This week, we discuss several key technologies of Huada Zhizao high-throughput sequencing.
1. Patent dispute between Sino US gene sequencing companies
On March 27 local time, the Northern District Court of California made a first instance judgment on the patent infringement case of gene sequencing giant Illumina against Huada Zhizao and other entities involved in the case in the United States:
1. Illumina's U.S. Patent No. 7541444 named "modified nucleotide" was ruled invalid;
2. Several other patents of Illumina were found to be infringed;
3. Illumina will receive compensation of US $8 million.
Judging from the judgment results, each side has its own victory and defeat, but Illumina does not have an absolute advantage:
(1) Illumina lost the key patent, which means that Huada Zhizao has the right to sell coolmps based products in the United States 10 months in advance, that is, August 2022 ™ Products related to sequencing technology; (2) The amount of compensation was reduced from $25.4 million originally requested by Illumina to $8 million, which is only one third of the amount claimed.
Huada Zhizao coolmps ™ The launch of sequencing products is expected to further improve the performance, quality, practicability and cost performance of its dnbseq series sequencing system.
2. Huada Zhizao has established an independent and controllable technical system
Based on the technology of CGUs, a wholly-owned subsidiary, and continuous independent innovation, Huada Zhizao has established an independent and controllable technology system. In the field of gene sequencing, it has formed a number of source core technologies represented by "dnbseq sequencing technology", "regular array chip technology", "two-color sequencing technology", which has laid a solid foundation for the company to keep up with the research frontier in the field of life science.
(1) DNA nanosphere preparation technology can effectively avoid the problem of error index accumulation in conventional PCR amplification methods, so as to improve the accuracy of sequencing.
(2) two color sequencing technology, on the premise of ensuring the accuracy, reduces the sequencing time and data processing time, simplifies the optical system of the sequencer and reduces the consumption of fluorescent reagent, effectively reduces the sequencing cost and improves the reliability of the sequencer.
(3) sequencing reagent consumables based on coolmps technology can make base recognition clearer, so as to achieve more accurate and longer sequencing.
(4) regular array chip technology provides discrete and accurate single-pixel information through accurate matching with the optical lens of the sequencer to ensure that the optical signal collected by the optical lens has high specificity, so as to reduce the background noise, ensure the sequencing accuracy, improve the utilization efficiency of unit area of sequencing chip and improve the signal acquisition efficiency.
As of December 31, 2020, the company has 380 valid authorized patents at home and abroad, ensuring the company's subsequent technological growth space.
Market review: this week (from March 28 to April 1), the biomedical sector rose 0.02%, underperforming the CSI 300 index by 2.41pct and the gem index by 1.08pct, ranking in the middle among the 30 CITIC primary industries. Among the sub sectors of CITIC medicine this week, Chinese Herbal Pieces rose the most, up 3.41%, mainly because the State Council issued the notice on the development plan of traditional Chinese medicine in the 14th five year plan on March 29 to promote the high-quality development of traditional Chinese medicine and industry; Chemical raw materials fell the most, down 3.18%.
Investment suggestions:
Recent view: high-quality companies have become more and more cost-effective. In the short term, continue to suggest two ideas, preferably:
1. Rapid growth, continuous improvement of performance and reasonable valuation range.
1) vaccines: Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) , Chongqing Zhifei Biological Products Co.Ltd(300122) and Shenzhen Kangtai Biological Products Co.Ltd(300601) ;
2) oral consumables: Yantai Zhenghai Bio-Tech Co.Ltd(300653) (active biological bone will be approved soon); Angel of the times (local invisible orthodontic leader)
3) life related upstream: Jenkem Technology Co.Ltd(688356) (PEG derivative), Nanjing Vazyme Biotech Co.Ltd(688105) (molecular enzyme), Acrobiosystems Co.Ltd(301080) (recombinant protein reagent).
2. Downside risk is limited, waiting for Fundamentals to catalyze.
1) blood products sector (leading enterprises are expected to benefit from the 14th five year plan of pulp stations in many provinces and further open the growth of pulp volume, including Beijing Tiantan Biological Products Corporation Limited(600161) and Hualan Biological Engineering Inc(002007) );
2) pharmacy sector ( Yifeng Pharmacy Chain Co.Ltd(603939) , Yixintang Pharmaceutical Group Co.Ltd(002727) , Lbx Pharmacy Chain Joint Stock Company(603883) , Dashenlin Pharmaceutical Group Co.Ltd(603233) , Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) (short-term policy disturbance does not change long-term development logic),
3) private service leaders: haijiya medical and Jinxin reproductive;
4) China sublingual desensitization faucet Zhejiang Wolwo Bio-Pharmaceutical Co.Ltd(300357) ;
5) China's leading pharmaceutical glass enterprise Shandong Pharmaceutical Glass Co.Ltd(600529) .
