Although there is still a gap with China’s CXO “leader” Wuxi Apptec Co.Ltd(603259) ( Wuxi Apptec Co.Ltd(603259) . SH) in terms of revenue volume and business scope, Pharmaron Beijing Co.Ltd(300759) ( Pharmaron Beijing Co.Ltd(300759) . SZ) has never stopped catching up.
Recently, Pharmaron Beijing Co.Ltd(300759) offered an acquisition to acquire 100% equity of Beijing Ankai Yibo Biotechnology Co., Ltd. (hereinafter referred to as “Ankai Yibo”) with its own capital of 83.6 million yuan.
Pharmaron Beijing Co.Ltd(300759) stressed that the above transaction is to further strengthen the quality control of experimental animals, optimize the supply system of experimental animals, and strengthen the company’s ability in biosciences such as drug safety evaluation.
In order to focus on the whole industrial chain of CXO, over the past year, Pharmaron Beijing Co.Ltd(300759) has been taking continuous steps in extension M & A.
For example, in order to ensure the supply of experimental animals, Pharmaron Beijing Co.Ltd(300759) also obtained the control of Zhaoqing chuangyao Biotechnology Co., Ltd. and acquired 100% equity of Zhongke Lingrui (Zhanjiang) Biotechnology Co., Ltd; In addition, in order to strengthen the ability in quantitative pharmacology, pharmacovigilance, medical supervision, medical strategy and medical writing, Pharmaron Beijing Co.Ltd(300759) acquired Enyuan Pharmaceutical Technology (Beijing) Co., Ltd., detaimai (Hangzhou) Pharmaceutical Technology Co., Ltd. and their subsidiaries; In addition, in order to increase the layout of gene therapy services, Pharmaron Beijing Co.Ltd(300759) completed the acquisition of pharmaron biology UK in the second quarter of 2021.
The annual report shows that in 2021, Pharmaron Beijing Co.Ltd(300759) the capital expenditure for internal construction and extension M & A was 2.093 billion yuan and 1.437 billion yuan respectively, an increase of 59.05% and 30.61% respectively over 2020.
“laboratory service” is still the main force of revenue
In 2021, Pharmaron Beijing Co.Ltd(300759) achieved a revenue of 7.444 billion yuan, a year-on-year increase of 45%, and a net profit attributable to the parent company of 1.661 billion yuan, a year-on-year increase of 41.68%.
Pharmaron Beijing Co.Ltd(300759) ‘s business can be divided into “laboratory service”, “CMC (small molecule cdmo) service”, “clinical research service” and “macromolecule and cell and gene therapy service”.
Pharmaron Beijing Co.Ltd(300759) , which started from the most front-end field of CrO (i.e. “laboratory drug discovery”), achieved a revenue of 4.566 billion yuan in 2021, accounting for more than 60% of the total revenue, and remained the main force of the company’s revenue, maintaining a growth rate of more than 40% in 2021.
The next stage after drug discovery and production.
In 2021, Pharmaron Beijing Co.Ltd(300759) the “CMC (small molecule cdmo) service” was mainly to provide chemical and preparation process development and production services to pharmaceutical enterprises in the drug development stage, with a revenue of 1.746 billion yuan, accounting for 23.46%, a year-on-year increase of more than 40%.
In the field of clinical cro where Hangzhou Tigermed Consulting Co.Ltd(300347) is better at ( Hangzhou Tigermed Consulting Co.Ltd(300347) achieved revenue of 2.994 billion yuan in 2021). In 2021, Pharmaron Beijing Co.Ltd(300759) achieved revenue of 956 million yuan, accounting for 12.85%, with a year-on-year increase of more than 50%.
Another business segment of Pharmaron Beijing Co.Ltd(300759) is “macromolecule and cell and gene therapy services”. In 2021, it achieved a revenue of 151 million yuan, a year-on-year increase of 466.58%, but it is still in a state of loss, with a gross profit margin of – 13.84%.
For the loss, Pharmaron Beijing Co.Ltd(300759) attributed it to the high operating cost of the newly acquired gene therapy drug development and production service (cdmo) in the investment stage of the business.
Regarding this business, Pharmaron Beijing Co.Ltd(300759) insiders said in an interview with the media, “From the perspective of the global market, the technology in the field of CGT (cell and gene therapy) is undergoing rapid iteration. There are many customer needs in CGT, and many of them have not been met. As a macromolecule and cell and gene therapy service sector for medium and long-term strategic development, the company will continue to invest, and the time point of achieving breakeven may be delayed for some time.”.
prospective layout of “cell and gene therapy services”
In 2021, Pharmaron Beijing Co.Ltd(300759) officially began to manage “macromolecule and cell and gene therapy services” as an independent sector, which is distributed through self construction and M & A, and regarded as the company’s medium and long-term development strategy.
On the one hand, Pharmaron Beijing Co.Ltd(300759) completed the acquisition of pharmaron biology UK in Liverpool, UK in the second quarter of 2021 The company has held the biological drug production license issued by MHRA since 2007. Through business integration, the company has transformed pharmaron biology UK from the original internal R & D center to a company providing gene therapy drug cdmo services to third-party customers. At present, pharmaron biology UK has begun to undertake external orders.
