The market fell in April, with the CSI 300 index falling 4.89% and the CITIC pharmaceutical index falling 13.81%, 8.92 percentage points lower than the CSI 300 index.
Although the current national epidemic is still in the critical stage, the overall trend is good. We continue our previous view that the follow-up investment logic of the pharmaceutical sector will focus on “recovery” and will gradually shift to the main industry investment logic. However, the recovery after the epidemic is expected to be a relatively slow process. Therefore, the pharmaceutical sector is more reflected in structural opportunities, focusing on the recovery progress.
In terms of order, consumer medicine and other fields are relatively likely to recover first, and the pharmaceutical manufacturing industry will gradually recover with the recovery of supply chain and demand.
In terms of the order of recovery, we expect that the ophthalmic industry chain in consumer medicine may recover first, and then the subdivided fields such as medical services and elective surgery are expected to recover gradually. With the recovery of supply chain and demand, the manufacturing industry will gradually recover, including CXO, upstream of life sciences, medical devices, innovative drugs, vaccines and industrial chain. Considering that the epidemic will clear the social surface first and the recovery speed is slow, it is suggested to pay attention to the leading companies with more stable performance.
On April 30, Pfizer announced that the phase II / III clinical trial data of covid-19 oral drug paxlovid for post exposure prevention did not reach statistical difference. At present, paxlovid’s distribution volume in the United States continues to maintain an upward trend, and Pfizer still maintains paxlovid’s revenue guidance of about $22 billion in 2022. However, the risk of failure in subsequent indication expansion may bring some uncertainty to its future sales growth. For cdmo companies with covid-19 small molecule drug incremental orders, this year, the performance of large orders will increase rapidly, and the production capacity is also in the period of rapid expansion. We believe that the subsequent analysis will gradually refocus on the main business related to non covid-19.
On May 2, Hehuang pharmaceutical announced that the FDA has sent a complete reply to the application for the listing of new drugs for the treatment of pancreatic and non pancreatic neuroendocrine tumors. The FDA believes that the current data package is not enough to support the approval of the drug in the United States, and it needs to include more international multicenter clinical trials (MRCT) representing the patient population in the United States to support the approval in the United States. The FDA did not question the safety and efficacy of sofatinib in the treatment of Chinese patients this time. It was more based on encouraging MRCT and emphasizing the differences between the American population in the trial. We believe that the internationalization logic of China’s self-developed products is in the ascendant, and the truly high-quality and differentiated varieties can still be approved for listing in the United States through reasonable experimental designs such as MRCT.
Recommended target: Wuxi Apptec Co.Ltd(603259) : global leading enterprise of preclinical cro, with prominent industry position Aier Eye Hospital Group Co.Ltd(300015) : steady growth of business, continuous improvement of industrial chain status and cost-effective valuation Shenzhen Mindray Bio-Medical Electronics Co.Ltd(300760) : leading medical device enterprise with outstanding R & D and sales capacity and reasonable valuation Guangzhou Kingmed Diagnostics Group Co.Ltd(603882) : the leader of the third-party medical laboratory, and the main business has maintained stable growth.
Risk tip: the industry policy has changed beyond expectations and the comparative advantage of the sector has weakened.
