business at the beginning of its listing to the current rooted in the pharmaceutical field, in your opinion, what are the major changes in the main business due to and what are its advantages?
Liankang Bio Liang Guolong: Liankang Group has always had a relatively clear layout in its entrepreneurship process for more than ten years:
First of all, we are the first biopharmaceutical company to be listed in Hong Kong and have been rooted in the mainland pharmaceutical market for a long time, and one of the earliest pharmaceutical companies to develop biopharmaceutical products and put them on the market. Judging from the historical nodes more than ten years ago, it is very forward-looking. At present, with the real arrival of the era of biopharmaceuticals and the era of innovation, with the advantages that our business updates can fully adapt to the changes brought by this industry and market.
Secondly, after 16 years of value accumulation and market testing, we have sufficient confidence in our existing products and market positioning, and focus on the construction of our R&D pipelines and commercial platforms. For example, establishing Liankang Yongtai Biotechnology Co., Ltd. in Beijing is used to establish a marketing team, and then conducting various preclinical and clinical trials widely, allowing "production, research and sales" to play a good synergistic effect;
Finally, thanks to years of development and summary, Liankang Group has formed an "international management, capital and strategic layout and vision, and is accompanied by localized flexible operation" model. Especially in 2017, Liankang Group was a critical year, because the group not only completed the board of directors renewal and attracted many international people, but also introduced strong strategic partners, optimized the shareholder structure, and achieved a balanced docking between international resources and the mainland market. In addition, in the promotion of the new marketing team, existing products have firmly grasped various channels in their own hands while stabilizing the original sales scale, and successfully completed the five-year plan to "promote growth".
Zhitong Finance APP: In fact, in the Hong Kong stock market, changes in main business are very "dangerous", which can easily cause investors to misunderstand and face challenges from new industries. How do you consider the "double" challenges in the transformation process?
Liang Guolong, Chairman of Liankang Biology: is not so much a business change, but a business upgrade and integration.
Our current R&D line and sales products are being planned and promoted smoothly. The overall strategy around the business has not changed. What has changed is that it is constantly improving efficiency, deepening and thoroughly, and optimizing details. During the integration process, we are also working hard to fulfill our commitments to investors and the market due to product innovation, obvious competitive advantages, and national policy support.
Through the past three years of business integration and reshaping, our goals are clearer and our strategies are clearer.
Zhitong Finance APP: It introduced Xiangjiang Group to become the company's strategic shareholder. What is the significance of this move?
Liang Guolong, Chairman of Liankang Biology: delve into the reasons for our cooperation, mainly comes from the advent of China's big health industry era and the matching and complementary advantages of each other's strategic positioning. No matter which level the cooperation between Xiangjiang Group and us will be a long-term strategic relationship, and it is by no means just to stay at the capital level.
At the same time, in addition to capital-level cooperation, because Xiangjiang Group has its own health care industry, things that meet the industrial trends and future medical needs in chronic disease management, such as drug services in chronic disease management, mining and application of chronic disease big data, R&D cooperation at the industry level, and import of excellent international R&D resources are the focus of our future cooperation.
Zhitong Finance APP: In a short period of time, will the company's equity structure continue to maintain its current status or will it continue to introduce new strategic partners? Liang Guolong, Chairman of
Liankang Bio: In the current rapid growth period, we need more suitable strategic partners to introduce and have an open attitude towards any form of strategic cooperation. It should be emphasized that strategic cooperation must not only be purely financial and capital cooperation, but also have a business and resource fit to provide assistance to the group's overall business operations.
Dermatology, ophthalmology, and diabetes medicines are all launched at once
Zhitong Finance APP: Transformation and injecting fresh blood will undoubtedly open up a new path for the company's development, but returning to the essence, the fundamental of corporate development is still a product. At present, the company is mainly concentrated in the fields of dermatology, ophthalmology and diabetes. How do you evaluate the overall performance of these three businesses? Liang Guolong, Chairman of Liankang Bio: recombinant human epidermal production factor is the earliest biological agent included by Liankang Group. Up to now, it still has strong advantages, such as Jininpeptide®, which can be used well in dermatology, burns, oral, surgery, obstetrics and gynecology, anorectal, otolaryngology, plastic surgery, radiation therapy, endocrine, etc., such as skin ulcers caused by diabetes. To date, this product and Pinap® remain the Group's two largest profit-contributing products. After September 2017, we also unlocked the restrictions on work-related injury insurance for this product, and we can foresee its strong growth in the future from the number of medical subjects alone;
ophthalmic product Jinyinshu® is one of our products that we will continue to deepen. Add to the newly entered medical insurance catalog, this product has now entered the medical insurance in seven provinces, and its potential for increasing volume has been improved again;
, and endocrine diseases such as diabetes are our main focus. Judging from the initial performance of the launch of the GLP-2 miglinide tablets that have successfully entered the medical insurance market, this product will undoubtedly be our cash bull product before the launch of the biologics. As for the exenatide water injection and long-acting agent under development, it will also bring huge benefits in the future.
Zhitong Finance APP: As you said, the company's main products are epidermal growth factors - Jinyinpeptide and Jinyinshu. So far, which provinces have won the bid for the above two products? Liang Guolong, Chairman of Liankang Biology: Jinyinpeptide® has won all bids except Zhejiang, Fujian and Qinghai, and has also entered the military coordination for the entire army to be purchased by 7 military regions and junta; Jinyinshu® has won all bids except Henan, Zhejiang and Anhui, and has also entered the military coordination for the entire army to be purchased by 6 military regions and junta.
