MPP authorized molnupiravir to produce, and 5 Chinese companies were licensed
On January 20, 2022, MPP (medicines patent pool, generally translated as "drug patent pool", the same below) announced that it had signed contracts with 27 generic drug suppliers around the world, authorizing them to supply molnupiravir, a small molecule therapeutic drug of methadone anti covid-19, to 105 low-income countries. According to the official website of MPP, qualified suppliers in China include Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Brightgene Bio-Medical Technology Co.Ltd(688166) , Langhua pharmaceutical, Desano, Longze pharmaceutical, etc. Langhua pharmaceutical is only authorized to supply APIs, and other Chinese companies are also authorized to produce APIs and preparations. In addition, according to the official website of MPP, Pfizer signed an agreement with MPP in November 2021, authorizing the Licensor to produce paxlovid for low - and middle-income countries, involving 53% of the world's population.
Background: to promote drug accessibility through production authorization, production capacity is very important
Business model: the authorization model promotes drug accessibility in low - and middle-income countries. MPP was set up by the United Nations to increase the accessibility of low and middle income countries in key drug areas. By the beginning of 2022, the authorized domain of MPP included 13 anti HIV drugs, 1 anti HIV technology platforms, 3 anti HCV drugs, 1 TB therapies, 2 long-term technologies, 2 anti COVID-19 drugs and 1 COVID-19 antibodies. In terms of business model, MPP does not produce API or generic drugs. Who and MPP jointly screen drugs from the perspectives of disease burden, effectiveness and accessibility. After the patent holder cooperates and authorizes, the global API / generic drug supplier shall fill in EOL (expressions of interest), The original manufacturer can choose whether to charge the franchise fee (for example, as long as covid-19 is still regarded by who as public health emergency of international concern, MSD will not charge the licensing fee for molnupiravir). The authorized pharmaceutical enterprises need to promote the sales in the authorized countries themselves. From January 2012 to December 2020, MPP has supplied 18.55 billion doses of treatment drugs, saving us $920 million.
Screening criteria: focus on the assessment of compliance production capacity, and combine subjective evaluation with weighted scoring. According to the MPP official website, EOL contains "capacity, capabilities and track record for manufacturing quality assurance medicines, your R & D, regulatory compliance and finance", that is, capacity reserve, high-quality production capacity, R & D capacity, regulatory completeness and financial status are important criteria for MPP assessment. The evaluation process is divided into two stages: in the first stage, the members of the expert group evaluate the EOL without knowing the background of the applicant, and in the second stage, the weighted average takes the highest score.
Potential impact: Deepening supply chain cooperation and building an international system
We believe that obtaining MPP authorization is an embodiment of the applicant's global compliance production capacity. Benefiting from the supporting advantages of China's chemical industry and the accelerated expansion of compliance capacity, we expect China's API and cdmo companies to deepen their influence in the global drug supply chain. From the perspective of internationalization of APIs and preparations, the sales volume of the company after authorization depends on the international sales network construction and supply chain management ability of each company. From the perspective of performance fulfillment, we suggest paying attention to ① capacity reserve (whether the authorized company has sufficient capacity to explore the market of low-income countries without affecting the production scheduling of existing projects); ② Build an international sales team (companies with promotion teams in Asia, Africa and Latin America may benefit more).
Investment suggestion: combined with our research on Indian API / generic / cdmo companies (Indian companies account for a relatively high proportion of MPP authorized production companies), we believe that Chinese companies still have a gap in international registration capacity and sales network. In the medium and long term, We suggest paying attention to the medium and long-term impact of Chinese pharmaceutical manufacturing companies such as API / generic / cdmo on the change of participation in the international drug supply chain and the establishment of registration capacity; In the short and medium term, it is recommended to pay attention to the supply of Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) , Brightgene Bio-Medical Technology Co.Ltd(688166) , viabio (Langhua pharmaceutical) and other companies approved in this authorization.
Risk tips
Production safety accidents and quality risks; Exchange rate fluctuation risk; Order delivery volatility risk; Risk of changes in pharmaceutical regulatory policies.
