Newsletter! Third quarter report of Huahai pharmaceutical: affected by valsartan incident, net profit decreased by 47.38% year on year, affecting or continuing, 5 litigation cases to be solved

On October 31, Huahai pharmaceutical released the third quarter report From January to September 2018, the revenue of Huahai pharmaceutical reached 3.843 billion yuan, an increase of 9.48% over the same period of last year The net profit attributable to the shareholders of the listed company was RMB 255 million, a year-on-year decrease of 47.38% According to the announcement, the significant decrease in the net profit may be affected by the Valsartan incident Attachment: the current situation of valsartan events disclosed in the announcement 1 Progress of valsartan recall (1) valsartan API recall: Huahai has completed the recall of domestic valsartan APIs, and the recall of foreign valsartan APIs is advancing in an orderly manner, some of which have been recalled to the company's warehouse (2) Valsartan preparation recall work: the company's US listed valsartan preparation products within the validity period have been partially recalled (3) The work of return and compensation negotiated with customers is advancing in an orderly manner 2 Loss of valsartan incident to the Huahai sea (1) Based on the principle of prudence, based on the product inventory and return information fed back by current valsartan customers, Huahai third quarter report has estimated the freight, service, storage and other costs involved in the product recall, as well as the impact of product price decline and customer compensation caused by the inability to supply valsartan preparation products It is expected to reduce the company's current sales by 169.8693 million yuan and reduce its net profit by 17%, 9.7217 million yuan (2) Based on the principle of prudence, the company estimated in the third quarter report of 2018 that due to the impact of the FDA import ban, the company used other pharmaceutical products made of raw materials produced by South Sichuan production base, except valsartan, to accrue the inventory falling price and the customer compensation caused by the inability to supply, and expected to reduce the net profit by RMB 165.2987 million (3) The losses that are not estimated in the company's report for the third quarter of 2018 and cannot be estimated reliably at present are as follows: ① due to the company's customer recall of downstream preparations of valsartan APIs is still in progress, the relevant compensation fees with customers need to be negotiated with customers according to the agreement ② By the end of the reporting period, the company has received five lawsuits filed by American consumers For details, please refer to the announcement of Zhejiang Huahai Pharmaceutical Co., Ltd on lawsuits involving the company and its subsidiaries (Lin 2018-088), the supplementary announcement of Zhejiang Huahai Pharmaceutical Co., Ltd on lawsuits involving the company and its subsidiaries (Lin 2018-092) As the above litigation cases are still in the litigation response stage, the trial procedure has not yet started, and the litigation results are still uncertain, the company is unable to accurately judge the impact of the litigation cases, and it is also unable to estimate the subsequent litigation costs Subsequent occurrence of the above unpredicted items may have an impact on the company's performance 3 At present, the risk assessment of the new process is being supplemented according to the requirements of EU and FDA Although in the first three quarters, due to the Valsartan incident, the net profit of Huahai pharmaceutical industry decreased, but in the development of the company's products, Huahai did not relax According to the announcement data, in January September, the R & D cost of Huahai reached RMB 282 million, an increase of 18.89% year on year Let's take a look at the product declaration of Huahai in the first three quarters From January to September 2018, the approved products of Huahai Pharmaceutical Co., Ltd are based on the registration and acceptance database of intelligent drugs During January to September 2018, there are 11 approval acceptance numbers of Huahai Pharmaceutical Co., Ltd., including 1 new drug for clinical application, which has been approved for clinical application In addition, it is the acceptance number of 10 generic drugs reported for production, involving 5 drugs The details are shown in the following figure: data source: registration and acceptance database of smart drugs in January to September 2018, according to the registration and acceptance database of smart drugs produced by Huahai pharmaceutical During January to September 2018, Huahai pharmaceutical declared a total of 10 varieties of generic drugs to be listed, of which 6 drugs were included in the priority review See the figure below for details Data source: registration and acceptance database of pharmaceutical smart drugs from January to September 2018 According to the progress database of consistency evaluation of pharmaceutical smart, the current consistency evaluation of Huahai pharmaceutical industry has applied for a total of 8 drugs, and all of them have been approved for production, which can be said to be in the middle of the game In addition, Huahai also has three drugs for reference, namely sertraline hydrochloride tablets, risperidone dispersible tablets and metformin hydrochloride sustained-release tablets, among which sertraline hydrochloride tablets have completed be and have not yet been declared Data source: Pharmacy intelligence consistency evaluation progress database information source: Huahai pharmaceutical announcement data source: Pharmacy intelligence data statement: This article is the integration content, the point of view only represents the author, not the position of pharmacy intelligence network, welcome to exchange and supplement in the message area; if you need to reprint, please be sure to indicate the author and source of the article.