Key investment points: Market Review of the current period (3.12 – 3.19) Shanghai Composite Index closed at 325107, down 1.77%; The CSI 300 index closed at 426590, down 0.94%; The small and medium-sized 100 index closed at 834291, down 1.67%, and the small and medium-sized 100 index closed at 834291, down 1.67%; In the current period, Shenwan pharmaceutical and biological industry index closed at 996036, up 1.08%, ranking third among Shenwan’s 31 primary industry indexes. Among the seven secondary sectors, biological products, traditional Chinese medicine, pharmaceutical commerce, chemical agents, APIs and medical devices outperformed the Shanghai Composite Index, Shanghai and Shenzhen 300 and small and medium-sized 100.
Important information
Covid-19 new diagnosis and treatment plan for pneumonia effectively responded to Omicron: mild diseases were isolated, and two new drugs were included in antiviral treatment
In March 15th, the national health and Health Commission released the New Coronavirus pneumonia diagnosis and treatment plan (trial version ninth). Throughout the new diagnosis and treatment plan, light cases have been changed from the original isolation treatment in designated hospitals to centralized isolation management; Several covid-19 virus therapeutic drugs and covid-19 virus antigen detection reagents and personal self-test products approved by the State Food and drug administration have come into play; The nucleic acid CT value was included in the de isolation management and discharge standards as the measurement basis; The duration of isolation management and health monitoring after discharge was also shortened from 14 days to 7 days.
Pfizer covid-19 oral drug was approved to copy five Chinese enterprises for free on the MMP list
On March 17, the Geneva pharmaceutical patent pool announced that it had signed agreements with 35 pharmaceutical companies to allow them to produce nimatovir API or preparation, one of the components of Pfizer’s new oral drug paxlovid. Including 5 Chinese enterprises, namely Shanghai desaino, Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) , Apeloa Pharmaceutical Co.Ltd(000739) , Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) .
National Health Commission: the Omicron variant did not completely escape the existing vaccine. On March 19, the joint prevention and control mechanism of the State Council held a press conference. Although the risk of breakthrough infection of the Omicron variant is increased for vaccinators, current research shows that the Omicron variant has not completely escaped the existing vaccine.
Core view
In the current period, Shenwan pharmaceutical and biological industry index closed at 996036, up 1.08%, ranking third among Shenwan’s 31 primary industry indexes. Among the seven secondary sectors, biological products, traditional Chinese medicine, pharmaceutical commerce, chemical agents, APIs and medical devices outperformed the Shanghai Composite Index, Shanghai and Shenzhen 300 and small and medium-sized 100.
In terms of the epidemic situation, in the past week, the newly confirmed cases of covid-19 pneumonia in the world rebounded again, of which more than 40% were concentrated in countries and regions around China, and the pressure of external defense input continued to increase. In terms of the epidemic situation in China, the local epidemic situation is developing rapidly. Many provinces are facing the situation of epidemic prevention and control dominated by Omicron virus strain in many places at the same time. The prevention and control situation is severe and complex. From March 1 to 18, more than 29000 cases of covid-19 pneumonia were reported nationwide, affecting 28 provinces. Among them, Jilin Province has reported more than 10000 cases, another 4 provinces have reported more than 1000 cases, and 10 provinces have reported between 1001000 cases. In terms of covid-19 vaccination, covid-19 vaccination has made steady progress. According to the data of China’s National Health Commission, China had received a total of 3.219 billion doses of covid-19 virus vaccine as of March 18.
