On January 30, the Ministry of industry and information technology and other nine departments jointly issued the "14th five year plan" for the development of pharmaceutical industry (hereinafter referred to as the "plan"), which puts forward the development goals for the next five years and the long-term goals for the next 15 years. By 2025, the main economic indicators will achieve medium and high-speed growth, outstanding innovation achievements in frontier fields, enhanced innovation driving force, significantly improved the modernization level of industrial chain, further improved the supply guarantee system of pharmaceutical machinery, and comprehensively moved towards high-end internationalization.
The plan proposes that the R & D investment of the whole industry will increase by more than 10% annually during the 14th Five Year Plan period; By 2025, the proportion of new sales of innovative products in the increment of operating revenue of the whole industry will further increase. Affected by this news, pharmaceutical stocks rose rapidly on January 31, with Haiwang yingtelong, Sansheng pharmaceutical and Xinda biology up more than 5%, and China rose 4% at the same time. At the beginning of the year of the tiger, favorable policies detonated the market. Looking at the huge market space of the whole pharmaceutical industry, it is facing both opportunities and challenges. As a rising star, innovative drugs have naturally become the focus of attention in the whole industry. How to enter the 2.0 era, break the internal volume of the industry and promote the transformation and upgrading of enterprises is a problem worthy of discussion.
opportunities and challenges coexist
Since 2015, there has been a wave of innovative drugs in China. Under the joint action of policy, talent, market and capital, more and more innovative drugs have been approved for listing. According to the sorting of Yaodu database, by the end of November 2021, China had approved a total of 52 new drugs in Category 1 (innovative drugs that are not listed at home and abroad) and category 5.1 (original drugs that are listed overseas apply to be listed in China), with a record number. In recent years, the number of new drugs approved in China has been close to the level of developed countries. At the same time, local pharmaceutical innovation enterprises have taken the first step from rapid follow-up to differentiated innovation. By the end of November, 25 class 1 innovative drugs had been approved in 2021, exceeding the number of 20 innovative drugs approved in 2020.
The development of innovative drugs has also driven the rapid progress of the whole industry. According to the report on the world's top 1000 pharmaceutical enterprises issued by Torreya, an American investment institution, in November 2021, 280 of the top 1000 pharmaceutical enterprises in China accounted for us $840.3 billion, accounting for 12%, ranking second in the world. Compared with the valuation of 6.5% in 2015, it was about double; In 2021, US pharmaceutical companies raised about US $60 billion in IPO, and Chinese pharmaceutical companies raised about US $93 billion in IPO, surpassing the United States to become the first in the world.
Du Xiangyang, chief pharmaceutical analyst of Southwest Securities Co.Ltd(600369) once said in his speech that innovative drugs have ushered in three opportunities. One is the strong support of policies. Second, licensing cooperation is becoming more and more active, and Chinese new drugs are constantly "going out" and "bringing in". According to the data, by the end of November 2021, there were 122 licenses in Chinese pharmaceutical enterprises, an increase of 72% compared with 2020; With the continuous improvement of local innovation level and capability, the international recognition of China Meheco Group Co.Ltd(600056) innovation is getting higher and higher, and the exploration of indigenous innovation products is globalized. A total of 40 varieties have achieved "sea going" and the amount of transaction disclosed is nearly US $11 billion 800 million. Third, the rise of pharmaceutical outsourcing service (CXO) enterprises helps shorten the time of new drug research and development, control R & D costs and reduce risks.
Despite the good progress of innovative drugs, the short board has been increasingly prominent as the development process has accelerated. The report on the construction of China Meheco Group Co.Ltd(600056) innovation ecosystem (2021-2025) released by China pharmaceutical promotion association points out that China's local innovative drugs are currently in the stage of gradual follow-up. However, the phenomenon that innovative drug research and development in China is concentrated on popular targets is obvious, and there is a common phenomenon of homogeneous innovation. Take PD-1 as an example. At present, 154 PD-1 products are under research in the world, of which 85 are developed or jointly developed by Chinese enterprises, accounting for 55%. At the same time, the analysis results of clinical trial efficiency show that the implementation efficiency of Chinese clinical trials after approval is not high, the proportion of pediatric drug clinical trials is relatively low, and the regional distribution of clinical trials is uneven.
In addition, Du Xiangyang believes that the health care negotiation will shorten the life cycle of innovative drugs. At present, China has conducted five rounds of medical insurance drug negotiations on innovative drugs. The average decline of innovative drugs selected for the first time is basically more than 50%. In the national health care negotiation in 2020, the average price reduction of PD-1 products with serious homogenization was 78%. "Through the national health care negotiation, on the one hand, we can achieve rapid market access, but also mean that the life cycle of innovative drugs is shorter than in the past. The competition of homogeneous innovative drugs is more intense, and there will be the possibility of significant shortening." Du Xiangyang said.
ready to go into the era of 2.0
Facing the ups and downs of the market in 2021, many innovative drug investors really feel bitter. According to the data, as of December 31, 2021, a total of 48 companies have been listed through the Hong Kong stock 18a rule, and now 23 companies are in the state of submitting statements, and more than 70% of the companies are concentrated in the field of innovative pharmaceuticals and innovative therapies. Although the popularity did not decrease, many new shares, including Baiji Shenzhou and Beihai Kangcheng, were deeply trapped in the curse of "breaking the hair", and innovation stocks were once depressed. For a time, the market was full of doubts about innovative drugs. With the release of a series of favorable policies such as the plan, it may bring dawn to the low innovative drug industry.
According to the plan, during the 14th Five Year Plan period, a large number of pharmaceutical innovation achievements will complete clinical research and apply for listing. The pharmaceutical industry will also continue to increase innovation investment and accelerate innovation driven transformation. Experts believe that the plan adapts to the new policy environment and economic environment, and is more of a guiding document. Enterprises should clarify their guiding ideas, deploy in combination with their own overall strategy, and accelerate the upgrading of industrial structure. It is not difficult to predict that with the support of policies, the research and development of innovative drugs will continue to heat up, and the types of drugs will also be diversified.
An unnamed insider told the Huaxia times that although there were many adjustments in the innovative drug section in 2021, some leading enterprises also suffered setbacks, which also made the whole industry enter a reasonable valuation space. Moreover, under the background of expanding recruitment and increasing capital expenditure, the innovative drug section will continue to maintain a high prosperity, Upstream support industries will also maintain a very fast growth rate. Innovative drugs represent the general direction of drug innovation. In the long run, this track has long-term layout value.
Zhang Deyan, an analyst at Xiangcai securities, pointed out: "The rapid growth of China's bio medicine under the promotion of policies and capital has spawned the first wave of innovation bubble. With the contraction of liquidity, we have opened a round of pseudo innovation cycle. We believe that eliminating counterfeit does not change the upward cycle of innovation. The policy is guiding innovation to return to its original source, and continuously optimizing the innovation ecosystem. At present, the basic ecology of exploring the source and innovation has been established, and the industry is moving from following to the next. Really innovative stage. "
Du Xiangyang also said in the research report that whether enterprises can go farther and farther, these technologies are a very important core driving factor in the next 5 to 10 years. We believe that in the future, Chinese innovative drug enterprises may need to make the layout of new technology fields according to their own foundation in order to face the centralized purchase of generic drugs in China's stock business on the one hand and the national negotiation of innovative drugs on the other. In the future, through the layout of new technologies, breakthroughs in China and internationalization may be a core magic weapon for enterprises' long-term production and manufacturing.
