The new year is approaching, and the epidemic is not stopping. Recently, the Health Commission said that China is facing the dual challenge of the import of delta and Omicron strains. With the beginning of the Spring Festival transportation, the flow and gathering of people have increased significantly, and the situation of epidemic prevention and control is grim.
The stock market is bustling. On January 21, covid-19 drug concept opened fire, and the shares of Brightgene Bio-Medical Technology Co.Ltd(688166) (688166, SH) and Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) (600196, SH) both rose by the limit.
This is related to the agreement reached between the drug patent pool organization and MSD the day before. According to the agreement, 27 generic drug manufacturing companies can produce the API or finished product of methadone covid-19 oral drug without paying patent licensing fee. The two Chinese pharmaceutical companies whose share prices rose sharply were shortlisted for the agreement
Image Source: photographed by reporter Xu Libo (information picture)
This is not the first explosion of the covid-19 concept. Since the full outbreak of covid-19 epidemic in 2020, the lottery in the A-share market has changed several times. From protective masks to vaccines to specific drugs, the heat wave in the capital market has never stopped, but looking back at the “waist cutting” of vaccine stocks and the “rise” of specific drugs, the aura of the concept is always infinitely amplified, but the market demand and capacity supply may become a blind spot for investors to catch up with the tuyere
covid-19 special medicine takes over
The vaccination of covid-19 vaccine has built the first line of defense for epidemic prevention and control. However, the emergence of variant strains such as Omicron makes the global epidemic fluctuate and spread again.
Feng Hui, chief operating officer of Shanghai Junshi Biosciences Co.Ltd(688180) previously told the daily economic news that virus mutation can lead to breakthrough infection, and the protection rate of vaccines and neutralizing antibodies will decline. According to different treatment and prevention needs, it is necessary to build a multi-level prevention and control system covering vaccines, oral antiviral drugs and neutralizing antibodies to better fight covid-19 virus.
Capital Securities pointed out that the existing antiviral drugs for covid-19 virus under research mainly include neutralizing antibody drugs and small molecule drugs. They mainly focus on three technical routes: inhibiting virus replication, blocking virus entry into cells and regulating human immune system. Clinical trials at home and abroad are making orderly progress.
Route 1 is the route of inhibiting virus replication. Its main targets are virus replicase and protease. Its action target is host cells, which is generally small molecule drugs. According to incomplete statistics by the reporter, at present, the enterprises that layout covid-19 oral small molecule drugs in China mainly include real biology, pioneering pharmaceutical industry, pioneer pharmaceutical industry, Shanghai Junshi Biosciences Co.Ltd(688180) etc.
The real organism azvudine is currently conducting phase III clinical trials in China, Brazil and Russia. At the end of November 2021, it was publicly reported that 242 patients had been enrolled in Chinese clinical trials, and it was said that it would strive for conditional listing in December, but no new progress had been announced until the deadline.
In addition to azvudine, prochloramide, another fast developing pharmaceutical industry, encountered setbacks in phase III clinical trials. On December 27, 2021, Kaifa pharmaceutical announced the interim analysis results of phase III global multicenter clinical trial of prochloramide in the treatment of mild and moderate covid-19 patients, and said that due to the small number of events, the clinical trial did not reach statistical significance. Although the interim results are not ideal, from the relevant situation of the company’s announcement and management teleconference, Kaifa pharmaceutical is still optimistic about the prospect of prochloramide and said it plans to adjust the clinical trial scheme.
Shanghai Junshi Biosciences Co.Ltd(688180) on December 31, 2021, it was announced that the Ministry of health of Uzbekistan had approved the emergency use authorization of its oral nucleoside anti covid-19 virus drug vv116, which became another covid-19 oral drug approved for marketing in the world after Merck and Pfizer covid-19 oral drugs. At present, vv116 is undergoing clinical research in China.
In addition, sim0417, a candidate drug for 3CL protease inhibitor of Xiansheng pharmaceutical, is currently in the preclinical research stage. Due to the high conservation of 3CL protease, sim0417 is said to inhibit a variety of covid-19 variants.
Route 2 is to block the entry of virus into cells. The main principle is to block the entry of virus into cells by blocking the binding of virus S protein with the key receptor that mediates the entry of virus into human cells. The action target is the S protein on the surface of virus particles or the receptor of host cell membrane, generally neutralizing antibody macromolecules and polypeptide drugs.
The combination therapy of temasebo ambacizumab / romisvir mAb and Shanghai Junshi Biosciences Co.Ltd(688180) / Lilly js016 covid-19 neutralizing antibody are representative varieties of this technical route. They have obtained emergency use authorization (EUA) in China and the United States respectively.
