Changes in Hengrui Medicine: "Honesty people" begin to liven up their minds

TextMars

Since hitting a record high on January 8 this year, the share price of Hengrui Pharmaceuticals, the "first brother of innovative drugs" in the A-share market, has fallen for three consecutive quarters, with a maximum drawdown of 54.

Behind the endless decline, different investors have made different choices

Faced with an unprecedented predicament, founder Sun Piaoyang came out again, and drastic reforms began

Capitalization of R&D investment: more than just making the financial report look good?

R&D is an important means for innovative pharmaceutical companies to continuously introduce new products to maintain market share, and it is also a killer for maintaining rapid growth

Endless R&D investment will undoubtedly weaken the company's current net profit, thereby raising the company's valuation

At present, the mainstream solution for global pharmaceutical companies is to capitalize R&D investment

For many years, Hengrui Pharmaceuticals has adopted a cost-based approach to R&D investment

On November 20, Hengrui Pharmaceuticals issued an accounting estimate change announcement stating that the prior R&D expenses are included in the current profit and loss when they are incurred to be treated differently according to the different stages of the R&D project

As we all know, Hengrui Medicine has always invested heavily in research and development

Regarding Hengrui Medicine's move, the market consensus is that Sun Piaoyang is facing performance pressure and a compromise to the market

In the author's opinion, more important than beautifying the financial report is that this change in Hengrui Pharmaceutical's accounting treatment has opened up the imagination of the future

External acquisition of new drugs: creating a “new engine” for growth

Whether Hengrui Medicine will learn from its peers and achieve expanded reproduction through financing is currently unknown

On February 8, Hengrui Pharmaceuticals announced that it intends to subscribe for 7.

On August 27, Dalian Wanchun granted Hengrui Medicine the joint development rights and the exclusive commercialization rights of the GEF-H1 activator punabulin in the Greater China region

On September 6, Beijing Tianguangshi granted Hengrui Medicine the exclusive and exclusive commercialization rights for the third-generation anti-CD20 antibody MIL62 in Greater China, and jointly carried out clinical research on the combination of MIL62 and related products

On November 21, Hengrui Medicine issued an announcement stating that it had reached an agreement with CStone Pharmaceuticals to introduce the rights and interests of anti-CTLA-4 monoclonal antibody CS1002 in the Greater China region

In less than a year, as Bigpharma (a large pharmaceutical company), Hengrui Pharmaceuticals has made four successive attempts.
From Biotech (a biotechnology company), it has introduced a number of innovative drugs that have completed clinical phase 3 and are about to be reported for production
.
In particular, it is worth mentioning that the transaction amount between Hengrui and Dalian Wanchun has also refreshed the local Bigpharma and Biotech's BD (Business Development) transaction record, showing Hengrui's open mind to purchase innovative products from Biotech
.

Southwest Securities released a research report that believes that in the future, more similar innovative drugs will enter the blueprint for commercialization through BD cooperation and become a "new engine" for accelerating innovation in addition to Hengrui's independent research and development
.

In the author's opinion, the strong channel advantage is indispensable for Hengrui Pharmaceuticals to become the "first brother of innovative drugs" in the A-share market
.
Facing the environment of centralized procurement, competition in the domestic innovative drug market is extremely fierce
.
In addition to independent research and development, Hengrui uses its own channel advantages to help new products quickly enter the sales peak, which is more advantageous than the small Biotech self-built sales team
.

This is actually the gameplay of many foreign pharmaceutical companies, and AstraZeneca is undoubtedly one of the best players
.
With a sales team of 20,000 people built in the Chinese market, AstraZeneca will implement 200 products
.
Some commentators believe that AstraZeneca will become the largest "CSO (Sales Outsourcing)" in the Chinese market in the future
.

At present, China's innovative drug companies also frequently conduct equity investment and joint product development
.
This not only enriches the richness of Bigpharma's independent research and development pipeline, but also provides a more convenient path for Biotech's growth
.

In any case, in the face of the downward pressure on performance, Hengrui Medicine took advantage of the trend and made major changes
.
This may not be effective in the short term
.
The resumption of outstanding foreign pharmaceutical companies, such as Takeda Pharmaceuticals, has also experienced an eight-year period of pain, and finally boosted by the launch of blockbuster products and innovative research and development, which brought investors a 7-fold increase
.
The author believes that by broadening the perspective of history, China's "first brother of innovative drugs" will still return as the king
.
As for how long Hengrui Medicine will stay dormant, the author will continue to pay attention to the emergence of inflection points
.