01cxo high prosperity remains unchanged, and the new CGT track brings new opportunities
M & A and capacity expansion were the main theme of the CXO sector in February, and the bimonthly excellent high-frequency data also guided the sector’s prosperity to continue to rise. In February, whether from the stock price performance of the capital market or the fundamentals of the company’s business, CXO is still an excellent sector with both certainty and growth in the pharmaceutical sub field. In terms of stock price performance, CXO sector recovered slightly. From February 1 to March 16, cro index rose 2.4%. From the perspective of business fundamentals, we believe that China’s CXO is deeply integrating resources. The first tier enterprises accelerate the expansion of business territory and capability circle through acquisition, M & A and capacity expansion. Including Porton Pharma Solutions Ltd(300363) successively announced the expansion of new workshops. It is estimated that by the end of 2023, the production capacity will increase by about 53% year-on-year in 2021. At the same time, the acquisition of Kaihui pharmaceutical, the subject of China’s cro, is also a guarantee for further expanding the cro business Asymchem Laboratories (Tianjin) Co.Ltd(002821) invested 3 billion yuan to build biological drug cdmo production capacity in Fengxian, Shanghai, which is also to expand the business territory to the field of macromolecular biological drugs. The acquisition of American company snapdragon also strongly promotes the further development of business in the United States.
The first share of cdmo for cell gene therapy is listed, and the new track brings new opportunities. China’s first stock of cell gene therapy and metabiology is expected to land in the capital market in late March. After small molecular chemical drugs and macromolecular biological drugs, cell gene therapy is expected to set off a third revolutionary wave, which will bring high demand for outsourcing services in related fields. Whether from the investment and financing prospect of the primary market or the smooth progress of the pipeline under research, it can be clearly recognized that the outbreak period of cell gene therapy is coming. FDA predicts that 2025 will usher in the commercial outbreak period of cell gene therapy, and 10-20 products are expected to be approved and listed every year.
Investment suggestions: 1) covid-19 cdmo theme opportunities: including Wuxi Apptec Co.Ltd(603259) , Asymchem Laboratories (Tianjin) Co.Ltd(002821) and Porton Pharma Solutions Ltd(300363) ; 2) Characteristic CXO sustainable growth opportunities: including Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Apeloa Pharmaceutical Co.Ltd(000739) , Baicheng medicine and Beijing Sun-Novo Pharmaceutical Research Co.Ltd(688621) ; 3) New opportunities for third-generation cell gene therapy: including Kingsley biotechnology, and metabiology.
Risk warning: risk of performance falling short of expectations, overseas policy risk, new business investment falling short of expectations, China Meheco Group Co.Ltd(600056) policy risk
