Key investment points
The rapid approval of Pfizer paxlovid shows the regulators’ support and open attitude towards small molecule specific drugs and their determination to end the epidemic and restore the economy as soon as possible: small molecule specific drugs + vaccines are recognized as the best means to combat the epidemic. As the vaccine is vaccinated by the whole population, careful consideration of possible restrictions on long-term safety and production capacity, and the rapid listing of domestic inactivated vaccine, the overseas mRNA vaccine has not been approved quickly. Paxlovid has been listed in many places around the world, its effectiveness and safety have been proved, and has become a New Hope Liuhe Co.Ltd(000876) to help reduce medical pressure, open the country to coexist with covid-19, and even eliminate the epidemic. Considering that domestic drugs still take some time from clinical completion to listing and still have potential uncertainty, the rapid approval of Pfizer products shows the open attitude of Chinese regulators towards small molecule covid-19 drugs and their determination to open the door to the country and restore the economy as soon as possible.
In the short term, this event will intensify the competition of covid-19 small molecule drugs in China. The market should pay more attention to the clinical data of domestic drugs and no longer only pursue the drugs that can be quickly listed: Pfizer paxlovid enters the Chinese market to participate in the competition with domestic covid-19 drugs. Its overseas price is 529 US dollars / course of treatment. We expect that the price may decline after listing in China, Referring to the price reduction range of other innovative drugs entering the Chinese market, we expect that the price may be reduced by 50%, and the applicable population is strictly limited to high-risk non hospitalized patients who may develop into severe diseases. At present, Omicron has gradually replaced Delta as the mainstream strain of covid-19 in the world. In the epidemiological study of unvaccinated American children under the age of 5, it is found that the hospitalization rate has decreased by 66.9%, and covid-19 will evolve into pandemic influenza and the trend of coexistence with humans is becoming more and more obvious. Due to the long-term epidemic prevention and control education, Chinese patients pay high attention to covid-19 disease. Once they are infected with the disease and are at high risk, they will urgently seek better drug treatment. If there is a large gap between the efficacy of domestic specific drugs and paxlovid, those with better efficacy will occupy the main market position even if the price is slightly higher.
If domestic covid-19 has better or similar efficacy than paxlovid, this incident only advances the time point of the emergence of specific drugs in China, which is expected to accelerate China’s opening-up and relaxation of epidemic control, It is conducive to the faster opening of China’s covid-19 small molecule drug market (the overseas market will not be affected): when the listing and wide use of small molecule specific drugs, including Pfizer covid-19 drugs, are proved to be able to reduce the pressure on medical resources and effectively avoid medical run in the real world, it is possible to usher in the opportunity to gradually open the country. At that time, the demand for covid-19 specific drugs in the Chinese market will gradually increase. At this time, domestic small molecule drugs with good clinical efficacy, rapid listing and reasonable pricing will gradually occupy the market. With the approval of various small molecule drugs in China, the accessibility of covid-19 small molecule drugs has been solved, and China has realized the independent control of covid-19 specific drugs. (the overseas market of domestic small molecule drugs is not affected by this incident, and will occupy an important position in the market of undeveloped countries that have not been listed in Pfizer / MSD patent exemption by virtue of price advantage after listing.)
This incident has little impact on the COVID-19 testing industry: Pfizer’s PAXLOVID is used to treat adults with mild to moderate COVID-19 who are progressing to severe high risk factors (such as advanced age, chronic kidney disease, diabetes, etc.), and patients are not recommended for self medication. In the long run, when the testing cost is far lower than the drug price, the mode of testing and diagnosis before medication will still be maintained, and the testing demand will not decrease even after covid-19 drug is approved. In the short term, China will still not rashly liberalize the epidemic control, which has little impact on the testing industry.
Risk warning: the clinical data is less than the expected risk, the approval speed is less than the expected risk, and the control degree of drugs on covid-19 epidemic is less than the expected risk.
