Innovative drug investment in the cold winter: finding certainty from uncertainty

From the fourth quarter of last year to the past few months of this year, China's biopharmaceutical investment market has plummeted, and it can no longer be described as ble.

The performance of the secondary market, whether it is the US stock NASDAQ, the Hong Kong stock 18A, or the science and technology innovation board, the bleak trend is beyond descripti.

Investment and financing trends of China's biopharmaceutical industry 20210~2024

Data source: InvestGo, a medical cube investment and financing database

What's worse, these statistics based on public market information, considering that there is often a lag of two or three months from the signing of the contract to the delive.

Regarding the reasons for the cold market, there has been a lot of discussion recent.

Is the market short of money? It should not be that sho.

What the market lacks is confiden.

Stability in Turbulence: The Real Logic Behind the Investment Turnaround

Since the second half of last year, many domestic biopharmaceutical investors have sighed like this: "In this market, innovative drugs no longer know what to invest .

In desperation, investors can only flock to one early theme after another: AI pharmaceuticals, various new concepts of RNA, digital medicine, and intestinal flo.

The successive breaks of IPOs in the secondary market have further strengthened such sentimen.

Behind these incredible attitudes, what kind of changes in the market wind direction are implied? I'm afraid, we still have to look at the essence through the phenomen.

In fact, investors' preference for new-themed early-stage projects and income-oriented projects is only an appearance, and their real inner aspirations are mainly slow falsification and low valuati.

Consider the stock market analo.

Pursuing certainty in a turbulent market environment is the instinctive reaction of investors, and this is the real logic behind the current shift in biomedical investme.

Crowded new track: divergences under subject anxiety

At present, the investment logic of seeking stability is correct, but many domestic investment institutions frequently turn to new tracks, which may be quite differe.

It is often said in the industry that CRO is selling shovels, and new drug development is digging for go.

This is not an exaggerati.

In a volatile market environment, it is right to seek investment certain.

The question is, for innovative drug investment, what kind of project is more certain? At the very least, this company has to make people believe that it is really capable of bringing this innovative drug to market, right? But it is this simple truth that seems to have been ignored by primary market investors who are blindly seeking innovation in recent yea.

Nonetheless, the secondary market is always recogniz.

Don't you see Hong Kong stocks, the closer the company's innovative drug varieties are to the commercial end, the higher the market's valuati.

In addition to Baiji Xinda Junshi, try a number of Biotechs with relatively high valuations, such as Rongchang, Nuochengjianhua, and Kangfang, which are basically companies whose products have been listed or are about to be list.

On the other hand, there are several companies whose founders and teams’ abilities and status are no worse than those above, but the market value is far apa.

It's just because the product stage is still too early, and even the key clinical trials have not yet arrived, so the accounts of secondary investors can't be calculat.

In the primary market, you can watch the team & listen to stori.

After all, the secondary market must be discounted cash fl.

Nuocheng Jianhua's orelabrutinib, the primary market may seem "isn't it a BTK inhibitor that is full of streets", but the secondary market seems to be "listed + no risk of R&D failure + anytime bring in revenue”, so “we can give a higher valuatio.

Aren't these all out of consideration for certainty?

In view of this, for primary investors, if they still want to exit through IPO, they should think more about the idea of ​​secondary mark.

Return to the simplest logic of innovative drugs

At this point, I am afraid that the first-tier investors will complain: I don’t want to invest in those new topics, I really want to invest in small molecules and large molecules with higher certainty, but the low-risk targets are too strong, and the ones that are n.

The risk of failure is high, what should I do? Indeed, this is the objective situation, sugarcane is not sweet at both en.

But having said that, in the past ten years, the fast flow route of Chinese innovative drugs has brought the low-risk target to the e.

In other words, it's not whether you want to choose or not, but the road has been block.

If we feel that innovative drugs are still worth investing in, perhaps we should think more about how to choose the most likely to win from some new targets that are not very convoluted, although they seem to be riski.

Many views say that investment in the primary market makes money from cognitive differences, and this principle also applies to betting on innovative drugs with new targe.

Opportunities that everyone can see are definitely not opportunities, and real opportunities can only be nurtured in the perception of differences of opini.

Returning to the most simple logic of innovative drug research and development, for those innovative targets with cognitive differences and little competition, try to compare the following characteristics, which may help investors to select some from the market that have a relatively greater chance of success project:

The core project has completed a clinical study of a certain scale of patients, the efficacy data has been verified, and the clinical data is positive;

Key research is about to start or just started;

The company's cash reserves are basically sufficient, and it has the resources to cope with the complex and changing industry situation;

The team must have sufficient capabilities and experience in new drug research and development, especially clinical research;

The research on the molecular mechanism of the target is relatively sufficient, and there is a certain theoretical basis;

The theoretical patient group is larger, or there are more opportunities to expand application scenarios;

In addition, there is a lack of effective treatment methods, and the oncology program especially focuses on solid tumo.

Looking back on the past two years, these characteristics are indeed somewhat unremarkable in the face of many emerging themes in the biopharmaceutical indust.

But today, in the current volatile market environment, certainty has become a scarci.

Perhaps only in this way can it be more beneficial for those really excellent innovative drug projects to stand out, and for investors to pick up the original intention of investing in this track: each chooses a new target that is optimistic and less convoluted, and then is really down-to-ear.

Make the medici.