echemi logo
Product
  • Product
  • Supplier
  • Inquiry
    Home > Medical News > Latest Medical News > A big test of Huiyu Pharmaceuticals: It was questioned all the way to officially land on the Sci-tech Innovation Board and enter the capital market

    A big test of Huiyu Pharmaceuticals: It was questioned all the way to officially land on the Sci-tech Innovation Board and enter the capital market

    • Last Update: 2021-11-16
    • Source: Internet
    • Author: User
    Search more information of high quality chemicals, good prices and reliable suppliers, visit www.echemi.com

    TextSlowly

    Today (October 26), Huiyu Pharmaceutical's Science and Technology Innovation Board was officially listed, which is considered to have confirmed its title of "the first stock to benefit from volume purchases"


    On the first day of listing, Huiyu Pharmaceutical’s opening price was reported at 41 yuan/share.


    Source: Eastern Fortune

    According to the previous disclosure of the prospectus, the stock issuance price is 38.


    However, Huiyu Pharmaceuticals has been plagued by suspicions-if its core product, pemetrexed disodium for injection, has been procured in volume, how can the company sustain its profitability? Is the R&D successor weak? And many issues such as the imbalance in the proportion of sales expenses have been widely criticized


    01 "The first share to benefit from volume purchases"

    01 "The first share to benefit from volume purchases"

    As the country vigorously carried out mass procurement, a policy east wind was blowing to Huiyu Pharmaceutical


    Public information shows that Huiyu Pharmaceutical was established in 2010 and is mainly engaged in the research and development, production and sales of anti-tumor and injection drugs


    In 2018, the "4+7" urban volume procurement pilot program was launched, and this dilemma has taken a turn for the better


    The document "Centralized Procurement of Medicines in 4+7 Cities" was released on November 15, 2018.


    At this time, Huiyu Pharmaceutical seized the opportunity


    Pemetrexed disodium for injection, the core product of Huiyu Pharmaceuticals, passed the consistency evaluation in China in 2017.


    In the "4+7" urban volume procurement pilot, the original researcher Eli Lilly's Pemetrexed disodium for injection failed the bid due to a relatively low drop


    The winning bid of the national centralized procurement has become an excellent opportunity for Huiyu Pharmaceutical to open up the domestic market


    According to the prospectus, from 2017 to 2020, Huiyu Pharmaceutical's revenue will be 14 million yuan, 54 million yuan, 707 million yuan, and 1.


    In the past few years, revenue has doubled several times, and the "barefoot" Huiyu Pharmaceutical has achieved curve overtaking


    At the same time, the title of "the first unit to benefit from volume purchases" has been confirmed


    02 Entering the capital market to sprint the Sci-tech Innovation Board, but it has been questioned

    02 Entering the capital market to sprint the Sci-tech Innovation Board, but it has been questioned

    The rapidly developing Huiyu Pharmaceutical has also begun the pace of listing on the Science and Technology Innovation Board


    On December 2, 2020, Huiyu Pharmaceutical's application for listing on the Sci-tech Innovation Board was accepted; on May 26, 2021, the Listing Committee approved it; the registration took effect on August 3, 2021, and it was officially listed on the Sci-Tech Innovation Board today
    .

    However, the path for Huiyu Pharmaceuticals to land in the capital market was not as smooth as imagined.
    Instead, it was plagued by many doubts and the disturbances continued
    .

    In the past, the second largest shareholder was sentenced for quarrels and fights.
    Later, the prospectus disclosed that academic promotion fees of nearly 1 billion were subject to key inquiries by the Listing Committee, which repeatedly became a slot
    .

    However, the different rights of the actual controller in the same shares have also caused many controversies
    .
    The prospectus shows that of the 114 million shares held by the company’s actual controller Ding Zhao, 80.
    47 million are special voting shares and 33.
    6 million are ordinary shares; the remaining shareholders are all ordinary shares
    .
    When the shareholders' general meeting deliberated and voted, the number of voting rights for special voting shares was 5 votes, and the number of voting rights for ordinary shares was 1 vote
    .
    This means that under this shareholding structure, Ding Zhao has absolute control over the operation and management of Huiyu Pharmaceutical and the voting on resolutions
    .

