Clear the cloud and see the sun, and comprehensively analyze the performance of Sino Biopharmaceutical's main products in 2021

Event: On March 31, Sino Biopharmaceutical (01177) released its 2021 annual results, with a profit attributable to the owners of the parent company of 14.
61 billion yuan, an increase of 427.
2% year-on-year
.

In addition to the contribution brought by Sinovac vaccines, how is the operation of the company's main products? Has the negative impact of centralized procurement on company operations over? Where will the focus of future development be? This article starts from the company's business itself and combines data to clarify these issues

Event: In addition to the contribution from Kexing Vaccine, how is the company's main products operating? Has the negative impact of centralized procurement on company operations over? Where will the focus of future development be? This article starts from the company's business itself and combines data to clarify these issues

1.

The adjusted net profit attributable to the parent company (basic profit excluding other influences such as associates) increased by 26.

Data source: iFinD

The company's products are greatly affected by centralized procurement, which is reflected in the financial performance that the net profit margin of sales is relatively low, and the cost of sales generally shows a downward trend
.

The changes in individual years were mainly caused by not participating in centralized procurement (2018), the new crown epidemic (2020), and the significant increase in the sales of vaccines of the associate company Kexing (2021)

The company's products are greatly affected by centralized procurement, which is reflected in the financial performance that the net profit margin of sales is relatively low, and the cost of sales generally shows a downward trend

Data source: iFinD

Second, the main product analysis

Second, the main product analysis

2.
1 Changes in product structure: the contribution of liver disease revenue decreases, and the growth of tumor line revenue accelerates

2.
1 Changes in product structure: the contribution of liver disease revenue decreases, and the growth of tumor line revenue accelerates

In 2021, the company's total sales revenue from various products will reach 26.
86 billion yuan, including 9.
22 billion yuan in tumor products and 3.
66 billion in liver disease products.
This change is basically consistent with the monitoring data of the Zhongkang CHIS system.
Features of accelerating line revenue growth
.

This change is basically consistent with the monitoring data of Zhongkang CHIS system, showing the characteristics of a decrease in liver disease revenue and an accelerated growth in tumor line revenue
.

Figure 2: Changes in the structure of various products of Chinese biopharmaceuticals (enlarged sales, unit: 100 million yuan)

Data source: Zhongkang CHIS system

Figure 3: Income of China's biopharmaceutical oncology products (enlarged sales, unit: 100 million yuan)

Data source: Zhongkang CHIS system

2.
2 Patented and generic drugs "Sanqikai"

2.
2 Patented and generic drugs "Sanqikai"

The number of patented drugs is relatively small, and the contribution of sales revenue is basically stable at one-third
.

Take Chia Tai Tianqing as an example.

The number of patented drugs is relatively small, and the contribution of sales revenue is basically stable at one-third

Data source: Zhongkang CHIS system

3.
Information about important subsidiaries

3.
Information about important subsidiaries

3.
1 Chia Tai Tianqing: The centralized procurement of generic drugs affects rapid digestion, and innovative drugs are actively seeking breakthroughs

Chia Tai Tianqingzuo is the company's core subsidiary, and its generic drug products are most affected by centralized procurement, showing an increase in the number of qualified patients for centralized procurement, a decline in the market share of hospitals after winning the bid, and an increase in the market share outside the hospital.
The negative impact of mining is rapidly digesting
.

Innovative drug products are represented by Anlotinib, which is expected to achieve breakthroughs in sales from multiple perspectives in the future

3.
1.
1 Chia Tai Tianqing Generic Drug Business

3.
1.
1 Chia Tai Tianqing Generic Drug Business

In the past few years, Chia Tai Tianqing has not many varieties qualified for centralized procurement, but by 2021, the number of generic drug consistency evaluations has increased significantly, which means that more generic drug products have been included in the scope of centralized procurement and have participated in the centralized procurement.
qualifications
.

The number of generic drug consistency evaluations has increased significantly, which means that more generic drug products have been included in the scope of centralized procurement and have the qualifications to participate in the centralized procurement
.

Figure 5: The number of drugs that passed the consistency evaluation of Chia Tai Tianqing (unit: piece)

Data source: Zhongkang CHIS system

Changes in the market share of products after winning the bid need to be differentiated between in-hospital and out-of-hospital
.

