Guojin Securities released a research report saying that global innovative drugs are an important field for realizing scientific and technological progress, and China's innovative drug industry chain is on the rise. With the full restoration of in-hospital diagnosis and treatment, the introduction of national incentives and support policies for innovative drugs one after another, and the pace of internationalization of Chinese pharmaceutical companies, the industry as a whole will usher in simultaneous improvements in performance and market performance. It is recommended to invest in two types of targets: 1) choose a racetrack, preferring domestic targets mapped by metabolic, neurological, and self-immune indications and cutting-edge innovators in overseas breakthroughs; 2) select leaders, which are optimistic about bottom-up and internationalization breakthroughs.
Recommended attention: Cinda Biotech (01801), Kangfang Biology (09926), Konoah (02162), Pharmacomics (02269), Shanghai Pharmaceutical (02607), etc.
The main views of Guojin Securities are as follows:
Currently, SORA is disrupting scientific imagination, innovative drugs have entered the top ten global market capitalization, and human society is in an unprecedented new era of singular changes and the emergence of new technologies.
The bank sorted out more than 200,000 clinical trials around the world, more than 3,000 listed pharmaceutical companies, major global drug products and their indications and targets in the past 15 years, and the situation and massive data of upstream CDMO (contract customized R&D and manufacturing enterprises) and downstream pharmaceutical businesses in the innovative drug industry chain, and came to three major conclusions: (1) Innovative drugs are being realized; (2) Innovative drugs are rising in China; (3) the pressure and opportunity of global innovative drugs coexist, and hot spots are emerging, which will be the standard for high-growth investment. The trip summarized the top 10 keywords and 4 hot tracks of innovative drugs worth paying attention to in the innovative drug industry chain in 2024, with a view to providing useful references for investors and industry companies.
2024, the year of change; global drug prices are under pressure, driven by innovation, mergers and acquisitions accelerate transformation; keywords: mergers and acquisitions, supervision, overseas, leading the way.
(1) In capital market history, leading pharmaceutical companies Eli Lilly and Novo Nordisk first entered the top 15 global market capitalization of software, chips, the Internet and energy, marking a landmark advance in the global innovative pharmaceutical industry. (2) Global drug prices all face pressure such as medical insurance payments and patent expiration; innovation drives performance, and in order to obtain effective innovation assets as quickly as possible, the world will enter a period of mergers and acquisitions. (3) China's innovative pharmaceutical industry has completed the first step of internationalization with national support and industrial upgrading; China's innovative biopharmaceuticals have entered the European and American markets, China's pharmaceutical production capacity has achieved an international layout, and enterprises and industry leaders that have successfully gone overseas are worthy of attention.
2024 is a year of continuous breakthroughs in innovative drugs; optimistic about the 4 major racetracks; keywords: obesity, dementia, self-immunity, and new molecules.
(1) Global pharmaceutical consumption was upgraded, and the weight loss circuit in the metabolic field was first broken through. Novo Nordisk's simeglutide surpassed 20 billion US dollars in annual sales in 6 years, and Eli Lilly's telpotide surpassed 5 billion US dollars in sales in its first full sales year. (2) The fields of autoimmunity, neurological diseases and other diseases are undergoing historic breakthroughs. Since the launch of Sanofi and regenerative dupliumab (IL-4, interleukin-4 monoclonal antibody), it has rapidly broken through the 10 billion US dollar sales peak with an average annual growth rate of 89.6% for 6 consecutive years. Eisai's luncanizumab was approved and Eli Lilly's donalizumab was submitted for listing, igniting new hopes for overcoming Alzheimer's disease and the accelerated development of neurological drugs by global pharmaceutical companies. (3) New molecules are emerging, and new drug tracks such as nucleic acid, ADC (antibody-conjugated drug), double antibody (bispecific antibody), and TCE (T-cell connector) are worth paying attention to. The pharmaceutical industry has experienced 4 waves of new technology (see text for details), and more innovative technologies and molecular forms have achieved breakthroughs; for example, Alnylam Pharmaceuticals' clinical promotion of the nucleic acid drug Zilebesiran under development may lead to 1.3 billion hypertensive patients around the world and ushered in a half-yearly dose of treatment. In 2024, the bank is optimistic about the advancement of global R&D and commercialization of the aforementioned innovative molecular types; in particular, the progress of RNAi (RNA interfering) drugs.
2024 is the year of the overall rise of the innovative drug sector; “water sellers” and “drug sellers” upstream and downstream of the industrial chain are worth paying attention to. Keywords: CDMO, channel.
(1) The bank believes that as sales of large single products such as simeglutide increase, demand for commercial production rises due to faster approval of new drugs, etc., and demand for generic drug research and development for major drugs whose patents are about to expire, global production capacity, especially biopharmaceuticals with higher production barriers, will become even more scarce. Therefore, in 2024, the growth of the biopharmaceutical CDMO circuit is particularly noteworthy. (2) Approval for marketing of innovative drugs in China and the world will maintain an upward trend. As a result, the demand for professional sales channels from innovative pharmaceutical companies will also increase. The bank is concerned about opportunities for companies such as Shanghai Pharmaceutical and Baiyang Pharmaceutical, which have channel advantages, in the midst of rising demand for drug sales.
Risk warning: risks such as exchange risks related to internationalization, risk of domestic and foreign policy fluctuations, risk of investment and financing cycle fluctuations, and risks of mergers and acquisitions not meeting expectations.