Hengrui Baekje Stone Medicine Zhongsheng Pharmaceutical, who will break through the 10 billion yuan mark of innovative drug revenue first? What are the trends and future patterns of the 10 companies at the forefront?

Taking stock of nearly 500 listed pharmaceutical companies, 10 pharmaceutical companies have remarkable revenue from innovative drugs, and they are the pioneers of domestic innovation and lead the development of the

In the eyes of leading innovators, "We are in a golden age of biopharmaceutical innovation, with more opportunities than ever to bring new therapies to life

It is precisely in this way that in general, China's biomedicine is about to enter the harvest period

Taking stock of nearly 500 listed pharmaceutical companies, E drug managers identified 10 companies with remarkable revenue from innovative drugs, including: Hengrui Pharmaceutical, BeiGene Shenzhou, Zhongsheng Pharmaceutical, CSPC Pharmaceutical Group, Hansen Pharmaceutical, Cinda Biological, Simcere Pharmaceutical, Beida Pharmaceutical, Fuhong Henlius, Zaiding Pharmaceutical

First, the innovation of traditional pharmaceutical companies has gradually entered the harvest period and accelerated the completion of transformation

Second, the first generation of innovative pharmaceutical companies gradually ushered in the harvest period, and the overall growth momentum showed a good momentum

Moreover, the explosive power of the first generation of innovative pharmaceutical companies in innovative drugs is enough to make traditional pharmaceutical companies feel threatened, such as BeiGene with 3.

What is the innovation power of these ten companies? Who will be number one? Can they lead China's biomedical industry to break through the "shackles" and enter the international stage to become a Pharma comparable to multinational pharmaceutical companies?

Traditional pharmaceutical companies have entered the harvest period and ushered in the 10 billion mark

Looking at the innovation and transformation process of traditional pharmaceutical companies, there are several commonalities, one is that the focus trend is obvious, from the decentralized development of multiple treatment fields to the model of "focusing on one or two treatment areas and exploring development in other fields"

For example, at this stage, Zhongsheng Pharmaceutical presents a strategy

Hansen's focus trend is more obvious, and the company is now showing changes

Hengrui, which has always focused on the field of oncology and coordinated development in multiple fields, also reflects the tendency of "focus" in the wording of the financial report

The second is that they have all entered the harvest period of innovation and transformation, and the innovative drug revenue of pharmaceutical companies with a large revenue base is about to cross the threshold of 10 billion yuan, and the proportion of innovative drug revenue of pharmaceutical companies with a small revenue base has crossed the threshold of 50%, and it has successfully transformed into an innovative pharmaceutical company

As a brother of innovation and transformation, Hengrui first came to the 10 billion mark

At the same time, in the next three years, Hengrui will usher in the peak period of innovative drug listing, and this plan also reveals that the number of innovative drug NDAs submitted by Hengrui from 2022 to 2024 will reach 21, plus 11 innovative drugs that have been approved at this stage, which is very impressive

At the recent investor exchange meeting held by Zhongsheng Pharmaceutical, it was also said that the entire innovative drug scale of Zhongsheng Pharmaceutical will reach a milestone scale of 10 billion yuan in 2023, and it is expected to list 5 tumor innovative drugs

Innovative drugs with a small revenue base complete the pace of innovation transformation faster
.
The most conspicuous is Simcere Pharmaceuticals, whose innovative drug revenue reached 1.
767 billion yuan in the first half of 2022, accounting for more than 65% of total revenue, compared with only 45.
1%
in 2020.
Among them, the newly listed stroke new drug Edalaphron dartrin (trade name: Xianbixin) in 2020 has played an important role, and the drug has achieved sales
of 1.
543 billion yuan in 2021.
In addition to Xianbixin, Simcere has also listed the blockbuster product of first-in-class in the past two years, and it is understood that traxil is the first and only drug that is prophylactically administered before chemotherapy and brings full bone marrow protection to patients
.

