Current market review
In the current period (2.19 – 2.26), the Shanghai Composite Index closed at 345141, down 1.13%; The CSI 300 index closed at 457342, down 1.67%; SME 100 closed at 922216, up 0.25%; In the current period, Shenwan pharmaceutical and biological industry index closed at 1004476, up 1.71%, ranking sixth among Shenwan’s 31 primary industry indexes. Among the seven secondary sectors, traditional Chinese medicine, chemical agents, biological products, medical services, APIs and medical devices outperformed the Shanghai Composite Index, CSI 300 and small and medium-sized 100.
Important information
Henan Province issued the notice on the procurement and use of non Medicare varieties in the centralized procurement of flow standard varieties (the first batch) and the provincial procurement of the first batch of similar replaceable drugs in Henan Province
On February 21, Henan Province issued the notice on the purchase and use of non Medicare varieties in the centralized purchase of flow standard varieties (the first batch) in our province and the first batch of substitutable drugs of the same kind in our province. There are 6 varieties of current standard varieties (the first batch) intensively purchased in Henan Province, from November 1 to February 15, 2021. The total purchase amount of current standard varieties (the first batch) intensively purchased in Henan Province is 206 million yuan.
The food and drug administration has made it clear that it will speed up the review of innovative drug listing applications
On February 22, the drug evaluation center of the State Food and Drug Administration issued the draft for comments on accelerating the review of innovative drug listing application (Trial), which is intended to speed up the review of innovative drugs. According to the above exposure draft, the varieties that can participate in the “accelerated review” must be innovative drugs included in the breakthrough treatment drug program. For enterprises after the completion of exploratory clinical trials, it is expected to complete the listing approval process within 160 days.
Ministry of science and technology: the number of approved class I new drugs in China has increased from 5 to 75, and a batch of domestic high-end medical devices have been put into use
On February 25, Wang Zhigang, Minister of science and technology, introduced the progress of scientific and technological innovation. Through the implementation of major new drug creation projects, China has approved 75 class I new drugs from 5 before 2008, and a number of domestic high-end medical devices have been put into use.
Core view
In the current period, Shenwan pharmaceutical and biological industry index closed at 1004476, up 1.71%, ranking sixth among Shenwan’s 31 primary industry indexes. Among the seven secondary sectors, traditional Chinese medicine, chemical agents, biological products, medical services, APIs and medical devices outperformed the Shanghai Composite Index, CSI 300 and small and medium-sized 100.
In terms of the epidemic situation, the global epidemic continued to fall after the peak. In late January 2022, the daily newly confirmed cases of the global epidemic began to decline gradually after reaching the peak. This week, the downward trend continued. At present, there are about 1.5 million new cases per day. In terms of covid-19 vaccination, covid-19 vaccination has made steady progress. According to the data of China’s National Health Commission, as of February 11, China had received a total of 3.108 billion doses of covid-19 virus vaccine. With the decrease of vaccine effectiveness with virus variation, it is necessary to continuously update vaccines and strengthen vaccination against virus variation for a long time. Therefore, it is necessary to continue to pay attention to the investment opportunities of covid-19 prevention and control industry chain, and pay attention to the listed companies deeply involved in covid-19 prevention and control drug supply chain.
In terms of news, on February 22, the drug review center of the State Food and Drug Administration issued the draft for comments on accelerating the review of innovative drug listing application (Trial), which is intended to speed up the review of innovative drugs on the basis of summarizing the experience of transforming anti epidemic emergency review. This new deal speeds up the approval process of innovative drugs, is expected to shorten the listing cycle of innovative drugs, and has a great positive effect on pharmaceutical enterprises truly committed to innovation. Since CDE released the guiding principles for clinical research and development of clinical value oriented antitumor drugs (Exposure Draft) in 2021, we can see the consistency of policy support for truly effective pharmaceutical innovation rather than “internal” competition. In the aspect of covid-19 prevention and control industry chain, we have repeatedly pointed out the investment opportunities of covid-19 oral drug industry chain in the special report on covid-19 epidemic situation in November last year and the weekly report in early February this year. According to the announcement and annual report previously released by Pfizer, the price of a single course of paxlovid is $529. It is estimated that the revenue of covid-19 oral medicine will reach $22 billion in 2022. Covid-19 oral medicine, as the last puzzle in the covid-19 treatment industry chain, has a broad market prospect. In addition to the innovation expectations given by enterprises directly involved in covid-19 oral drug research and development, China’s CXO industrial chain has a complete integrated chain with obvious cost and efficiency advantages. The order announcements issued by some enterprises also confirm our previous view. In the short term, it is suggested to continue to pay attention to the investment opportunities in the R & D of covid-19 small molecule drugs, and pay attention to the listed companies deeply involved in the supply chain of covid-19 preventive drugs, including Shanghai Junshi Biosciences Co.Ltd(688180) -u, Porton Pharma Solutions Ltd(300363) and Asymchem Laboratories (Tianjin) Co.Ltd(002821) etc.
The Russian Ukrainian war caused a huge earthquake in the capital market, but it will not have a substantive impact on a shares, and the logic of short-term repair is still valid. We believe that the focus of market repair may continue to focus on sectors with marginal improvement and valuation repair logic. At the time point when valuation switching is gradually approaching, the advance layout needs to pay particular attention to the sustainability of marginal improvement and growth. From the perspective of valuation, the pharmaceutical industry is currently at a historical low valuation. The market has been worried that the suppression of the price segment by centralized purchase and medical insurance negotiation will change the growth attribute of the pharmaceutical industry. We believe that the logic of long-term and stable growth of the pharmaceutical industry remains unchanged when the demand is determined. In the long run, with the continuous promotion of the procurement of drugs and consumables, enterprises with high safety margin, strong innovation ability, rich product pipelines and good competition pattern are expected to continue to benefit in the long cycle. It is suggested to continue to focus on innovative drugs and innovative drug industry chain, high-end medical devices, medical consumption terminals and medical consumption layout with scarcity and consumption attributes, At the same time, tap the second-line blue chips with relatively low valuation:
1) innovative drugs and the industrial chain of innovative drugs and innovative drugs, including comprehensive and specialist innovative drug enterprises, CXO industry, and the industrial chain of innovative drugs and innovative drugs, including comprehensive and specialist innovative drug enterprises, and CXO industry. It is suggested to focus on Jiangsu Hengrui Medicine Co.Ltd(600276) \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ etc;
2) it is recommended to pay attention to Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) and Lepu Medical Technology (Beijing) Co.Ltd(300003) as the leader of high-end medical devices with outstanding import substitution ability;
3) for medical consumption terminals benefiting from increased market concentration, it is recommended to pay attention to Yixintang Pharmaceutical Group Co.Ltd(002727) , Yifeng Pharmacy Chain Co.Ltd(603939) and Dian Diagnostics Group Co.Ltd(300244) etc;
4) biological products enterprises with scarcity and consumption attributes, including Chongqing Zhifei Biological Products Co.Ltd(300122) , Changchun High And New Technology Industries (Group) Inc(000661) , Hualan Biological Engineering Inc(002007) , Cansino Biologics Inc(688185) -u and Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) .
Risk tips: covid-19 epidemic fluctuation risk and market adjustment risk