On the news side, in March 15th, the national health and Health Commission released the New Coronavirus pneumonia diagnosis and treatment plan (trial version ninth). In the new diagnosis and treatment plan, light cases are changed from the original isolation treatment in designated hospitals to centralized isolation management; Several covid-19 virus therapeutic drugs and covid-19 virus antigen detection reagents and personal self-test products approved by the State Food and drug administration have come into play; The nucleic acid CT value was included in the de isolation management and discharge standards as the measurement basis; The duration of isolation management and health monitoring after discharge was also shortened from 14 days to 7 days. The background of the new diagnosis and treatment plan is that Omicron strain has replaced delta strain as the main epidemic strain. The clinical manifestations of patients with covid-19 pneumonia show new characteristics, that is, the symptoms are relatively mild. In addition, new drugs for covid-19 pneumonia have been listed one after another, and the treatment experience and treatment methods have been further enriched. The new diagnosis and treatment plan includes two specific anti covid-19 drugs approved by the State Food and drug administration, namely, oral small molecule drug pf-07321332 / ritonavir tablets (paxlovid) and domestic monoclonal antibody drugs (ambavizumab / romisivir mAb injection). Both belong to antiviral drugs and are suitable for early intervention of light and ordinary patients. The release of the new diagnosis and treatment plan confirms the investment logic of covid-19 oral drug industry chain repeatedly prompted by us.
At present, the covid-19 pneumonia epidemic still has high uncertainty, and the demand for covid-19 treatment is also relatively clear. The recent imitation authorization of covid-19 oral medicine by MSD and Pfizer is the external embodiment of the global market demand. Covid-19 oral medicine, as the last puzzle in the covid-19 treatment industry chain, has a broad market prospect. In the special report on covid-19 epidemic situation in November last year, the annual strategy report and the weekly report since the beginning of the year, we have repeatedly pointed out the investment opportunities of covid-19 oral drug industry chain, and the market trend has verified our judgment. With the stability of the popular track and the current situation that the pharmaceutical industry has no clear direction in the short term, combined with the release of the ninth edition of treatment guidelines, it is suggested to continue to pay attention to the investment opportunities of covid-19 small molecule drug industry chain, and pay attention to the listed companies deeply involved in covid-19 prevention and treatment drug supply chain. At the same time, we suggest paying attention to the repair opportunities in the vaccine sector.
Upstream investment opportunities of covid-19 treatment industrial chain include suppliers of covid-19 treatment upstream APIs that benefit from the authorization of MMP, such as Apeloa Pharmaceutical Co.Ltd(000739) , Zhe Jiang Hua Hai Pharmaceuticalco.Ltd(600521) , Zhejiang Jiuzhou Pharmaceutical Co.Ltd(603456) , Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Aba Chemicals Corporation(300261) , Ningbo Menovo Pharmaceutical Co.Ltd(603538) , and Zhejiang Tianyu Pharmaceutical Co.Ltd(300702) ; Investment opportunities in the midstream of covid-19 treatment industry chain: covid-19 treatment drug manufacturers with outstanding R & D ability, such as Shanghai Junshi Biosciences Co.Ltd(688180) -u, Wuxi Apptec Co.Ltd(603259) and tengshengbo drug-b. Covid-19 downstream industrial chain investment opportunities: China Meheco Group Co.Ltd(600056) ; Relevant enterprises of Chinese patent medicine included in covid-19 diagnosis and treatment plan: Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Shandong Buchang Pharmaceuticals Co.Ltd(603858) etc; Listed companies deeply involved in covid-19 prevention and treatment drug supply chain: Asymchem Laboratories (Tianjin) Co.Ltd(002821) , Porton Pharma Solutions Ltd(300363) , etc; Covid-19 vaccine manufacturers: Cansino Biologics Inc(688185) and Chongqing Zhifei Biological Products Co.Ltd(300122) etc.
On the whole, we believe that the focus of market repair may continue to focus on sectors with marginal improvement and valuation repair logic. The trend of API sector has verified our latest view. At the time point when valuation switching is gradually approaching, advance layout needs to pay special attention to marginal improvement and sustainability of growth. 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 the layout of innovative drugs and innovative drug industry chain, high-end medical devices, medical consumption terminals and medical consumption with scarcity and consumption attributes, and tap the second-line blue chips with relatively low valuation:
1) innovative drugs and the industry chain of innovative drugs and innovative drugs, including synthetic and specialist innovative drug enterprises, CXO industry, and the industrial chain of innovative drugs, including comprehensive and specialist innovative drug enterprises, and CXO industry. It is suggested to focus on ‘ Jiangsu Hengrui Medicine Co.Ltd(600276) ‘ \ and Apeloa Pharmaceutical Co.Ltd(000739) 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
