Due to the cyclical impact of the industry, the price of API generally fell in 2021, the profit of API business accounting for half of Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) (600521. SH) fell sharply, and the performance of Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) also hit the bottom.
On January 28, Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) (600521. SH) announced the performance forecast for 2021. The net profit attributable to the parent company in 2021 is expected to be between 440 million yuan and 520 million yuan, a decrease of about 44% – 53% compared with the same period of last year.
Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) relevant people told the financial Associated Press, “the general decline in the price of API, the continuous impact of FDA ban on the preparation business in the United States, and the increasing investment in the research and development of biological drugs and innovative drugs have led to the decline of the company’s profits.”
At the investor exchange meeting held at the end of November last year, Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) management once said, “the decline in the company’s API sales in 2021 is mainly affected by the decline in prices.” The financial Associated Press reporter noted that in 2021, the prices of characteristic APIs such as sartan, pril and statins generally fell and hovered at a low level compared with 2020. According to the data of the third quarter report of 2021, the net profit attributable to the parent company of Huahai decreased by 29.85% in the first three quarters, and the net profits of Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) (300702. SZ) and Ningbo Menovo Pharmaceutical Co.Ltd(603538) (603538. SH) in the same industry also decreased by 64.35% and 4.04% respectively.
The sharp rise in R & D expenses is another main reason for the decline of Huahai’s performance. In the first half of 2021, Huahai’s R & D investment accounted for 14% of its operating revenue. With more and more projects on the R & D pipeline of biological drugs and small molecule innovative drugs entering the clinical and late clinical stage, the amount of capital investment consumed also increased significantly. The financial Associated Press reporter learned that at present, 10 projects of huaaotai, a subsidiary of Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) , have entered the clinical stage.
In 2021, the impact of “valsartan incident” on the performance of Huahai reached the peak, resulting in the continuous increase of the company’s profit and loss. However, in mid November 2021, FDA announced the lifting of the import ban on Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) South Sichuan API production base. This means that the 29 APIs involved in the South Sichuan base and the preparation products made from the APIs produced by the South Sichuan base can be exported to the U.S. market, and the products involved are mainly sartan.
Since the FDA lifted the import ban on the South Sichuan base, Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) has been significantly accelerated in the approval of Anda document numbers in the United States. Only four anda document numbers were approved in January 2022. Up to now, Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) has obtained 72 American anda document numbers. People in the pharmaceutical industry believe that with the gradual recovery of business in the US market, Huahai is expected to usher in a performance inflection point in 2022.
