Key investment points
What kind of investment opportunities will it bring when the API with dilemma reversal meets covid-19 special drug? In 2021, the API sector faced multiple pressures, and the performance of the company’s performance and stock price were not satisfactory. Looking forward to 2022, the industry is expected to usher in an upward turning point, and the future trend will continue to be good. At the same time, the R & D of covid-19 drugs outside China has entered the post cycle, two overseas drugs have been approved, and two Chinese companies have entered the key clinical stage. API enterprises are generally involved in the R & D and production of covid-19 drugs. We believe that under the repeated epidemic situation and the promotion of drug R & D process, the API in reverse dilemma meets covid-19 oral drugs, which is expected to become the core main line of medicine throughout the year and has continuous investment opportunities.
Why do you say dilemma reversal? What happened to the API industry and companies in 2021? How will 2022 change? In 2021, under the objective pressure of RMB appreciation and raw material price rise, the industry is facing the demand side disturbance caused by the epidemic and the destocking of downstream customers. At the same time, the “transformation investment” of enterprises is not reduced, and some key products are subject to periodic disturbance, resulting in obvious pressure on the industry as a whole and sharp fluctuations in performance. What will be the improvement in 2022? The de stocking factor was basically completed in 2021q3, and the order returned to normal; Under the normalization of the epidemic, the demand is gradually restored, and most products are expected to see both volume and price rise. The accelerated development of new businesses and the rapid volume of new products are expected to bring new impetus to growth, and the industry ushered in a dilemma reversal.
Change and invariance of industry long logic: the “business cycle” of API is expected to come. 1) What has changed is the focus of the market: from “supply side reform” to “cdmo transformation” to “covid-19 industrial chain”. From 2018 to 2020, the market’s attention to API began with the supply side reform (stricter environmental protection, relevance review, consistency evaluation and volume procurement), the improvement of concentration and the leading advantage of integration under the background of centralized procurement. The generic pharmaceutical industry chain returned to the competitive essence of “technology + manufacturing”. Since 2021, enterprises have been paying more attention to the cdmo market. By 2022, due to covid-19 oral drug industry chain, the market’s enthusiasm for API enterprises will be further improved. 2) What remains unchanged is the comparative advantage of China Meheco Group Co.Ltd(600056) manufacturing. API enterprises may make efforts in the later cycle. China is becoming the center of global high-end pharmaceutical manufacturing by virtue of its comparative advantages in drug manufacturing cost and supply chain stability. API enterprises are expected to develop continuously and rapidly. API and generic pharmaceutical businesses are at the back end of the drug life cycle, but the life cycle is longer, the scale and volume are larger, and the business model determines a higher ceiling. We are optimistic about the force of the later cycle. In the future, we will continue to be optimistic about the five directions of “pharmaceutical manufacturing”: cdmo with large volume of new drugs on the market, CMO of original research transfer under the patent cliff, API imitation under the patent cliff, API secondary development under new processes and technologies, and the extension of the integration of API and generic drugs.
What is the chemical reaction between covid-19 oral medicine and API enterprises? API enterprises generally participate in covid-19 drug production, which reflects the competitive advantages of enterprises in process development, large-scale production, customer relationship and so on. We believe that the main line of “covid-19 oral medicine” is expected to run through the whole year, and we are optimistic about the direction of the three industrial chains. 1) Overseas original drug cdmo: Pfizer paxlovid has been approved by EUA, and Japan yanyeyi s-217622 has submitted its listing application in China. It is optimistic about the advantageous enterprises in relevant cdmo and all links of the industrial chain. 2) Generic API authorization: MSD molnupiravir and Pfizer paxlovid have authorized MPP. We believe that leading enterprises with strong ability and fast speed are expected to enjoy dividends. 3) Independent research and development of domestic specific drugs and cdmo: at present, a variety of domestic specific drugs are in the clinical stage, among which real organisms and Shanghai Junshi Biosciences Co.Ltd(688180) lead. The preliminary analysis data of the real organism azvudine are good, and phase III clinical research is being carried out in Brazil and other countries Shanghai Junshi Biosciences Co.Ltd(688180) of vv116 has obtained the EUA of Uzbekistan, and the phase I data are good. The international multicenter phase III clinical trial has completed the enrollment and administration of the first patient. The reverse of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn in the turn of the turn of the turn in the turn of the turn of the turn of the turn in the turn of the turn in the turn of the API’s boom, which opens the cycle after the API boom cycle, and suggests to focus on Apeloa Pharmaceutical Co.Ltd(000739) Apeloa Pharmaceutical Co.Ltd(000739) Apeloa Pharmaceutical Co.Ltd(000739) \ \the.
Risk warning events: covid-19 virus mutation risk, clinical progress less than expected risk, exchange rate fluctuation risk, research report information update is not timely risk.