3. Continue to pay attention to covid-19 antigen detection.
1) recommendation: Guangzhou Wondfo Biotech Co.Ltd(300482) , Nanjing Vazyme Biotech Co.Ltd(688105) , Sino Biological Inc(301047) medium and long term perspective: pay attention to the invariability in change and look for opportunities with relative certainty. The impact of centralized mining continues to expand. The opportunity at the investment level is that the foundation for the establishment of centralized mining is that "multiple enterprises supply mutually replaceable varieties, and the production capacity can be supplied indefinitely in theory". The basis for enterprises to maintain product price and profit space is the competition pattern, and the dynamic excellent competition pattern lies in the ability to continuously develop products and product iteration, which remains unchanged.
Start DRG / Dip reform in 2022. As a means of payment, the core role of DRGs is to achieve a balance between improving the efficiency and quality of diagnosis and treatment and ensuring the sustainability of medical insurance through refined medical insurance management. Hospitals that cannot actively adapt to the rules of the game will be eliminated. The opportunity at the investment level lies in that excellent private medical institutions have paid more attention to cost control for a long time, with higher operation efficiency and competitive advantage.
The general trend of industrial development is: China Meheco Group Co.Ltd(600056) industrial manufacturing is upgraded, the competitiveness is continuously improved, and moves upstream in the global production value chain.
The competitiveness of upstream raw materials is prominent:
1) biological "core" - life science support industrial chain: domestic enterprises have developed rapidly, reagent quality has reached the international leading level, and their competitiveness has been continuously improved. Entering the overseas market through global comparative advantage, China benefits from domestic alternative logic, with high growth and great development potential.
2) IVD raw materials and consumables: covid-19 epidemic opens the window for the transfer of global IVD raw materials and consumables production and supply chain to China.
Accelerated internationalization process: with the breakthrough of key technologies of Chinese enterprises, not only the localization rate of the Chinese market is accelerating, but also some high-quality enterprises have the strength to compete with international giants.
1. Manufacturing upgrading of pharmaceutical industry and continuous improvement of Competitiveness:
Upstream: life science support industry chain, IVD raw materials and consumables, related targets: Nanjing Vazyme Biotech Co.Ltd(688105) , Sino Biological Inc(301047) , Acrobiosystems Co.Ltd(301080) , Suzhou Nanomicro Technology Co.Ltd(688690) ;
High end medical devices: endoscope and sequencer, related subjects: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , Qingdao Novelbeam Technology Co.Ltd(688677) , Sonoscape Medical Corp(300633) , Aohua endoscope, Micro-Tech (Nanjing) Co.Ltd(688029) ; Huada Zhizao (IPO application in progress); International layout of medical devices, related subjects: Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) ;
Others: Jenkem Technology Co.Ltd(688356) , Shandong Pharmaceutical Glass Co.Ltd(600529) .
2. Pay attention to the supply pattern: blood products, related subjects: Beijing Tiantan Biological Products Corporation Limited(600161) , Boya Bio-Pharmaceutical Group Co.Ltd(300294) and Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) ; Desensitized preparation: .
3. Private medical service sector with differentiated competition. Ophthalmology, Aier Eye Hospital Group Co.Ltd(300015) ; Dentistry, Topchoice Medical Co.Inc(600763) ; Assisted reproduction, Jinxin reproduction; Cancer treatment services, Hagia.
4. Pharmacy sector. Related objects: Yifeng Pharmacy Chain Co.Ltd(603939) , Dashenlin Pharmaceutical Group Co.Ltd(603233) , Lbx Pharmacy Chain Joint Stock Company(603883) and Yixintang Pharmaceutical Group Co.Ltd(002727) .
5. Aging and consumption upgrading.
Class II vaccine, related targets: Chongqing Zhifei Biological Products Co.Ltd(300122) , Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) and Changchun Bcht Biotechnology Co(688276) ; Invisible orthodontics, related subjects: Angel of the times;
Risk tips: policy risk, price risk, performance risk less than expected, product R & D risk, expansion progress risk less than expected, medical accident risk, uncertainty of overseas covid-19 virus epidemic, M & A integration risk less than expected, etc.
