Core view
On February 11, the State Food and Drug Administration approved the import registration of Pfizer covid-19 oral drug nimatovir tablets / ritonavir tablets combination packaging (paxlovid) with conditions through emergency review and approval.
Comments:
Paxlovid is effective and has recently been approved in many countries. Clinical studies showed that among patients treated with paxlovid within 3 and 5 days after symptom onset, the hospitalization or mortality of covid-19 patients decreased by 89% and 88% respectively, and the viral load decreased 10 times compared with the placebo group. At the same time, in vitro data showed that paxlovid was effective against the Omicron variant strain. Paxlovid has been approved by about 40 countries including Britain, Germany, Japan, Singapore and China within more than 50 days since it was urgently approved in the United States on December 22 last year. The approval in China also marks that China has the first oral specific drug covid-19 in a strict sense.
Paxlovid faces capacity pressure in the short term, and the industrial chain of large-scale process is expected to generate huge benefits. Pfizer estimates that the output of paxlovid in 2022 Q1 will be 6 million courses and that in 2022h1 will be 30 million courses, with an annual output of 120 million courses (performance guidance of US $22 billion). Considering the strong infectivity of covid-19, with the increase of approved countries and the promotion of MPP agreement, the production capacity pressure will further increase. According to the calculation of 15% - 20% of the drug production cost, the market scale of the relevant industrial chain this year is US $3.3-4.4 billion. China's supply chain system of small molecule drug intermediates, APIs and preparations is stable and mature, and relevant enterprises are expected to generate huge profits. Recently, cdmo enterprises boten (US $681 million) and Asymchem Laboratories (Tianjin) Co.Ltd(002821) (US $481 million + RMB 2.72 billion) have disclosed that they have obtained large orders. From the details of amount and time, we speculate that they are Pfizer paxlovid orders. With the gradual expansion of production capacity and product delivery, enterprises in the whole industrial chain are expected to benefit.
The breakthrough of domestic covid-19 oral medicine is imminent, and multiple routes are promoted simultaneously. Considering Pfizer's limited production capacity, high pricing (US $530 per treatment course) and the security and stability of the supply chain, we believe that domestic covid-19 oral medicine will still have a huge market. The real biological azvudine (HIV reverse transcription inhibitor) is expected to publish the phase III clinical data of China in the near future; Vv116 (nucleosides) of Shanghai Junshi Biosciences Co.Ltd(688180) is currently undergoing international multicenter phase II / III clinical research and is expected to be incorporated in the middle of the year. Another product vv993 (3CL protease inhibitor) is in the preclinical stage and has the potential to be combined with vv116 in the future; In addition, 3CL protease inhibitors of Xiansheng pharmaceutical, Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317) , Fujian Cosunter Pharmaceutical Co.Ltd(300436) are in preclinical stage.
Investment suggestion: paxlovid industrial chain suggests paying attention to Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363) , Wuxi Apptec Co.Ltd(603259) , and domestic covid-19 small molecule suggests paying attention to Shanghai Junshi Biosciences Co.Ltd(688180) and Xiansheng pharmaceutical.
Risk warning: domestic covid-19 oral drug research and development failed; Paxlovid China's price cut exceeded expectations; Covid-19 virus mutation.