As the first approved covid-19 neutralizing antibody drug in China, tengshengbo drug ambacizumab / romistuzumab combination therapy has high hopes, and its effectiveness against Omicron mutant has also attracted much attention. On December 21, 2021, tengshengbo medicine further disclosed at its online media conference that in the combination therapy of ambacizumab / romistumab, the activity of ambacizumab against Omicron mutant decreased, but it still had a certain inhibitory effect. Under the condition of high concentration, it can inhibit more than 90% of the virus; However, there was no change in the activity of romistuzumab against Omicron mutant.
Route 3 is to regulate the human immune system, which is generally used for anti-inflammatory treatment of severe patients. The main principle is to inhibit the cytokine storm caused by covid-19 virus over activating the immune system. Bdb-001, a typical representative such as Staidson(Beijing) Biopharmaceuticals Co.Ltd(300204) , is a monoclonal antibody drug against human C5a molecule, which can inhibit the further development of inflammation and does not inhibit immune function. At present, it is undergoing a global multi center phase II / III clinical trial. In addition, Shanghai Junshi Biosciences Co.Ltd(688180) js026 injection has been approved for clinical use. It is a recombinant human monoclonal antibody with broad-spectrum anti covid-19 virus ability and can cover a variety of mutant strains such as delta.
Insiders told reporters that covid-19 vaccine and covid-19 therapeutic drugs do not have a relationship of change. Vaccines, neutralizing antibodies and small molecule drugs have their own advantages in different stages of epidemic prevention and control. Today, when the vaccination rate tends to be saturated, covid-19 special drug takes advantage of the situation. In the future, the combination of covid-19 vaccine and specific drugs is expected to become an ideal solution against covid-19
raw material manufacturers are crazy
Last November, the U.S. Food and Drug Administration (FDA) successively approved the emergency use of two covid-19 oral drugs, paxlovid of Pfizer and molnupiravir of MSD, which are used to treat mild to moderate covid-19 pneumonia.
Southwest Securities Co.Ltd(600369) it is predicted that the global oral covid-19 drug market will be billions to tens of billions of dollars. Covid-19 oral medicine has become another super outlet under the covid-19 epidemic. Chinese covid-19 oral medicine related API and intermediate manufacturers have also become the target of market pursuit.
It is understood that covid-19 drug paxlovid is a compound preparation of 3CL protease inhibitor pf-07321332 and low-dose ritonavir. On January 3, geley pharmaceutical-b (01672, HK), a Hong Kong listed company, announced that it would expand the production capacity of ritonavir oral tablets to 100 million tablets / year. Affected by this news, the share price of Geli pharmaceutical once rose sharply, and the 3 daily closed at HK $4.35 / share, up 32.22%; From January 17 to 19, with the continuous activity of funds, the share price of Geli pharmaceutical continued to rise, with a cumulative increase of 62% in the four trading days.
In addition to gelly pharmaceuticals, similar to Xinxiang Tuoxin Pharmaceutical Co.Ltd(301089) (301089, SZ) which was mistakenly believed to be the uridine supplier of molnupiravir, a melsadon covid-19 drug, Jinghua Pharmaceutical Group Co.Ltd(002349) (002349, SZ) was injected into the market with expectations related to Pfizer’s “covid-19 drug” formula because its subsidiary senxuan Pharmaceutical (830946, BJ) can produce and sell ritonavir series of pharmaceutical intermediates, Or the main cause of its recent stock price changes.
Investors’ speculation that senxuan pharmaceutical may be a supplier of Pfizer specific drugs is not groundless, The Board Secretary of Jinghua Pharmaceutical Group Co.Ltd(002349) once said when answering investors’ questions on February 6, 2020: “the annual production capacity of the main intermediate of senxuan pharmaceutical ritonavir, a subsidiary of the company, is about 30 tons. According to the preliminary investigation and statistics of senxuan pharmaceutical, at present, the market share of this kind of intermediate is about 70%, ranking first in the same industry in China.”
However, senxuan pharmaceutical urgently clarified its association with Pfizer covid-19 on December 30, 2021: at present, the company has not signed a purchase and sales contract related to ritonavir pharmaceutical intermediates with Pfizer and has not supplied ritonavir series intermediates , The company’s sales of ritonavir series intermediates are mainly used in the synthesis of anti HIV drug ritonavir.
