Key investment points
The prospect of overseas epidemic prevention drugs is good, and paxlovid is better
1) the epidemic has spawned a number of potentially 10 billion dollar heavy varieties. Since the outbreak of covid-19 in 2020, the research and development of vaccines, neutralizing antibody drugs and small molecule therapeutic drugs has been in full swing, and many heavy vaccines and drugs have been born, such as mRNA vaccine of biontech and Moderna, inactivated vaccine of Kexing biology, redcivir, etc. 2) We expect that small molecule specific drugs will be sold in large quantities in 2022. There are three kinds of small molecule therapeutic drugs approved in Europe and America, including redcivir, molnupiravir and paxlovid. Methadone and Pfizer's covid-19 small molecule therapeutic drugs are expected to start in 2022, with sales of US $5-7 billion and US $60 billion respectively. 3) Paxlovid is more effective, and the recognition of oral drugs is expected to continue to improve. From the data comparison, paxlovid has more advantages in efficacy (reducing the risk of hospitalization / death of non hospitalized patients by 89%). The latest redcivir can reduce the risk of hospitalization / death of non hospitalized patients by 87%, which is comparable to paxlovid. However, small molecule oral drugs are more convenient to use, and the recognition is expected to continue to improve.
The Chinese market is more impressive, and attention is paid to enterprises that may break through
We believe that the normalization of global epidemic prevention and control is expected to become a trend. Considering that the treatment scheme is independent and controllable, China's treatment scheme deserves attention. Based on this, we think we need to pay special attention to the combination of covid-19 specific drugs in China.
1) many local small molecule oral drugs have entered the middle and late stage of clinical practice. China has made rapid progress, including the real biological azvudine (moderate and severe, overseas phase III), the development of pharmaceutical industry prochloramide (severe phase III failure, mild and moderate disease phase III), Yuanda pharmaceutical histone inhibitor stc3141 injection (European severe IIA), and Frontier Biotechnologies Inc(688221) peptide like fb2001 (injection, moderate and severe phase I in the United States).
2) derivatization of listed covid-19 therapeutic drugs is the mainstream research and development direction. China's research and development direction for covid-19 treatment of small molecule drugs is mainly based on the clinically proven effective covid-19 treatment drugs (mainly redcivir, molnupiravir and nirmatrelvir), so as to further improve the antiviral activity, bioavailability and other properties, in order to improve its clinical effect in the treatment of covid-19 infected patients.
3) the direction of oral derivatives of redcivir deserves attention and Shanghai Junshi Biosciences Co.Ltd(688180) is the leading. Shanghai Junshi Biosciences Co.Ltd(688180) vv116 is optimized according to the structure of maternal nucleoside metabolized by redcivir in human body. It prolongs the metabolic time in vivo and enhances the curative effect through the isotope effect brought by deuterization. At the same time, multiple hydroxyl groups are added to improve the water solubility of the drug, so as to improve the oral bioavailability. It is expected to obtain a better clinical therapeutic effect than redcivir. 4) Since the efficacy of nirmatrelvir has been verified, the development of its derivatives is the most popular. Focus on Fujian Cosunter Pharmaceutical Co.Ltd(300436) , Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317) in the preclinical research stage.
Traditional Chinese medicine epidemic prevention "three parties and three drugs", policy support + continuous verification of curative effect
During the covid-19 epidemic in China, traditional Chinese medicine played a great therapeutic role in the treatment of infected patients. The "three parties and three drugs" were widely used and continued to receive encouraging support. On January 19, 2022, China also submitted a research report on the treatment of covid-19 pneumonia with traditional Chinese medicine to the who, explaining the role of traditional Chinese medicine in the diagnosis and treatment of covid-19. We expect that with more and more medical evidence showing the efficacy of traditional Chinese medicine in the treatment of covid-19, it is expected to be popularized to a wider range of applications, and its potential investment opportunities in traditional Chinese medicine are worthy of attention
Investment advice
Considering the effectiveness of derivatives of nirmatrelvir, the active ingredient of paxlovid, and the clinical effectiveness of oral derivatives of redcivir are effectively supported by clinical data, we believe that we can focus on relevant derivative R & D enterprises and follow-up progress in the future.
Recommended concerns:
RdRp inhibitor: Shanghai Junshi Biosciences Co.Ltd(688180) , Geli pharmaceutical;
3CL inhibitors: Frontier Biotechnologies Inc(688221) , Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317) , Fujian Cosunter Pharmaceutical Co.Ltd(300436) , Yunding Xinyao, Xiansheng pharmaceutical and Geli pharmaceutical, etc.
Traditional Chinese medicine: Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) , Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) , Jiangsu Kanion Pharmaceutical Co.Ltd(600557) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Beijing Tongrentang Co.Ltd(600085) , China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) etc.
Risk tips
Risk of R & D failure, competitive risk, risk of sales falling short of expectations, risk of significant deviation between preclinical data and clinical data