    At the same time, the outside world also has doubts about the rationality of Huiyu Pharmaceutical's fundraising project
    .

    The purpose of fund-raising shows that Huiyu Pharmaceuticals intends to raise 1.
    907 billion yuan in this IPO, of which 677 million yuan will be used for the Huiyu EU Standard Injection Industrialization Base (Phase II) project, 428 million yuan will be used for the construction project of the Institute of Innovative Drugs, 800 million yuan will be used to supplement working capital
    .
    Among them, the construction of the Institute of Innovative Drugs mainly includes the construction and decoration of the research and development building, and the research and development equipment costs
    .

    However, according to the information disclosed in the prospectus, the two production workshops of Huiyu Pharmaceutical are far from being saturated, which has caused people to worry about overcapacity in their projects
    .
    At the same time, in its fund-raising purposes, there is no mention of arrangements for R&D investment
    .

    Such as all sorts of things, aroused many questions and discussions
    .

    03 How long can the income generation of centralized procurement continue to intensify?

    03 How long can the income generation of centralized procurement continue to intensify?

    In fact, what is even more worrying is the sustainability of Huiyu Pharmaceutical's future performance
    .

    Due to the particularity of the volume procurement system, it is clarified that only original research drugs and generic drugs that have passed the consistency evaluation can participate in volume procurement.
    This system has played a certain role in promoting the market sales of generic drugs that have passed the consistency evaluation.

    .
    And Huiyu Pharmaceutical has indeed received a tangible dividend
    .

    As the only pharmaceutical company that passed the consistency evaluation of pemetrexed disodium for injection, Huiyu Pharmaceuticals exclusively won the bid for the “4+7” pilot cities for mass procurement in 2018, and cooperated with the original drug manufacturer Eli Lilly in September 2019.
    Jointly won the bid for procurement in 25 provinces in the alliance area
    .

    In the end, Huiyu Pharmaceutical completed market coverage through volume procurement
    .

    Today, pharmaceutical companies have become more aware of the impact of centralized procurement on market share, and have accelerated the pace of consistency evaluation of generic drugs
    .

    At present, there are 9 domestic companies that originally developed pemetrexed disodium for injection and passed the consistency evaluation
    .
    In addition to the original research manufacturers Eli Lilly and Huiyu Pharmaceuticals, which have already been reviewed, in 2020, Hausen Pharmaceuticals, Yangtze River Pharmaceuticals, and Qilu Pharmaceuticals will enter the market; in 2021, Osaikon, Fresenius Kabi Pharmaceuticals, Simcere TECO Pharmaceuticals Industry followed closely, and successively reviewed
    .

    Source: Prospectus

    There is no doubt that Huiyu Pharmaceuticals will face intensified market competition after the central procurement period of pemetrexed disodium for injection expires in 2021
    .

    In addition, Huiyu's pharmaceutical product line is relatively concentrated, and the sales of pemetrexed disodium for injection accounted for an excessive proportion of its total operating income
    .
    According to the prospectus, during the reporting period, in addition to pemetrexed disodium for injection, Huiyu Pharmaceutical’s domestic registered sales of docetaxel injection and azacitidine for injection accounted for a small proportion of revenue.
    Liplatin injection, bendamustine hydrochloride for injection, paclitaxel injection and other products have not yet realized revenue
    .
    In other words, Huiyu Pharmaceutical currently has no product that can replace pemetrexed disodium for injection
    .

    Under this circumstance, when the quantity purchase expires, if the bid is dropped when the contract is renewed, it will inevitably have an impact on its market share
    .
    How to ensure its market share is imminent .