In fact, according to the data disclosed by senxuan pharmaceutical, it expects the sales volume of ritonavir pharmaceutical intermediates to be 11 tons in 2021, realizing a sales revenue of 16.84 million yuan, with a year-on-year decrease of about 33% and 32% respectively. Instead of achieving sales growth with the approval of Pfizer covid-19, it also experienced a sharp decline.
Despite repeated clarifications, senxuan medicine and Jinghua Pharmaceutical Group Co.Ltd(002349) are still hot in the capital market. In the past 20 trading days, the share price of the former rose nearly 300%, while the latter gained 13 limit sectors.
Similarly, due to the production of relevant intermediate carbonic anhydride, Aba Chemicals Corporation(300261) (300261, SZ) share price has soared more than three times in the last 20 trading days, and has been suspended twice due to serious abnormal fluctuations in the company’s stock trading.
In addition, Aba Chemicals Corporation(300261) also announced on January 6 that as of the disclosure date of the announcement, the company had not signed any cooperation agreement with Pfizer, had no cooperative relationship with Pfizer, and did not supply carlon anhydride and its derivatives to Pfizer. The customers of the company’s carbonic anhydride and its derivatives are mainly Chinese customers and Indian customers, it is uncertain whether the company’s carbonic anhydride and its derivatives are indirectly supplied to Pfizer . The sales revenue of carbonic anhydride and its derivatives in this year accounts for about 0.5% ~ 2% of the company’s total operating revenue in this year, accounting for a relatively small proportion, which will not have a significant impact on the company’s performance. The company is not the only manufacturer in China that has the synthesis process of carbonic anhydride and its derivatives.
Phichem Corporation(300398) (300398, SZ), another important intermediate for the production of Pfizer covid-19 oral medicine, Phichem Corporation(300398) also aroused the imagination of investors. Recently, on the interactive platform, Phichem Corporation(300398) said that whether the company’s pharmaceutical intermediates are useful in the API factories of Pfizer and other companies, and whether they are useful in their covid-19 oral medicine, belongs to the business information of customers.
Fujian Cosunter Pharmaceutical Co.Ltd(300436) (300436, SZ) also announced on December 24, 2021 that it had signed a cooperative development contract with Wuxi Apptec Co.Ltd(603259) to jointly develop covid-19 oral drug based on 3CL protease inhibitor. After the company’s share price rose for two consecutive trading days, Fujian Cosunter Pharmaceutical Co.Ltd(300436) received the attention letter from Shenzhen Stock Exchange. When replying to the attention letter, Fujian Cosunter Pharmaceutical Co.Ltd(300436) said that the above project was still in the stage of preclinical research and had obtained the pre selected preclinical candidate compounds.
The reporter also found that in addition to the stocks that have changed, some enthusiastic investors have also asked about pharmaceutical companies that may have related businesses on the investor exchange platform, trying to tap the potential suppliers of Pfizer covid-19 drugs, but at present, no enterprise has clearly indicated to supply Pfizer paxlovid with API
is the era of vaccines over
The fund’s pursuit of covid-19 specific drugs and even raw material manufacturers stems from the performance that may detonate in the future. This has been fulfilled by previous vaccine companies.
2021 is a year when China’s covid-19 vaccine enters the market on a large scale – on the last day of 2020, the inactivated vaccine of Sinopharm China biology was officially approved as the first domestic covid-19 vaccine. On March 29, 2021, the National Health Commission issued the covid-19 vaccination technical guide (First Edition), and China entered the era of universal vaccination. As of press time, seven covid-19 vaccines have been launched in China, covering three technical routes: inactivation, adenovirus vector and recombinant protein.
Various covid-19 vaccines not only supported the first line of defense against epidemic diseases in China, but also supported the performance of listed companies.
According to the 2021 semi annual report of China biopharmaceutical (01177, HK), the company’s profit attributable to the holders of the parent company in the first half of the year was 8.48 billion yuan, a year-on-year increase of 583.6%. Among them, associates and joint ventures including Beijing Kexing Zhongwei contributed about 7.585 billion yuan in profits.
After covid-19 vaccine keweisha was listed, it turned loss into profit in Cansino Biologics Inc(688185) 2021. The revenue in the first three quarters was 3.085 billion yuan, a year-on-year increase of 54286.51%, and the net profit attributable to the shareholders of the listed company was about 1.334 billion yuan. At present, keweisha has submitted an application for emergency use of adenovirus vector covid-19 vaccine for inhalation, and announced that it has reached a partnership with aerogen for drug delivery technology development and commercial supply in December 2021.