Hansen's innovative drugs have also shown a remarkable growth rate
.
In the first half of this year, its innovative drug revenue was about 2.
321 billion yuan, an increase of about 84.
8% year-on-year, and the proportion of innovative drug revenue further increased to 52.
3%, compared with 28.
5%
in the same period last year.

The third common denominator is the relatively conservative state of the transformation process, in fact, this is the general state of all traditional pharmaceutical companies in the innovation and transformation, and when innovative pharmaceutical companies seem to invest in research and development regardless of commercial returns, traditional drugs need to balance their own benefits and expenditures
.
The larger the revenue base, the more constraints a pharmaceutical company has, and the more
it needs to consider when transforming and innovating.

However, "the determination of innovation and transformation is not enough, and the steps are small and slow" will be revealed in the next few years, because the innovative pharmaceutical companies opposite them are "too rolled" and too invested
.

Taking the R&D investment of the indicator of measurement innovation as an example, in 2021, the R&D investment of BeiGene will be 9.
538 billion yuan, which is equivalent to two "Hengrui + Stone Medicine" or equivalent to "Zhongsheng Pharmaceutical + Stone Medicine + Hansen"
.
In the same period, Zaiding Pharma's investment in research and development also exceeded that of any traditional pharmaceutical company except Hengrui, about 3.
994 billion yuan
.

Continuous R&D investment precipitates different R&D pipelines
.
From the pipeline point of view, the pipeline scale of these traditional pharmaceutical companies is large enough, but the self-developed clinical pipeline is not new enough, and most of them are only domestic clinics and lack overseas clinics
.
Before the clinic, innovation has increased
significantly.
From the perspective of managers, most of the helmsmen of these traditional pharmaceutical companies lack the experience of listing blockbusters overseas, and the management model needs to be innovated and adjusted
in the direction of becoming multinational pharmaceutical companies.

In the case of one of them, nearly 80% of the products that will be on the market in the next three years are still biosimilars or generic drugs, and only 20% are innovative drugs
.
However, the company said that the company has changed its project thinking three years ago, and now three-quarters of R&D investment is invested in innovative drugs, and the follow-up proportion will continue to rise
.

Hengrui and Simcere clinical stage pipelines are relatively more innovative components, the former is biased towards self-research and construction, and the latter is mostly BD cooperation pipelines
.
However, at this stage, Hengrui's clinical pipelines are mostly laid out in popular targets such as PD-1, PD-L1, Her2, PARP, CDK4/6, JAK1, PCSK9, etc.
, and the future listing may face a considerable degree of competition
.
Several clinical pipelines that Simcere has cooperated with through BD, such as QPCT, AQP4, and URAT1, are relatively innovative, but most do not have global interests
.

There will be more innovation in the preclinical pipeline
.
Taking Simson as an example, its PD-L1/IL15v, TIGIT/PVRIG, MSLN/CD3 polyantibody, RAD51 and other targets are more differentiated
.
Although Hengrui did not disclose preclinical pipeline targets, according to previous news on the research and development day, there are a number of target products
with FIC/BIC potential.

Innovative pharmaceutical companies highlight their explosive power, and Baekje and Cinda catch up with large pharmaceutical companies

In addition to the huge losses caused by huge investments, the growth of innovative pharmaceutical companies is obvious to the
industry.

Led by BeiGene, innovative pharmaceutical companies such as Cinda Biologics, Zaiding Pharmaceutical, and Henlius Fuhong have grown from Biotech to Biopharma in just a few years, and have just entered the initial stage of commercialization, successively reaching sales of more than 1 billion yuan, and the revenue of innovative drugs is on the same stage
as that of large traditional pharmaceutical companies.

Some of the American Fierce15 Biotechs, which were established at the same time as them, have disappeared, some have been acquired by big pharmaceutical companies, and some are in the mire to survive
.

