Market review: last week, the A-share pharmaceutical and biological index fell 3.94%, underperforming the CSI 300 index by 1.55pp, outperforming the gem composite index by 1.80pp, ranking 23rd among 28 sub industries, mainly due to the large decline in medical services. The H-share Hang Seng medical health index fell 6.68%, underperforming the Hang Seng state-owned enterprise index by 6.62pp, ranking 11 / 11. Tracking of R & D Progress of listed companies: last week, the clinical applications of bgb-11417 film coated tablets and Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) hlx301 of Baiji Shenzhou were newly undertaken, and the ind applications of Jiangsu Hengrui Medicine Co.Ltd(600276) hrs-7535 tablets and shr8028 eye drops were newly undertaken. Spt-07a of HUYUN new drug is undergoing phase III clinical treatment; Fcn-159 of Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , tqb2858 of Zhengda Tianqing and bgb-11417 of Baiji are undergoing phase I clinical trials. Medical insurance sector is expected to continue its strong view this week
On December 30, 2021, the State Medical Insurance Bureau and the State Administration of traditional Chinese Medicine issued the guiding opinions on medical insurance supporting the inheritance, innovation and development of traditional Chinese medicine. This opinion can be summarized into two points: 1 Medicare supports the development of traditional Chinese medicine with clear curative effect. DRGs are not considered or given priority to be included in Chinese patent medicine temporarily, which is beneficial to the exclusive varieties of traditional Chinese medicine, including innovative traditional Chinese medicine; 2. Improve the accessibility of TCM reimbursement, expand the scope of TCM institutions into medical insurance, and provide support for TCM diagnosis and TCM rehabilitation industry. This policy is good for the industrial chain of traditional Chinese medicine. We suggest to continue to pay attention to three types of investment opportunities in the industrial chain of traditional Chinese medicine: 1. OTC of brand Chinese patent medicine: Chongqing Taiji Industry (Group) Co.Ltd(600129) , Tianjin Zhongxin Pharmaceutical Group Corporation Limited(600329) , Beijing Tongrentang Co.Ltd(600085) , Henan Lingrui Pharmaceutical Co.Ltd(600285) , Jianmin Pharmaceutical Group Co.Ltd(600976) , Yunnan Baiyao Group Co.Ltd(000538) ; 2. Traditional Chinese medicine formula granules: China traditional Chinese medicine (H) ( Chongqing Taiji Industry (Group) Co.Ltd(600129) parent company), Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) ; 3. Traditional Chinese medicine pharmaceutical equipment: Zhejiang Canaan Technology Limited(300412) , Shinva Medical Instrument Co.Ltd(600587) , etc.
Investment strategy in 2022: know the constant changes, keep the integrity and innovate. Based on the changes and invariance of pharmaceutical investment, we believe that we should actively grasp the investment opportunities in the direction of innovation and internationalization in the future. In terms of innovative drugs and vaccines, Xinda Biology (H) and Rongchang Biology (H) are recommended; In terms of CXO, Yao Mingsheng (H), Pharmaron Beijing Co.Ltd(300759) , Shanghai Haoyuan Chemexpress Co.Ltd(688131) , Pharmablock Sciences (Nanjing) Inc(300725) are recommended; In the field of equipment and Life Sciences, Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) , minimally invasive medicine (H), Shinva Medical Instrument Co.Ltd(600587) , Amoy Diagnostics Co.Ltd(300685) , Iray Technology Company Limited(688301) ; In terms of innovative cutting-edge technologies, pay attention to unlisted enterprises such as Aibo biology; For domestic consumption, we recommend Jinxin reproduction (H), Lbx Pharmacy Chain Joint Stock Company(603883) , Shandong Wit Dyne Health Co.Ltd(000915) , Boya Bio-Pharmaceutical Group Co.Ltd(300294) .
Risk analysis: price reduction risk of drugs / consumables; Industry “black swan” event; Risk of R & D failure.