Chongqing Zhifei Biological Products Co.Ltd(300122) (300122, SZ) realized a net profit attributable to shareholders of listed companies of 8.404 billion yuan in the first three quarters of 2021, with a year-on-year increase of 239.05%. Among them, the net profit in the third quarter was 2.913 billion yuan, a year-on-year increase of 199.06%; Shenzhen Kangtai Biological Products Co.Ltd(300601) in the first three quarters of 2021, the net profit was 1.036 billion yuan, a year-on-year increase of 139.13%. Among them, the net profit in the third quarter of 2021 was about 700 million yuan, a year-on-year increase of 303.21%, and the profit of covid-19 vaccine increased significantly after it was listed.
Although Sinopharm group’s vaccine R & D China Biotechnology Co., Ltd. (hereinafter referred to as Sinopharm) has not been listed, the share price of Beijing Tiantan Biological Products Corporation Limited(600161) (600161, SH), the holding subsidiary of Sinopharm, soared to a stage high of 46.30 yuan / share because it was speculated by investors as a potential producer of gene protein recombinant vaccine.
At the same time, the R & D of covid-19 vaccine in other technical routes (attenuated influenza virus vector and nucleic acid vaccine) has also been accelerated. According to incomplete statistics by the reporter of the daily economic news, as of January 18, there were more than 10 vaccine companies in A-share listed companies, and covid-19 vaccine was under research
China’s covid-19 vaccine has been on the market and under research. Image source: Southwest Securities Co.Ltd(600369)
On the mRNA route, the mRNA vaccines of Shanghai Fosun Pharmaceutical (Group) Co.Ltd(600196) (600196, SH) and biontech have been approved by Hong Kong and Macao, and 10 million doses were provided to Taiwan in July 2021; The mRNA vaccine jointly developed by Sri Lanka microorganism and Tibet Rhodiola Pharmaceutical Holding Company(600211) (600211, SH) was approved for clinical use in January 2021, and the financing of Sri Lanka microorganism has been accelerating; The international multicenter phase III clinical trial of mRNA covid-19 vaccine jointly developed by Walvax Biotechnology Co.Ltd(300142) (300142, SZ) and Aibo biology is also continuing.
On the recombinant protein route, on November 12, 2021, Sinocelltech Group Limited(688520) announced that the application for clinical trial of the product under research of the holding subsidiary recombinant covid-19 virus alpha + beta mutant s trimer protein vaccine was approved. Beijing Wantai Biological Pharmacy Enterprise Co.Ltd(603392) (603392. SH) the nasal spray covid-19 vaccine developed in cooperation with Xiamen University and Hong Kong University has obtained the phase III clinical trial approval issued by the drug regulatory department of South Africa.
However, many vaccine companies withdrew from the competition or officially announced the undisclosed progress of R & D. For example, in February 2021, the chimpanzee adenovirus vector covid-19 vaccine jointly developed by Chengdu Kanghua Biological Products Co.Ltd(300841) (300841, SZ) and academician Gough team announced the research results. However, in the announcement at the end of April 2021, Chengdu Kanghua Biological Products Co.Ltd(300841) only indicated that the contents of the announcement would prevail for investors’ questions about the vaccine, and did not reply to the event thereafter.
In June and July 2021, Chengdu Olymvax Biopharmaceuticals Inc(688319) (688319, SH) and Hualan Biological Engineering Inc(002007) (002007, SZ) also successively disclosed the research and development progress of covid-19 vaccine participated by the company. The former is ready to enter the animal test, and the latter has been approved for clinical use, but the progress has not been further disclosed since then.
It is worth mentioning that in June 2021, the prospectus of Changchun Bcht Biotechnology Co(688276) (688276, SH) showed that it would develop nasal spray covid-19 vaccine and planned to sign a cooperation agreement with Si Anxin on relevant technologies. However, at the end of September 2021, Changchun Bcht Biotechnology Co(688276) announced the termination of the related party transaction. Since then, the company’s share price has plunged rapidly, and the lowest price is less than half of the highest price on the first day of listing.
From the stock price performance of A-share vaccine listed companies, the sharp rise and fall of the stock prices of the above vaccine companies are closely related to the cycle of covid-19 vaccine. Among them, Cansino Biologics Inc(688185) , Shenzhen Kangtai Biological Products Co.Ltd(300601) , Chongqing Zhifei Biological Products Co.Ltd(300122) shares rose after covid-19 vaccine was approved, and adjusted with the fluctuation of epidemic situation, the third vaccination and other factors; The share prices of Hualan Biological Engineering Inc(002007) , Chengdu Kanghua Biological Products Co.Ltd(300841) , Chengdu Olymvax Biopharmaceuticals Inc(688319) and other companies were depressed in 2021.