Taking the liver disease drug entecavir as an example, the main competitors in the domestic market are the original manufacturers Bristol-Myers Squibb and Chia Tai Tianqing
.
Compared with before and after the "4+7" centralized procurement won the bid in 2018, the market share of Chia Tai Tianqing Entecavir's grade hospital has not changed much
.

Changes in the market share of products after winning the bid need to be differentiated between in-hospital and out-of-hospital
.

Since 2020, the market share of Chia Tai Tianqing’s entecavir-grade hospitals has been shrinking rapidly.
There may be two main reasons: First, Chia Tai Tianqing did not renew the “4+7” contract in 2020, resulting in a decline in sales; second, Chia Tai Tianqing in 2020 Qing significantly reduced prices (32.
76%), while Bristol-Myers Squibb’s price cuts were limited (15.
21%), resulting in a drop in unit prices
.
The decline in price and volume eventually led to a significant shrinkage of the market share of Chia Tai Tianqing Entecavir in the hospital from 2020 onwards
.

The decline in price and volume eventually led to a significant shrinkage of the market share of Chia Tai Tianqing Entecavir in the hospital from 2020 onwards
.

Figure 6: Domestic market share distribution of entecavir-grade hospitals

Data source: Zhongkang CHIS system

Figure 7: Changes in unit price of Chia Tai Tianqing and Bristol-Myers Squibb entecavir grade hospitals (unit: yuan/box)

Data source: Zhongkang CHIS system

It is worth noting that in 2020 and 2021, the sales growth of entecavir in the out-of-hospital retail market will begin to increase, which to a certain extent makes up for the lack of in-hospital growth
.

In 2020 and 2021, the sales growth of entecavir in the out-of-hospital retail market will begin to exert force, which to a certain extent makes up for the lack of in-hospital growth
.

Figure 8: Changes in the sales ratio of Chia Tai Tianqing entecavir-grade hospitals and retail markets

Data source: Zhongkang CHIS system

3.
1.
2 Chia Tai Tianqing innovative drug business

3.
1.
2 Chia Tai Tianqing innovative drug business

The core product of Chia Tai Tianqing's marketed innovative tumor drug is Anlotinib
.
Anlotinib is a small molecule, multi-target (KIT, FGFR, PDGFR, VEGFR) tyrosine kinase inhibitor with approved indications for non-small cell lung cancer (NSCLC), soft tissue sarcoma, and small cell lung cancer , Medullary thyroid carcinoma
.

The core product of Chia Tai Tianqing's marketed innovative tumor drug is Anlotinib
.

In the 2021 CSCO guidelines, anlotinib is recommended as one of the level II recommendations for stage IV EGFR-mutant NSCLC targeting and platinum-based doublet therapy, and stage IV ALK fusion NSCLC targeting and platinum-based doublet therapy.
Class III recommendation for treatment after failure
.

Taking the non-small cell lung cancer market as an example, anlotinib monotherapy faces many competitors, but it has an exclusive advantage in the medullary thyroid cancer market.
It is the only approved indication in China and the only accessible medullary thyroid gland.
Cancer-like targeted therapy drugs
.
In 2021, affected by the price reduction of the national talks, the sales of Anlotinib in high-level hospitals will decline slightly
.
In the future, the main expansion direction is the combination therapy and retail market, and the overall sales may still increase
.

In 2021, affected by the price reduction of the national talks, the sales of Anlotinib in high-level hospitals will decline slightly
.
In the future, the main expansion direction is the combination therapy and retail market, and the overall sales may still increase
.

Table 2: Major domestic competitors of Anlotinib for non-small cell lung cancer

Data source: FIC Intelligence database

Table 3: Summary of major combination therapies developed by Anlotinib in recent years

Data source: Compiled by Zhongkang Industrial Capital Research Center

Figure 9: Changes in magnified sales of anlotinib-grade hospitals and retail markets (unit: 100 million yuan)

Data source: Zhongkang CHIS system

3.
2 Beijing Tide: the replacement of large items

Beijing Tide is the second largest subsidiary of the company, and its product types include cardiovascular and cerebrovascular, endocrinology, orthopedics, rheumatology and immunity, digestion, analgesia and anesthesia
.
In the past, the core single product was the cardiovascular and cerebrovascular drug alprostadil, which has always been in the forefront of the market in the past.
In recent years, due to factors such as inclusion in the list of auxiliary drugs and the launch of new cardiovascular and cerebrovascular drugs, sales have declined rapidly
.

