Baekje broke 16% on the first day, and WuXi AppTec and others suffered Waterloo!

On December 15, the domestic biotech giant BeiGene was officially listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange, becoming the world's first biotechnology company to be listed on the Nasdaq, Hong Kong Stock Exchange and Shanghai Stock Exchange
.
Although BeiGene also introduced a "green shoe" mechanism to stabilize the stock price in this issuance, the performance on the first day was obviously not as good as the industry's expectations: it fell 8.
12% at the opening and broke the price.
Since then, the stock price has continued to plunge, hitting the lowest level of 155.
02 yuan, falling nearly 20.
%, and finally closed at 160.
98 yuan, a sharp drop of 16.
42%, ranking first in the decline list of the Science and Technology Innovation Board
.
Perhaps affected by the first-day break of the launch on the Science and Technology Innovation Board, BeiGene today’s Hong Kong stocks and US stocks fell by 7.
64% and 1.
6%, respectively
.
It is worth noting that the biomedical sector has seen a general decline today: A-share Biomedical (Shenwan) has 224 stocks turning green.
Among them, WuXi AppTec dropped the limit late, Tigermed, Kyushu Pharmaceutical, Kanglong Chemical, Zhaoyan New Drug, Jiaying Pharmaceutical, Proton, and Calais also fell more than 5%; Hong Kong stocks also plunged collectively.
WuXi Biologics and WuXi AppTec both fell more than 19%, Rongchang Biologics fell more than 17%, Nuocheng Jianhua, GenScript and Junshi Biotech dropped by more than 10%, while Xinda Biotech and Clover Biotech also dropped by more than 9%
.
Many auras are difficult to bear the weight of valuation.
As a star enterprise of local pharmaceutical innovation, BeiGene has been equipped with multiple auras since its establishment in 2010: business genius Ou Leiqiang and scientific top performer Wang Xiaodong are the co-founders of the company, and then dig Come to Pfizer China "Godfather" Wu Xiaobin as president; "Seven years of grinding a sword" BTK small molecule inhibitor Zebutinib is China's first domestic research and development antibody approved for breakthrough therapy by the U.
S.
FDA and approved for marketing in the U.
S.
Cancer new drug; the issue price of 192.
6 yuan per share on the Sci-tech Innovation Board also makes it the third highest in the A-share market and the highest new stock on the Sci-Tech Innovation Board this year
.
In addition to the many auras mentioned above, some people believe that the reason why BeiGene has attracted the attention of the industry is because the company has adopted a brand-new biomedical enterprise business model, which is to attract global players including human resources, financial resources, and pharmaceutical pipelines.
Top allocation resources to achieve rapid development
.
However, this model requires a large amount of funds.
For example, in 2018, 2019, 2020, and January-September 2021, BeiGene's research and development expenses were 4.
597 billion yuan, 6.
588 billion yuan, 8.
943 billion yuan and 6.
52 billion yuan, respectively.
, Is second to none among local pharmaceutical companies
.
This also prompted BeiGene to seek multi-channel financing to solve the urgent need for funds
.
After listing on Nasdaq to raise US$182 million in 2016, BeiGene immediately landed on the Hong Kong Stock Exchange in 2018 to raise US$902 million
.
After landing on the Science and Technology Innovation Board, BeiGene expects to raise a total of approximately 22.
16 billion yuan before deducting underwriting fees and other estimated issuance costs (before the over-allotment option is fully exercised)
.
In this sci-tech innovation board issuance, BeiGene has introduced a "green shoe mechanism" for the consideration of "protecting the market" and granted CICC a 30-day over-allotment option, which can over-allot no more than 17.
26 million RMB shares , Which also allowed its stock price to stabilize a bit in the late trading
.
Regarding the phenomenon of breaking discoveries, some analysts pointed out that IPO breaking is more common in mature capital markets.
Under the registration system, IPO breaking of new shares listed on the Science and Technology Innovation Board and ChiNext reflects “market-based pricing” to a certain extent, especially After September of this year, new rules were implemented for IPO inquiry, which raised the issue price of new shares, which also exacerbated the break-up of new shares
.
The future also depends on the value of the R&D pipeline and commercialization capabilities.
Although the issue price is too high to cause the break of the issue, there are factors of new inquiries, but the deeper reason behind it lies in BeiGene's "high valuation" and "high market value
.
" As of now, BeiGene has a value of 28 billion US dollars on the US stock market and 229.
5 billion Hong Kong dollars on the Hong Kong stock market
.
BeiGene’s sci-tech innovation board issuance price is 192.
60 yuan/share, after the issuance, the total share capital is 1.
35 billion shares, which is converted into an issued market value of 260 billion yuan.
It is rare for pharmaceutical companies to enter the 100 billion club as soon as they are listed.

.
The industry generally believes that the value and future possibilities of BeiGene’s R&D pipeline are important pillars supporting its stock price trend.

