On October 24, the markets of A shares and Hong Kong stock plummeted, Hang Seng Index hit a new low in 13 years. As of the close, the A-share Biomedical (399441) index fell 3.5%, and the Hong Kong stock biotechnology ETF (159615) fell by more than 5%.
in the biotech sector, as of the close, BeiGene A shares (688235) and Hong Kong stocks (6160) fell 3.7% and 6.5% respectively; Fosun Pharmaceutical A shares (600196) and Hong Kong stocks (2196) fell 4.8% and 6% respectively; Junshi Biologics A shares (688180) and Hong Kong stocks (1877) fell 3% and 9.7% respectively; WuXi AppTec A shares (603259) and Hong Kong stocks (2359) fell 3.5% and 5.2% respectively. Innobiology (1801), Hutchison Pharmaceutical (0013), and Zai Lab Pharmaceutical (9688) all fell by more than 10%.
Before the trading session of US stock , the stock price of Chinese stock also fell sharply. Among the Chinese stock ETF companies, the stock prices of more than 40 companies fell by more than 13%.
However, on the news side, some companies still released favorable benefits. Junshi Biologics said that the company was very happy to see its good safety and effectiveness in the oral nucleoside anti-SARS-CoV-2 drug VV116 in the phase 3 clinical study of head-to-head Nematvir tablets/ritonavir tablets (i.e. PAXLOVID). The academic medical evidence obtained all reflects the advantages and highlights of VV116 in similar products. At present, VV116's multiple international multi-center registration clinical studies are underway. The company will actively promote the research and development progress of VV116 and explore its commercialization possibilities in the global market.
WuXi Biologics also announced that the company's Biologics Factory 8 (DP8) located in Hangzhou has completed the first batch of GMP production. The factory also has mRNA-LNP encapsulation technology, with an hourly production capacity of up to 10 liters, which can provide global customers with end-to-end solutions from DNA to stock solution production and preparation filling, and continuously accelerate the research and development and production process of products such as enhancing enzymes, antibody fragments, recombinant proteins, virus-like particles (VLP), plasmid DNA and mRNA.
"The sharp drop today was not particularly surprising. The decline of biotech companies has been going on for some time before. This is because the bubble of biotech companies dominated by hot money has receded and the valuation has returned to normal and reasonable levels. So it is time to fall, and market sentiment has exacerbated this decline." A biotech investor analyzed to the First Financial reporter.
The above-mentioned investors also analyzed that on the other hand, the financial reports of global technology companies have been released one after another, which has also released signs of slowing economic growth, which has had an impact on the overall investment sentiment of the market. Deng Zhijian, director of investment strategy at DBS Bank, told the First Financial reporter: "In the medium and long term, we are still optimistic about biotech companies in the medical industry. Normally, we will choose some biotech companies with relatively high R&D spending to invest. Although it will affect profits in the short term, it will help companies obtain higher valuations in the future; if companies lack R&D capabilities, they will be more likely to be eliminated by the market in the long term."
KPMG recently released a "50 Report on Biotech Innovation" that China's biotechnology field still faces opportunities in the overall development environment. The report pointed out that the 14th Five-Year Plan takes innovation as the top priority in 's new development concept, and further strengthens the top-level planning of China's scientific research field. China's biotechnology innovation enterprises will follow the trend and help achieve the strategic goals of four aspects of science and technology frontiers, innovation systems, innovative industries and people's health in the new plan.
"At present, under the correct guidance of policies and regulations, the government, capital and enterprise innovation entities and other roles are gradually building an innovation ecosystem in the field of biotechnology and achieving remarkable results." The report reads.
In terms of helping biotech enterprises continue to innovate and develop in the capital market, Li Zhixian, the head audit service partner of KPMG China National Medical and Life Sciences industry, told the First Financial reporter: "The relevant policies and capital concentration of some cities in the East China region have brought unprecedented opportunities to the development of biotech enterprises.In addition, the launch of Science and Technology Innovation Board and Hong Kong Stock Exchange 18A (the "Main Board Listing Rules" added Chapter 18A "Biotech Company") has laid a solid policy foundation, and a series of policy reforms and innovations in the capital market have also provided a more convenient channel for IPOs of biotechnology innovative companies. "
Li Zhixian believes that the achievements made by these science and technology enterprises in the field of biology, especially the transformation of results in the field of innovation and research and development, are closely related to the capital market providing solid financial support. The role of the capital market as a catalyst for innovation can be seen, and it also reflects the role of my country's capital market reform and innovation in promoting the high-quality development of the economy.
According to the latest data released by Zhihuiya, as of June 30 this year, The vast majority of the 646 listed specialized and new "little giant" companies are A-share listed companies, with a total of 638, of which GEM is the most listed and 7 listed on the Hong Kong Stock Exchange.
Smart Ya further analyzed that the specialized and new "little giant" companies listed on the A-share market have played a strong supporting role in the three major sectors of A-share market, especially the Science and Technology Innovation Board, GEM, and Beijing Stock Exchange .