In the past, the core single product was the cardiovascular and cerebrovascular drug alprostadil, which has always been in the forefront of the market in the past.
In recent years, due to factors such as inclusion in the list of auxiliary drugs and the launch of new cardiovascular and cerebrovascular drugs, sales have declined rapidly
.

The new major product that has been replaced is the flurbiprofen gel patch introduced from Japan .
It is thin, odorless, breathable, and has a good skin feel.
The sales have grown rapidly in the past two years.
The traditional rheumatism and bone pain patch market is close to 200.
Driven by consumption upgrades, flurbiprofen gel patch products have great growth potential in the future
.

The new major product to be replaced is the flurbiprofen gel patch introduced in Japan.
Driven by consumption upgrades, the future growth potential of flurbiprofen gel patch products is great
.

Figure 10: Beijing Tide's main product-level hospitals and retail market enlarged sales (unit: 100 million yuan)

Data source: Zhongkang CHIS system

4.
Innovative research and development

4.
Innovative research and development

Judging from the past financial statements, the company's R&D investment and proportion have increased year by year in the past five years, showing that the group has accelerated its transformation into an innovative enterprise
.
In 2021, the company's total R&D investment will reach 3.
82 billion yuan, a year-on-year increase of 34.
5% (accounting for 14.
2% of revenue)
.
Among them, the research and development investment of innovative drugs and biological drugs accounted for more than 70%, and the investment amount increased by 64.
7% year-on-year.
The research and development investment in the anti-tumor field reached 75%, and the investment amount increased by 71.
2% year-on-year
.

The Group accelerated its transformation into an innovative enterprise
.
The research and development investment of innovative drugs and biological drugs accounted for more than 70%, and the investment amount increased by 64.
7% year-on-year.
The research and development investment in the anti-tumor field reached 75%, and the investment amount increased by 71.
2% year-on-year
.

Figure 11: China's biopharmaceutical R&D investment (unit: 100 million yuan)

Data source: corporate information

Figure 12: Progress of China Biopharmaceuticals’ innovative drug products under development (as of March 31, 2022)

Data source: corporate information

In terms of innovation and development, the company actively deploys innovative drug research and development.
According to the Zhongkang FIC Intelligence database, the company currently has 34 clinical trials in Phase 2 and 3, and 49 trials in Phase 1 are actively advancing.
The coverage area is mainly oncology, which means that the company will continue to focus on the field of innovative oncology drugs in the future
.
From the perspective of the progress of research products, tumor products under development are progressing rapidly and will soon enter the harvest period
.

The coverage area is mainly oncology, which means that the company will continue to focus on the field of innovative oncology drugs in the future
.
From the perspective of the progress of research products, tumor products under development are progressing rapidly and will soon enter the harvest period
.

It is worth noting that in 2022, the indication of anlotinib for soft tissue sarcoma will be filed for NDA in the United States, and the indication for ovarian cancer will be filed in 2024, and the global layout of innovative drugs is actively advancing
.

Anlotinib will apply for NDA in the United States for soft tissue sarcoma indications in 2022, and plans to apply for ovarian cancer indications in 2024.
The global distribution of innovative drugs is being actively promoted
.

Figure 13: Indication coverage of China's biopharmaceutical research projects (unit: units)

Data source: Zhongkang FIC Intelligence database

Figure 14: Progress of China Biopharmaceutical Oncology and Other Disease Products

Data source: corporate information

Figure 15: Global Layout Progress of Chinese Biopharmaceutical Innovative Drug Products

Data source: corporate information

Epilogue

Epilogue

As an old-fashioned generic pharmaceutical company, Sino Biopharmaceutical has experienced leadership changes, organizational structure adjustments, and labor pains in centralized procurement in recent years
.
In the future, the company's generic drug business will gradually digest the negative impact of centralized procurement.
The development direction of the innovative drug business will focus on oncology, actively embrace innovation, and have broad prospects for development
.

In the future, the company's generic drug business will gradually digest the negative impact of centralized procurement.
The development direction of the innovative drug business will focus on oncology, actively embrace innovation, and have broad prospects for development
.