.
As of now, BeiGene has 48 commercialized products and clinical-stage drug candidates, including 10 commercial-stage drugs, 2 declared drug candidates, and 36 clinical-stage drug candidates.
Domestic pharmaceutical companies are unmatched
.
Among them, BTK small molecule inhibitor zebutinib capsules, anti-PD-1 monoclonal antibody tislelizumab injection, and PARP inhibitor Pamipali capsules, three self-developed drugs have been marketed, including the first of its kind (First-in-class) 8 self-developed drug candidates, including potential HPK1 inhibitors, are in the clinical research stage, and 37 cooperative products are in the clinical or commercialization stage
.
In response to the bleak situation that broke on the first day of listing on the Science and Technology Innovation Board, BeiGene’s Chief Financial Officer Wang Aijun told the media that the stock price at a certain point is affected by many factors.
The company respects the law of the capital market and the future focuses on distribution.
Resources are matched with existing strategic priorities
.
"We are very optimistic that the company can bring reasonable returns to investors through the progress of business milestones
.
" Kaiyuan Securities believes that BeiGene, as a leading company in the global innovative drug industry, is expected to fully benefit from the three core self-developed products in the future And the continuous increase of the number of authorized products and the increase of domestic market share
.
Some market analysts also pointed out that BeiGene has a huge demand for funds and can only raise funds to support development through continuous financing.
In the future, it will depend on whether many of its research and development products can be approved for listing as expected to support profit growth
.
It is worth noting that recent news has announced that BeiGene has announced a major personnel appointment within BeiGene.
Yin Min, the former head of AstraZeneca’s China Oncology Division, will formally join BeiGene in January 2022 as the Greater China Region.
Chief Commercial Officer, and became a member of BeiGene's China leadership team and global executive committee
.
Prior to this, Du Haochen, the former national head of AstraZeneca's county business, had joined BeiGene as the head of the broad market
.
From the perspective of the industry, the continuous absorption of two generals from AstraZeneca is bound to inject new momentum into the commercialization capabilities of BeiGene's construction products
.
Innovative medicines are suddenly unfavorable in the periphery.
People in the industry joked that BeiGene has "brought down" the entire pharmaceutical sector on its own
.
Among them, WuXi AppTec suffered an "A+H" double kill, and the A-share market directly fell by its limit in late trading, and Hong Kong stocks closed down 19.
06%
.
With the exception of WuXi AppTec, the leading CROs such as Tigermed, Kanglong Chemical, Haoyuan Pharmaceutical, and Kyushu Pharmaceutical all fell more than 7%
.
But some people point out that all this is actually due to a piece of bad news from the external market
.
According to a report from the Financial Times on Tuesday local time, the U.
S.
Treasury Department has included eight Chinese companies on the investment blacklist, including DJI Innovations, the world's largest manufacturer of commercial drones
.
More importantly, according to people familiar with the matter, the US Department of Commerce is expected to include some Chinese companies on the entity list on Thursday, including some companies involved in biotechnology
.
Since the previous sanctions were targeted at high-tech manufacturing industries, and this time some biotech companies have been added, this bad news is the first time it has appeared, which has caused market panic
.
As the CXO sector has more foreign-related businesses, it will inevitably become the sector that bears the brunt of the decline
.
Regarding today’s plunge, WuXi AppTec’s Office of the Secretary of the Board of Directors stated in response to the media that the company’s current business conditions are all normal and would not comment on the rumors of US “sanctions”
.
The secretary of the board of directors of Haoyuan Pharmaceutical, a 9% sci-tech innovation board company, also said that the company is looking for the reason for the decline in stock price.
Now looking at the Internet that the United States is going to "sanction" WuXi AppTec, the company should be affected by this news
.
"We first need to verify the authenticity of the news, and then assess how much impact it will have on our company
.
If it does have a significant impact on performance, we may have to make an announcement at that time
.
" A person from the Kanglong Chemical Securities Department responded to the media saying, “The company has not received any notice.
The company’s overseas income accounts for 80% of the company’s income.
However, the company does not make any estimates on unfounded matters.

.
"In addition, a person from the Securities Department of Jiuzhou Pharmaceutical said to the media, "At present, the company is operating normally and has not received relevant news
.
Even with sanctions, the company's US business is basically doing pre-clinical projects, and the overall volume is small, which will not have a significant impact on profits
.
"The path of pharmaceutical innovation is ultimately to go international.
This is the mainstream consensus in the industry
.
Since the beginning of this year, a number of innovative drugs (new indications) developed or jointly developed by domestic pharmaceutical companies have submitted marketing applications in the United States, including the letter TatBio's Sintilizumab, Wanchun Pharmaceutical's Pranabrin, Efan Pharmaceutical's Ryzneuta, Junshi Biologics' Teriprizumab, and Kangfang Bio/China Biologics' Pianprizumab, etc.

At the same time, the license-out projects of local pharmaceutical companies have also begun to enter the blowout period.
The number of projects in the first half of this year reached 21, and the amount of single transactions has also repeatedly set records
.
The industry generally believes that 2022 will become China’s innovative drugs going overseas.
The crucial year, in the context of the global transformation of unprecedented changes in a century, not only has higher requirements for drug innovation, it is bound to test the ability of pharmaceutical companies to "go global"
.