. After winning bids across the mainland, both products will have a significant boost to sales, and are initially expected to be higher than similar winning products.
Zhitong Finance APP: Similarly, how is the situation of Pinap winning the bid? Is it expected that year-on-year growth will change and change in 2018?
Liankang Biological Chairman Liang Guolong: Pinup has won all bids in other provinces except for six provinces including Guizhou, Qinghai, and Xinjiang, and is expected to grow by about 25% by then.
Zhitong Finance APP: Diabetic product miglinide calcium tablets have completed bidding in Fujian and have participated in bidding in multiple places. To date, how is the winning bid?
Liankang Biological Chairman Liang Guolong: Following Fujian, miglinide calcium tablets have won all bids in Shanghai, Jilin, Heilongjiang, Chongqing, Sichuan, Guangdong, Qinghai, Hunan and Sichuan. The reason why we can win a large-scale bid is not only because of the price advantage, but also because our marketing network has brought miglinide to the second-level or grassroots hospitals in the above-mentioned provinces or future winning provinces, etc., to "win the basics."
two-invoice system has little impact on the company
Zhitong Finance APP: Under policies such as medical insurance cost control, reducing drug prices has become a major trend. How do you view the pressure on the company's production and operation of medical insurance bidding?
Liankang Biological Chairman Liang Guolong: Indeed, bidding price reduction is a major trend, and since the mandatory bidding in 2015, provincial bidding has become a standard practice in many provinces. Therefore, to respond to this trend, our Group has established a multi-functional task force, including this market access team and senior management. The task force uses internal specialized tracking tools to regularly review provincial bidding status to ensure effective management of the bidding process for three of its products sold.
Under the management of this group, the group's product strategy focuses on the development of competitive innovative therapies, and has successfully achieved "price for volume", entered the medical insurance catalog in many provinces, reducing the operating pressure on the group by bidding.
Zhitong Finance APP: Under the two-ticket system, the company has also begun to actively optimize the distribution team and take the path of academic promotion. So far, how have you planned your company's commercialization platform?
Liankang Biological Chairman Liang Guolong: First, our group plans to vigorously expand the scale of its internal sales team and regional distributors; secondly, we seek to establish partnerships with contract sales agencies or large pharmaceutical companies to expand its sales and marketing scope in the mainland.
Zhitong Finance APP: In addition, the company has handed over Jin Yinshu's sales work to China Resources Zizhu. What are the positive impacts of this measure on the company?
Liang Guolong, Chairman of Liankang Bio: After reached a partnership with China Resources Zizhu, Liankang changed the sales model of Jinyinshu®. After that, sales and distribution expenses will be deducted from revenue to offset them. In the first half of 2017, the company's sales and distribution costs fell by about 19.3% compared with the same period last year, which is all benefiting from this measure.
Our cooperation with China Resources Zizhu not only increases and diversifies the company's revenue sources by expanding Jinyinshu®'s footprint, but also expands the company's sales and improves operating performance.
Uni-PTH is the top priority in the R&D sector
Zhitong Finance APP: In addition to existing products, the most important thing for investors is the company's R&D. At present, what is the overall situation of the company's products under development? Liang Guolong, Chairman of Liankang Biological: In the short term, both R&D speed and investment will be further accelerated, and new products will be launched as quickly as possible; the characteristics of the medium and long-term R&D line are not only rich but also extremely innovative, and we will also use our own R&D platform to contact more R&D entities and teams in order to cooperate in R&D and transform new drug results.
Zhitong Finance APP: The company has been studying Uni-E4 and Uni-PTH for a long time, and has now entered the third phase of clinical practice. How is the time to go public? What is the potential of the application market for these two products? Liang Guolong, Chairman of
Liankang Biology: Uni-E4 has submitted the new drug application in 2017, and is expected to be launched in 2019; the application for new drug for Uni-PTH has been completed as early as April 2015, and is expected to be launched in 2018 according to the R&D promotion table. The products of
are very competitive in both the treatment field and the price, especially the innovative advantages of PTH. Although it seems to have increased the R&D time in the short term, the technical content makes the product more competitive, and other competitors are also in the clinical stage, and there are no real competitors.
It is worth mentioning that PTH's powder needle has been submitted for production, and the next step is on-site verification by the regulatory authorities.
Zhitong Finance APP: When Uni-EPO-Fc was conducting Lb experiments, it was previously revealed that "the hospital team believes that there are problems with the clinical data." Afterwards, the company changed the hospital. Can this matter be explained in detail?
Liang Guolong, Chairman of Liankang Biology: EPO is a new type of drug. Because it is a new drug, it is normal for some adjustments in the first phase of the trial. After all, drugs are all results obtained through millions of tests and inspections. Moreover, it is not our reason to replace the hospital. First, we conducted a phase test at Shanghai Changhai Hospital. Later, due to the adjustment of drug measurement, we continued clinical trials in a hospital in Wuhan in April 2015. Later, when the hospital was subject to national 722 policy verification, all the projects of the hospital were stopped due to the hospital's own problems, and we had to replace them with a new hospital.
As of now, we have upgraded our EPO process and are preparing to sign a contract with a new hospital. It is expected that single-dose and multi-dose research for anemia patients will be carried out in the second half of 2018 and 2019, and then the phase III clinical trial will be successfully carried out.
Zhitong Finance APP: Which product do you think will be the most likely to increase the company's valuation and become the fulcrum for the stock price to rise?
Liankang Biological Chairman Liang Guolong: The social and economic benefits of PTH are immeasurable. Under the influence of market potential, medical insurance costs, etc., this product can definitely become the fulcrum for the stock price to rise.
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