The two companies in the industry that are most difficult to understand are Hengrui and Baekje
.
When will the inflection point of innovation of the former arrive, the industry has different opinions, while the latter R & D investment is the first in the industry, the height of executive compensation is also the first in the industry, and the spending of money is the envy of peers, but Baekje never seems to be bad money
.
According to the financial report, in the first half of the year, Baekje's cash and equivalents were about 27.
797 billion yuan, and the cash held was about 19 times that of Garcos and 16 times
that of Yasheng Pharmaceutical.

But while the industry is still confused, Baekje is gradually proving its business model
.
In the first half of this year, Baekje's innovative drug revenue was US$566 million (about 3.
676 billion yuan), an increase of 131.
3%
year-on-year.
Among them, tirelizumab and zebutinib are important sources of income, and these two are the best examples
of validating their business models.

Taking PD-1 as an example, among the four earliest approved PD-1 players, only Baekje's Tirellizumab has come out of a solid growth trend and is competing with Hengrui's Carellizumab for the first position
.
According to the financial report data, the market sales of tirelizumab in China in the first half of 2022 reached 1.
251 billion yuan, an increase of 56.
3% year-on-year, and the sales in the second quarter of 2022 increased by 20%
compared with the first quarter.

The key to Baekje's victory also lies in his massive investment
.
Including the layout and promotion strategy of indications, the scale of indications, and the size of the commercial team are fully supported, at present, tirelizumab is the most widely deployed PD-1, initiating or completing more than 20 potentially registered clinical trials in China and globally, including 17 Phase 3 clinical trials and 4 critical Phase 2 clinical trials
.
Unlike the other three PD-1s, Baekje's PD-1 clinical trial included a large number of overseas patients to support global filings
.
From past experience, this is undoubtedly more advantageous
in international market approval.

The most surprising was Baekje's zebutinib, which had global sales of 1.
514 billion yuan in the first half of the year, up 262.
9%
year-on-year.
It is understood that the US market has become the core breakthrough point of zebutinib, and zebutinib sales in the United States in the first half of the year increased by 504.
5% year-on-year to 1.
015 billion yuan
.
In the future, with the approval of the two major indications of chronic lymphocytic leukemia (CLL) or small lymphocytic leukemia (SLL), sales will be more imaginative
.
Huaxi Securities had predicted that with the approval of various indications as scheduled, the global sales of zebutinib in 2023 may exceed 6 billion yuan
.
Coupled with tirelizumab, Baekje's innovative product revenue is expected to exceed 10 billion yuan in 2023, surpassing Hengrui
.

The explosive power of innovative pharmaceutical companies should indeed not be underestimated
.
In addition to Baekje, Cinda Biotech's innovative drug revenue is also close to
the amount of traditional pharmaceutical companies such as Hansen.
In 2022H1, the product revenue reached 2.
041 billion yuan, an increase of 10%
year-on-year.
Cinda management previously said in a conference call that the slow growth of Xindilizumab (PD-1) revenue is mainly affected by the sharp price reduction of medical insurance and the refined management of the sales team, which will benefit the efficiency
of the long-term sales system.

The adjusted Cinda is still worth looking forward to
.
At present, Cinda has 7 commercial listed products, and another 3 have been accepted by the NMPA at the listing declaration stage, including ceptinib (RET inhibitor), PCSK-9 monoclonal antibody, and BCMA-CART
.
This means that in the next two years, Cinda will hold 10 new drugs, or will once again surpass the traditional pharmaceutical companies
close to it.

Although Henlius Fuhong's listed products are biosimilars except for slulizumab, this is a good start
for its commercialization.
In the first half of 2022, the revenue of Henlius products was 1.
182 billion yuan, of which trastuzumab achieved domestic sales revenue of about 800 million yuan, an increase of about 178.
2%
over the same period last year.
At present, Henlius Fuhong has listed 5 products in China, 1 product in the world, and 13 indications have been approved
.