Key investment points
Pain point of API research: looking for "pricing anchor"
Written in the front: the notice on the implementation plan for promoting the high-quality development of API industry has repeatedly emphasized the green and low-carbon direction, supporting equipment and consumables and the development of industrial clusters. We believe that the technology of API companies determines the product share and equipment affects the productivity efficiency, and the capacity jump is the basis for small companies to grow from weak to strong and continue to exceed expectations, Excellent API companies should exercise ① their ability of process development and optimization under cost / quality competition; ② Systematic and forward-looking project establishment system; ③ Large scale, efficient and compliant production capacity. In this context, we hope to find the "pricing anchor" of API companies in the medium-term dimension through a series of topics. This paper takes the application of partial platform technology such as continuous flow and enzyme catalysis as an example to see the layout and potential impact of Chinese api companies.
Potential platform production technology: continuous flow and enzyme catalysis
① Continuous flow: process R & D and equipment investment, the former is more important. We believe that the continuous flow process is a potential "optimal" process for cost reduction and efficiency increase with a wide range of application scenarios (the literature estimates that about 20-30% of the reactions in organic synthesis and catalytic reactions can be optimized by continuous flow). The application focuses on optimizing residence time in high temperature and high pressure environment to optimize reaction efficiency. It is suitable for integrating biocatalysis, supported catalyst, microwave technology, photochemistry, electrochemistry and other technologies. The development of solvents and processes that meet the requirements of cGMP is more important.
② Enzyme catalysis: molecular transformation and structural design, each with emphasis. Industrial production often develops enzyme catalytic process by means of enzyme molecular transformation, chemical modification or immobilized enzyme through protein engineering. The application of enzyme catalysis and continuous flow, photosynthesis, fermentation and semi synthesis of natural products has platform advantages, which can greatly improve the yield and shorten the reaction time.
API company application: technology platform affects business development
During the expansion period of capital expenditure, equipment investment and R & D investment are very important, and the difference of technology platform affects the company's multi business development. ① Capital expenditure intensity and quality: Brightgene Bio-Medical Technology Co.Ltd(688166) , Aurisco Pharmaceutical Co.Ltd(605116) , Jiangxi Fushine Pharmaceutical Co.Ltd(300497) and other companies have high capital expenditure intensity. From the perspective of R & D expenses corresponding to single fixed assets (Note: we use this index to reflect the R & D investment of production process and equipment from the side, for reference only), Brightgene Bio-Medical Technology Co.Ltd(688166) , Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) , Apeloa Pharmaceutical Co.Ltd(000739) and other companies have large investment in single fixed assets. ② R & D intensity: from the perspective of R & D expenditure of single R & D personnel, Apeloa Pharmaceutical Co.Ltd(000739) , Brightgene Bio-Medical Technology Co.Ltd(688166) , Hubei Goto Biopharm Co.Ltd(300966) and other companies have relatively high expenditure. ③ Technology platform layout: We analyzed the company's announcement, official website information, patents and main products. Chiral synthesis is the technology laid out by most API companies. In the field of continuous flow, enzyme catalysis, targeted coupling and other technology platforms, each company makes a differentiated layout in combination with its own advantages. On the whole, the technical capabilities of API companies that are better at large tonnage products are mostly concentrated in the fields of green synthesis and cost optimization. The company's technical platform focusing on cdmo business is more balanced and perfect, and the steroidal track company has more experience in the fields of fermentation and enzyme catalysis.
Investment suggestion: pay attention to the reconstruction of competitiveness by new technology
We believe that the new synthetic technology platform and production process have a significant impact on the cost and yield of API companies. During the window period when the patents of heavy generic drugs expire one after another, we believe that API companies with advanced production equipment and first upgraded supply capacity have more advantages than Indian competitors. We have always stressed that the essence of API production is technology-oriented. The global competitiveness of each product needs to be analyzed separately in combination with the process characteristics and competition pattern of each product. The competitiveness of API products directly determines the balanced profitability and sustainable growth of each company. The essence of business model is growth attribute rather than cycle attribute.
Therefore, we are more optimistic about companies with relatively high short-term R & D investment and leading potential platform production technology layout such as continuous flow / enzyme catalysis. We recommend Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Apeloa Pharmaceutical Co.Ltd(000739) , Brightgene Bio-Medical Technology Co.Ltd(688166) and suggest paying attention to the case accumulation and expansion of Cathay Biotech Inc(688065) , Aurisco Pharmaceutical Co.Ltd(605116) , Zhejiang Ausun Pharmaceutical Co.Ltd(603229) and other companies in the field of new technology. In addition, we are optimistic about the accumulation and advantages of Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) and other companies in the field of difficult preparations and large tonnage product process development, as well as the proven cost optimization, quality control and green production capacity of Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) in large tonnage API.
Risk statement
Production safety accidents and quality risks, the risk that the standard flow or sales of core preparations are less than expected, the risk of exchange rate fluctuation, the risk of order delivery fluctuation, and the risk of changes in pharmaceutical regulatory policies.
