Key investment points:
Current market review
In the current period (4.16 – 4.23), the Shanghai Composite Index closed at 308692, down 3.87%; The CSI 300 index closed at 401325, down 4.19%; SME 100 closed at 749031, down 3.64%; In the current period, Shenwan pharmaceutical and biological industry index closed at 883306, down 7.34%, ranking 28th among Shenwan’s 31 primary industry indexes. The seven secondary sectors all outperformed the Shanghai Composite Index, CSI 300 and SME 100.
Important information
Covid-19 is the first severe oral drug in the world, and it is also a targeted drug for prostate cancer
On April 11, veru, a tumor biopharmaceutical company in Miami, announced that its covid-19 oral drug sabizabulin phase III clinical trial was successful. The announcement showed that the drug was effective in a double-blind, randomized, placebo-controlled phase 3 clinical trial. This is the first drug to significantly reduce the risk of death in hospitalized patients with moderate to severe covid-19 clinically and statistically.
There are 108 cases of hepatitis in children in the UK and in the United States. Many people need liver transplantation! Or covid-19? Who alerts
On April 21 local time, the latest report from the British health department said that the survey showed that 34 new cases of unexplained childhood hepatitis had been found in the UK, with a total of 108 cases. Of these cases, eight children underwent liver transplantation because of their severe condition. At present, the cause of this hepatitis is not clear, and the WHO and the European Center for Disease Control and prevention have issued warnings one after another. Preliminary studies show that the acute hepatitis may be caused by a variant or sub variant of covid-19 virus sars-cov-2 (such as Omicron, XD, Xe, etc.).
Who supports Pfizer covid-19 oral drug for high-risk patients
On April 22, who approved Pfizer covid-19 oral drug paxlovid for high-risk patients (i.e. patients with hospitalization risk of more than 10%), and the analysis of the organization’s trial data showed that paxlovid significantly reduced the risk of hospitalization. The who said that among the existing covid-19 treatment drugs, Pfizer’s oral drug paxlovid is by far the most effective.
Core view
In the current period, Shenwan pharmaceutical and biological industry index closed at 883306, down 7.34%, ranking 28th among Shenwan’s 31 primary industry indexes. Among the seven secondary sectors, they all outperformed the Shanghai Composite Index, CSI 300 and SME 100.
In terms of the epidemic situation, the number of newly confirmed cases per day in the world this week fluctuates slightly compared with last week. However, in the medium and long term, the mitigation trend of the global Omicron epidemic is further confirmed. At present, the number of newly added cases per day is less than 1 million, and the peak and trough values are the lowest since the beginning of the Omicron epidemic in late 2021. The epidemic situation in China is still severe, but judging from the areas where the daily new cases are located, at present, the vast majority of the daily new cases are in Shanghai. In terms of vaccination, vaccination has made steady progress. As of April 21, 2022, China has reported 3.325 billion doses of covid-19 virus vaccine.
In terms of news, on April 20, the National Health Commission issued the list of county hospitals in the “thousand county project” to improve the comprehensive capacity of county hospitals, and announced the list of 1233 county hospitals that began to sprint to tertiary hospitals. Recently, the publication of this list is an important measure to promote the current new medical infrastructure, and will have a far-reaching impact on the whole medical industry. In October 2021, the work plan for improving the comprehensive capacity of county hospitals of the “thousand county project” (20212025) issued by the National Health Commission pointed out that by 2025, at least 1000 county-level medical institutions in China will reach the service level of level III medical institutions, and the allocation of relevant medical equipment is a key factor to reach the service level of level III medical institutions. Therefore, this policy will also bring new demand to the configuration demand of relevant medical equipment, so as to drive the rapid development of the medical device industry.
We recently combed covid-19 therapeutic drugs in the United States. Currently, covid-19 prescription drugs approved / approved for emergency use in the United States include remdesivir of Gilead, regen cov of regen, paxlovid of Pfizer and molnupiravir of MSD. From the sales of approved prescription drugs of covid-19 and the number of confirmed cases of covid-19 in the United States, the sales of paxlovid and molnupiravir after listing are significantly higher than those of redcivir and regen cov. After the first two are successively approved at the end of 2021, they show a resonance relationship with the confirmed cases of covid-19 in the United States from February 2022. After February 2022, the confirmed cases of covid-19 in the United States gradually declined, but the sales of paxlovid and molnupiravir still gradually increased, especially paxlovid. According to the US covid-19 test data, since the beginning of January 2022, the number of covid-19 tests in the United States has continued to decline, which still deviates significantly from the prescription sales of paxlovid and molnupiravir. In terms of the distribution of covid-19 treatment drugs in the United States, as of April 23, 2022, covid-19 treatment drugs in the United States had distributed a total of 9.1007 million courses, of which paxlovid of Pfizer distributed 1.7391 million courses, while molnupiravir distributed 2.6999 million courses. From March 7, paxlovid distributed 175000 courses per week, becoming the most important part of covid-19 treatment drugs in the United States.
The covid-19 treatment guideline updated by who on April 22 also takes paxlovid as the recommended oral drug for mild patients with high risk of hospitalization. The who said that among the existing covid-19 treatment drugs, Pfizer oral paxlovid is by far the most effective and strongly recommended. Who also suggested Pfizer and other companies to further expand the scope of MPP patents. If the scope of covid-19 oral drug MPP continues to expand, it will undoubtedly provide a guarantee for the sales volume of covid-19 oral drug market. The distribution volume of covid-19 oral drug is expected to be further opened globally, especially in low – and middle-income countries, and the demand for upstream API is expected to continue to be supported.
On the whole, the epidemic broke out again in Shanghai at the end of March, and the market is generally expected to cause certain pressure on China’s economy in the short term. Affected by the resonance of many factors such as macroeconomic and market pessimism, the overall turnover and volume of the industry showed a significant contraction. From the perspective of valuation, the industry has been at a long-term historical low. When the underlying logic and background of the pharmaceutical industry have not changed, the focus of market repair in the future may continue to focus on the sectors with marginal improvement and valuation repair logic. At the time point when valuation switching is gradually approaching, the layout in advance needs to pay particular attention to the sustainability of marginal improvement and 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 industries with relatively low valuation at the same time
Second tier blue chip:
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) and Pacific Shuanglin Bio-Pharmacy Co.Ltd(000403) .
Risk tips: covid-19 epidemic fluctuation risk and market adjustment risk