    Moreover, as more and more competitors enter the game, the gradual price reduction of generic drugs has become a trend.
    Even if Huiyu Pharmaceutical's pemetrexed disodium continues to bid, it will face greater price reduction pressure in the later period
    .
    For example, in the first batch of centralized procurement tenders in Hubei Province at the beginning of 2021, the winning bid of pemetrexed disodium for injection was Qilu Pharmaceutical's 198 yuan/piece, which was 75.
    19% lower than the winning bid price of 798 yuan/piece in the Huiyu Pharmaceutical Union area
    .

    No matter where the game is missed, Huiyu Pharmaceutical's revenue generation seems to be greatly reduced as far as the current situation is concerned
    .

    04 From imitation cultivation to imitation innovation

    04 From imitation cultivation to imitation innovation

    Huiyu Pharmaceuticals is also well aware of the difficulties it faces, as can be seen from the risk warning column of its prospectus
    .

    Faced with many doubts, in the risk response column of the prospectus, Huiyu Pharmaceutical stated that it will continue to deepen the injection field based on its advantages in the consistency evaluation of injections
    .
    At the same time, it is gradually extending from high-end generic drugs to innovative drugs
    .

    Up to now, according to the prospectus, Huiyu Pharmaceuticals has a total of 87 research projects, including 32 raw materials and excipients projects, 42 generic drug preparation projects, and the research projects include 33 anti-tumor-related drugs and Class 1 new drug projects.
    10
    .

    On the whole, the products currently on the market by Huiyu Pharmaceuticals are all generic drugs
    .
    Because the product revenue structure is not rich enough, the performance performance is restricted by the development of a single product
    .

    In the field of anti-tumor complex injections and innovative drugs, the prospectus of Huiyu Pharmaceuticals disclosed that it will use self-research teams as the mainstay and cooperative introduction as a supplement to accelerate the comprehensive injection of complex injections, small-molecule innovative drugs and large-molecule innovative drugs.
    R&D
    .
    Build a rich pipeline of innovative drug products within 3-5 years, and form a research and development model that emphasizes both innovation and imitation
    .

    It is not surprising for Huiyu Pharmaceutical to follow the path of both imitation and innovation
    .
    On the one hand, it focuses on the evaluation of the consistency of injections and grasps the "basic plate" of the development of generic injections; on the other hand, it extends to innovative drugs, gradually forming a mature development system and occupying new market shares
    .

    At the same time, the internationalization process of Huiyu Pharmaceuticals has not fallen behind
    .
    The total number of product approvals independently approved and authorized overseas is more than 100.
    It is currently sold in many countries and regions, mainly the United Kingdom, and has sales channels in 87 countries and regions around the world
    .

    As for the future development of Huiyu Pharmaceuticals, will it be as expected? How about the renewal status of volume purchase? As well as the specific performance after the official entry into the capital market and the progress of large and small projects that require funds to promote, we can only wait and see
    .
    But for now, it still faces great challenges
    .

    Reference materials:

    The prospectus for the listing of Huiyu Pharmaceutical on Science and Technology Innovation Board, "Rely on volume procurement to take off, Huiyu Pharmaceutical sprints for IPO! Over-reviewed injections are its "ace""

    This article is an English version of an article which is originally in the Chinese language on echemi.com and is provided for information purposes only. This website makes no representation or warranty of any kind, either expressed or implied, as to the accuracy, completeness ownership or reliability of the article or any translations thereof. If you have any concerns or complaints relating to the article, please send an email, providing a detailed description of the concern or complaint, to service@echemi.com. A staff member will contact you within 5 working days. Once verified, infringing content will be removed immediately.

    Contact Us

    The source of this page with content of products and services is from Internet, which doesn't represent ECHEMI's opinion. If you have any queries, please write to service@echemi.com. It will be replied within 5 days.

    Moreover, if you find any instances of plagiarism from the page, please send email to service@echemi.com with relevant evidence.