The founding CEO of Cornerstone Pharmaceuticals joined traditional pharmaceutical companies, is Biotech not fragrant?

【Pharmaceutical Network Market Analysis】Recently, the news that the founding CEO of CStone Pharmaceutical joined Hengrui has attracted attention
in the industry.
On January 9, Hengrui Pharmaceutical officially announced at the board meeting that Jiang Ningjun, former founding CEO and chairman of the board of directors of CStone Pharmaceutical, joined Hengrui Pharmaceutical as one of the candidates for the board of directors of the company, and served as the chief strategy officer, fully responsible for the internationalization, clinical research and business development
of the company's innovative drugs 。 According to the data, Jiang Ningjun's original cornerstone pharmaceutical is a biotech company, and its choice to "leave" into traditional pharmaceutical companies, what is behind this phenomenon? Some industry insiders pointed out that its departure may only be a microcosm of the changes in high-level talents in the pharmaceutical and biological industry, which may reflect the control and catalytic role of capital on Biotech, because pharmaceutical companies listed in the "18A Rule (that is, the Chapter 18A Rules of the Hong Kong Stock Exchange)" are facing a test
.
It said that although biomedicine is a relatively long-term industry, it is also full of challenges, and some companies may not produce phased results
for four or five years.
It is understood that since the introduction of the 18A rule by the Hong Kong Stock Exchange in 2018, the number of unprofitable biotech companies listed in Hong Kong has gradually increased
.
According to the statistics of the Hong Kong Stock Exchange, in 2018, there were 5 18A listed companies (raising HK$18.
5 billion), which increased to 14 in 2019 (raising HK$34.
5 billion), and as of the end of December 2021, the number of 18A listed companies has exceeded 45, covering fields from the original biotechnology to medical devices, vaccines and IVDs
.
At that time, investment institutions also increased their support for the listing and financing of Biotech, including the loss of performance for many years, but many Biotechs have not turned a profit, and even faced many challenges
such as tight cash flow and commercialization difficulties.
According to previous years' performance reports, CStone has been losing money for consecutive years
.
According to IFRS, from 2018 to 2021, the company's losses during the year reached RMB1.
793 billion, RMB2.
308 billion, RMB1.
221 billion and RMB1.
92 billion, respectively, with a total loss of RMB7.
242 billion
for four years.
Although the company achieved a total revenue of 1.
04 billion yuan and 244 million yuan in 2020 and 2021 respectively, the total revenue of the two years could not make up for the
loss.
Since July 2021, with the new policy to crack down on "pseudo-innovation", China's innovative drug industry has ushered in a cold winter in the capital market, and the phenomenon of Biotech's stock price cutting or even breaking has begun to occur frequently, and multiple factors have made the financing environment faced by Biotech more difficult
。 In this context, news about Biotech's "selling tide" continues to come, and in 2022, the shares of Mikang Biologics and Xingmeng Biopharmaceutical have been acquired successively, in addition, including I-Mab, CStone Pharmaceutical, etc.
There are rumors of "selling", in addition, including Genting Xinyao's "resale and sale" Trodelvy, Kewang Pharmaceutical's selling factory, and Harbour Pharmaceutical's core product pipeline "one stop and one sale" and
other broken arms to survive.
Against this backdrop, the accompanying turmoil in corporate management is justified
.
So, does it mean that Biotech is no longer fragrant? The analysis believes that the general environment is indeed challenging, but the pullback in the secondary market of pharmaceuticals is on the one hand because of the high uncertainty of R&D of innovative pharmaceutical companies, on the other hand, because the revenue or profit promised by pharmaceutical companies after product commercialization is not as expected, therefore, biotech companies also need to do innovative drugs solidly and continuously improve their commercialization capabilities in order to obtain the favor
of capital.
Some securities research reports pointed out that the revenue growth rate of innovative drug sub-industries will slow down in 2022, and R&D investment will continue to increase
.
With the recovery of industry policies, the epidemic control and broadband release just need to release the demand for diagnosis and treatment, and next year's innovative drug sub-industry may usher in Davis double-click
.
Disclaimer: Under no circumstances does the information or opinions expressed herein constitute investment advice
to anyone.