On the other hand, in the 2021 annual report, Pharmaron Beijing Co.Ltd(300759) mentioned that in order to support the development of laboratory services and CGT laboratory services in the United States, San Diego and exon will further expand the laboratory area.
on April 1, Pharmaron Beijing Co.Ltd(300759) the staff of the board office told the 21st Century Business Herald reporter, “CGT (cell and gene therapy) is a promising field of drug research and development. In terms of cell and gene therapy, foreign countries started earlier and the technology is relatively advanced, so the company obtains relevant technology through extended M & A.”
At present, the broad prospects in the field of cell and gene therapy have become an industry consensus, and CXO leaders have made a forward-looking layout of this subdivision track.
In October 2021, Wuxi Apptec Co.Ltd(603259) built a 15300 square meter process R & D and commercial production center in Shanghai Lingang Holdings Co.Ltd(600848) and officially put into operation, becoming the company’s second production base of cell and gene therapy in China after Wuxi Huishan; Its 13000 square meter expanded base in Philadelphia was officially put into operation in November 2021, which tripled the company’s high-end cell and gene therapy testing capacity.
In addition, in 2021, Wuxi Apptec Co.Ltd(603259) completed the acquisition of oxgene in the UK and continued to add cdmo services for cell gene therapy.
recently, the 21st Century Business Herald reporter also learned from Wuxi Apptec Co.Ltd(603259) that “it continues the strong growth momentum in the fourth quarter of 2021. It believes that 2022 will be a turning year for the development of cell and gene therapy ctdmo business, and the revenue growth of this sector is expected to exceed the growth rate of the industry”.
Coincidentally, Porton Pharma Solutions Ltd(300363) as early as 2020 began to fully focus on gene cell therapy business.
In April 2021, Suzhou boten, a holding subsidiary, introduced external war investors such as Hillhouse, raising a total of 400 million yuan to promote the development of the company’s gene cell therapy cdmo business.
According to the annual report of 2021, Porton Pharma Solutions Ltd(300363) the cdmo business of gene cell therapy achieved a revenue of 13.87 million yuan, an increase of 897% over the same period last year.
In addition, in 2021, Porton Pharma Solutions Ltd(300363) cdmo introduced 27 new projects and signed new orders of about 130 million yuan.
fali China new drug R & D Service
“Cro orders from Chinese innovative drug enterprises are also one of the incremental opportunities for China’s cro industry in the future,” an industry analyst told the 21st Century Business Herald earlier.
Soochow Securities Co.Ltd(601555) previously, the research report pointed out, “we judge that 20182028 is the golden decade for the development of China’s CXO company, and the revenue volume of leading companies in various segments has 8-14 times of that in ten years. In the future, the world’s largest CXO company will appear in China. China has global competitive advantages in this industrial chain and can provide customers with demand more quickly, better and economically.”
It can be seen that with the growth of China’s demand for new drug R & D and the transfer of the global drug industry chain, China’s CXO leaders represented by Wuxi Apptec Co.Ltd(603259) , Pharmaron Beijing Co.Ltd(300759) are not only undertaking orders from overseas pharmaceutical giants, but also making efforts to provide new drug R & D services in China.
At present, Pharmaron Beijing Co.Ltd(300759) has 18 operating entities in China, the UK and the US (including 10 overseas). In 2021, Pharmaron Beijing Co.Ltd(300759) revenue from customers in North America accounted for 64.20%, revenue from customers in Europe (including the UK) accounted for 15.63%, revenue from customers in China accounted for 17.13%, and revenue from customers in other regions accounted for 3.04%.
In 2021, Pharmaron Beijing Co.Ltd(300759) Chinese business revenue accounted for 17.13% and foreign business revenue accounted for 82.87%. Although China’s business revenue accounts for a relatively small proportion, it has increased by 82% compared with 2020.
Moreover, Pharmaron Beijing Co.Ltd(300759) the proportion of business revenue in China has been increasing in recent three years, accounting for 12.73%, 13.64% and 17.13% respectively from 2019 to 2021.
CXO leader Wuxi Apptec Co.Ltd(603259) is also actively expanding its business in China: Wuxi Apptec Co.Ltd(603259) in 2021, the revenue from customers in the United States was RMB 12.146 billion, a year-on-year increase of 37.1%; The revenue from European customers was 3.719 billion yuan, a year-on-year increase of 40.3%; The revenue from Chinese customers was 5.802 billion yuan, with a year-on-year increase of 40%.
In addition, Wuxi Apptec Co.Ltd(603259) separately listed China new drug research and Development Service Department (Wuxi ddsu) achieved a revenue of 1.251 billion yuan in 2021, with a year-on-year increase of 17.5%, and adjusted non IFRS gross profit of 571 million yuan, with a year-on-year increase of 9.3%.
Porton Pharma Solutions Ltd(300363) , which is aware of the growth space of new drug R & D services in China.
According to the financial report, Porton Pharma Solutions Ltd(300363) ‘s Chinese business revenue increased from 15.61% in 2020 to 21.87% in 2021.
Porton Pharma Solutions Ltd(300363) also pointed out in the 2021 annual report, “Although the development of innovative drugs in China currently faces pain points such as excessive duplication of targets, insufficient original innovation and imperfect payment system, in the long run, in the face of broad market demand, those innovative drug enterprises that meet clinical needs and are competitive are still expected to stand out. Cdmo enterprises with experience in serving global new drug R & D can help Chinese innovative drug enterprises promote the drug development process faster and better.”