In terms of investment, Jiang Guangce, an investment veteran in the pharmaceutical field and founder of Dechuan investment, believes that “in 2 022, we should avoid the heavy positions of pharmaceutical funds since 2019, especially the CXO (Pharmaceutical outsourcing) sector. At the same time, we should pay attention to the relevant opportunities in the field of IVD (in vitro diagnostic products) and vaccine “; Duan Yongping, a well-known investment leader, also said that he copied the bottom of the vaccine giant by selling put options
cold thinking under the explosion of epidemic concept
According to the data of the National Health Commission, as of January 17, all localities had reported 2.942 billion doses of covid-19 virus vaccine.
At present, China is stepping up vaccination for people over the age of 18 who have been vaccinated for the second dose of covid-19 vaccine for six months, which is opening a new round of demand tide. According to the results of the seventh national census, China’s population over the age of 15 is about 1158 million. In general, the age range of booster vaccination abroad is larger. Taking the complete immunization as the standard, the total demand for covid-19 vaccine in China is about 3.474 billion doses, and 532 million doses are still to be met.
According to the Southwest Securities Co.Ltd(600369) Research Report, covid-19 vaccines of 15 companies around the world have been approved for emergency use or marketing. In terms of production capacity, in 2021, the production capacity of biontech will be 3 billion doses, Moderna will be 800 ~ 1 billion doses, AstraZeneca will be 3 billion doses, Sinopharm Beisheng Institute is expected to reach 5 billion doses, Kexing will be about 2 billion doses, Cansino Biologics Inc(688185) will have 500 million doses, and Chongqing Zhifei Biological Products Co.Ltd(300122) , Shenzhen Kangtai Biological Products Co.Ltd(300601) will have 200 ~ 300 million doses.
On July 13, 2021, United Nations Secretary General Guterres said that in order to achieve global mass immunization and stop the covid-19 epidemic, 11 billion doses of vaccine were needed for people in 70% of the world.
Based on the data, Tao Lina, a Chinese vaccine researcher, told reporters that the current global production capacity of covid-19 vaccine should be sufficient, but the distribution is not uniform. The vaccination rate in many developing countries or backward countries is still not high. This situation still needs to be changed through the coordination of the World Health organization and the cooperation of various countries.
From the perspective of China’s covid-19 vaccine market demand, there is no doubt that the third booster injection has been given, but there are different voices in the industry on whether to give the fourth injection. The possibility of fixed frequency vaccination like influenza vaccination cannot be completely ruled out. In the case of uncertain market demand, the follow-up vaccine needs to make a breakthrough in the technical route in order to occupy a place in the market.
Tao Lina believes that attenuated (influenza virus vector vaccine) has potential safety hazards, and the effect can be met but not sought. At present, the most mainstream new technology vaccines may be recombinant protein vaccine and mRNA vaccine, but there are relatively many adverse reactions of mRNA vaccine.
Previously, He Shan, director of Senrui investment research, told the daily economic news that the global epidemic is improving marginally, and the vaccine is difficult to do in the short term. On the contrary, the old white horse stocks that are impacted by the epidemic or policies and suffer from oversold will have a greater chance next year. Under the current epidemic changes, He Shan believes that this expectation is still valid. In addition to covid-19 vaccine products, other vaccine products are also competitive companies with more investment value.
“Now the vaccine can’t prevent Delta and Omicron, and the booster needle is mainly provided free of charge by vaccine enterprises, so the enthusiasm of investors is not high.” He Shan said.
For the COVID-19 specific drugs and raw materials traders who have been authorized by the news of the authorization of Mercedes orally, there are investors who told reporters that the majority of bubbles are expected and that there will be adjustments later. “It is more stimulated by short-term news. The roller coaster trend of rising and falling may be repeated in the covid-19 drug sector.”
Based on the medical profession, Tao Lina said that the research and development of covid-19 drugs is more difficult than vaccines. “Why can the vaccine succeed? It mainly depends on our body’s immune system. But the principle of covid-19 drug (oral medication) is to block the metabolic process of the virus, which is actually very difficult.” Tao Lina said, if covid-19 virus mutates, the possibility of drug failure is greater , the effect of new use of old drugs is difficult to ensure, and the safety of newly developed new drugs is difficult to ensure. In addition, the current use node of covid-19 drugs is not easy to handle.
From the market perspective, Tao Lina said that only a small number of people really use drugs, and the corresponding market scale is relatively small . Although the price of neutralizing antibody drugs is high, the dosage is smaller, and there will be virus variation, resulting in poor effect.
