1. Thinking this week: how to view the impact of policies and international relations on CXO? In recent years, changes in Sino US relations have become more sensitive to CXO with overseas income as the main body, and the gradual integration of CDE policy with ICH, with frequent normative documents. How to view the impact of policies and international relations on CXO has become the most concerned issue about the future prosperity of CXO.
Look at the essence:
1. CDE policy is that after joining ICH, the R & D process supervision is in line with international standards, and the standardized system of declaration (CDE, registration verification, clinical self-examination) - payment (Medical Insurance Bureau, centralized purchase medical insurance negotiation) - drug use specification (DRG / Dip) is gradually formed. Its essence is to promote innovation and upgrading and strengthen the international recognition of clinical supervision.
2. The sensitive points of international relations are national security, human rights and data security, which does not affect the development boom of CXO based on the logic of "engineer dividend" and "low-cost manufacturing", and is optimistic about the key role of "water seller" under the uncertainty of China US relations.
Look at the changes:
1. Under the innovation and upgrading, CXO company's industry university research technology capability is upgraded in a closed loop, and its position in the global industrial chain is rising in combination with engineer bonus and cost advantage.
2. Under the innovation and upgrading, the market pattern brought by the horizontal and vertical integrated expansion of CXO is gradually concentrated.
3. Head CXO's international capacity layout is accelerated to accelerate its entry into the global API and preparation supply chain system, strengthen the CGT service platform, and strengthen the local forlocal service capacity to deal with uncertain international relations risks.
Investment suggestions:
It emphasizes that the improvement of supply side capacity will increase the volume and price of front-end cro and enhance the global participation of back-end cdmo. We recommend focusing on: Hangzhou Tigermed Consulting Co.Ltd(300347) , Wuxi Apptec Co.Ltd(603259) , Joinn Laboratories (China) Co.Ltd(603127) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Pharmaron Beijing Co.Ltd(300759) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Porton Pharma Solutions Ltd(300363) , Fangda holdings, Pharmablock Sciences (Nanjing) Inc(300725) , Shanghai Medicilon Inc(688202) .
2. China's fortnightly resumption
China: CXO fell across the board due to rumors of entity list. 2021.12. 13-2021.12. 24. The pharmaceutical sector fell 1.95%, outperforming the CSI 300 index by 0.70pct; The pharmaceutical outsourcing sector fell 10.90%, underperforming the pharmaceutical sector by 8.95pct. Since the beginning of 2021, the pharmaceutical sector has fallen by 7.27%, underperforming the CSI 300 index by 1.70pct, and the pharmaceutical outsourcing sector has risen by 23.23%, outperforming the CSI 300 index by 28.79pct. From the perspective of individual stocks, pharmaceuticals generally fell in the past two weeks due to the rumor of the list of us entities. Among them, Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) is the only two-week cumulative rising target (+ 13.13%), which we believe is mainly affected by the approval of methadone covid-19 in the United States.
Overseas: the epidemic situation is repeated and fluctuating. 2021.12. 13-2021.12. 26. Overseas leading outsourcing companies rose 3.71% in total, underperforming the MSCI health index by 0.30pct. In terms of individual stocks, icon and medface led the sector in the past two weeks, with a cumulative increase of 10.61% and 4.55%. We speculate that it is mainly caused by the intensification of concerns about Omicron variants in the US stock market. The share prices of Samsung biology and Codexis fluctuated significantly with the approval of covid-19 drugs. We believe that in the short term, the development of covid-19 epidemic and the approval of drugs are still the main factors affecting the CXO sector.
Industry dynamic tracking: Overseas continuous acquisition technology platform
3. Industry boom tracking
The prosperity of domestic innovative drug ind application continues, and the number of domestic biological drug ind applications significantly exceeds that of imports. As of December 24, 2021, there are 841 ind of class 1 chemical drugs and 254 ind of biological drugs in China; 44 class 5.1 chemical drugs, 254 class 1 chemical drugs and 203 biological drugs were imported. In terms of the number of applications in the first 26 days of December 2021, domestic drugs have exceeded 127% in the whole month of December 2020, and domestic biological drugs have exceeded 14%.
The participation of local and international innovative drug markets has been increasing. As of December 2021 24. The MRCT test undertaken by China increased by 84% compared with the whole year of 2020, including 166% initiated by local pharmaceutical enterprises. We found that the rapid growth in the number of global multi center clinics undertaken by China in recent years may be related to the gradual attention of overseas pharmaceutical enterprises to China's strong clinical demand and large market prospects in the future. In addition, with the growing capability of local innovative pharmaceutical enterprises, the internationalization of local enterprises has accelerated. We believe that more and more innovative pharmaceutical enterprises will take part in international competition and occupy a larger market share after China's clinical needs are not met and the local innovation and research capabilities are continuously verified. At the same time, it is expected to drive the internationalization breakthrough of local CXO.
5. Investment advice
It is emphasized that the improvement of supply side capacity will lead to the simultaneous increase of volume and price of front-end cro and the enhancement of back-end cdmo's global participation. We recommend focusing on: Hangzhou Tigermed Consulting Co.Ltd(300347) , Wuxi Apptec Co.Ltd(603259) , Joinn Laboratories (China) Co.Ltd(603127) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Pharmaron Beijing Co.Ltd(300759) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Porton Pharma Solutions Ltd(300363) , Fangda holdings, Pharmablock Sciences (Nanjing) Inc(300725) , Shanghai Medicilon Inc(688202) .
