The performance of 29 pharmaceutical companies has been exposed. What is the impact of centralized procurement, national talks, epidemic situation, and cost?

It is reported that as of April 20, a total of 29 pharmaceutical companies have officially released their first-quarter performance reports

On April 22, Hengrui released its 2021 annual report.

In addition, Hengrui also released a performance report for the first quarter of 2022.

For the decline in performance, Hengrui gave five reasons in its 2021 annual report:

Increased R&D investment: The company increased R&D investment, an increase of 24.

Influence of medical insurance negotiation: The price of China negotiated products has dropped significantly.

Prices of main raw and auxiliary materials have risen, and energy costs such as electricity, steam and other costs have also continued to rise

Increased operating costs: At the beginning of 2021, the company's number of employees, institutional settings and the scale of business development do not match, resulting in high operating and personnel costs

It is worth noting that in the face of the severe and complex competitive environment and industrial changes, Hengrui Medicine is still determined to increase R&D investment.

During the reporting period, Hengrui's self-developed innovative drugs Haitrombopag ethanolamine tablets, Proline Henggliflozin tablets, and Dalcilis isethionate tablets were approved for marketing.

In addition, in 2021, Hengrui will continue to strengthen the implementation of its internationalization strategy.

A number of pharmaceutical companies have announced their first-quarter 2022 performance reports, showing an overall upward trend

According to incomplete statistics from the local medical and health station, as of April 20, a total of 29 pharmaceutical companies have officially released their first-quarter performance reports

There are 2 companies with a net profit growth of more than 100%, 21 companies with a net profit growth of 0-100%, and 6 companies with a net profit decline

See the table below for details:

(Image source: Medical and Health Local Desk)

Judging from the published data, Wantai Bio's revenue and net profit have doubled

In recent years, Wantai Bio's performance has been very eye-catching.

As for the reasons for the soaring revenue and net profit, Wantai Bio said that it was mainly due to the increase in revenue from bivalent cervical cancer vaccines, reagents and active raw materials

In addition, the performance of Xinlitai in the first quarter was good, exceeding expectations
.
In the first quarter of 2022, the company's operating income was 935.
2409 million yuan, a year-on-year increase of 22.
11%; the total profit was 267.
8039 million yuan, a year-on-year increase of 43.
38%; the net profit attributable to shareholders of the listed company was 237.
3774 million yuan, a year-on-year increase of 53.
09%
.

Although the overall trend is good, there are still six companies whose performance has declined, including Kun Pharmaceutical Group, Dabo Medical, Wohua Medicine, Berry Gene, Weiguang Biology, and Shutaishen
.

Among them, the net profit attributable to the parent company of Kunpharm Group has dropped by more than 40%.
According to the announcement released by Kunpharm, the company achieved revenue of 2.
364 billion yuan in the first quarter of 2022, a year-on-year increase of 24.
71%; net profit attributable to the parent was 114 million yuan, a year-on-year decrease of 41.
27 million yuan.
%
.
The year-on-year decrease in net profit attributable to the parent company was mainly due to the substantial investment gains obtained from the transfer of 51% equity of Kunming Yinnuo Pharmaceutical in the same period of last year
.

However, the two series of Xuesaitong Oral and Kun Chinese Medicine still performed well
.
Among them, the retail channel of Kunyao Xuesaitong soft capsule increased by 75.
12% year-on-year
.
In addition, Kunming Traditional Chinese Medicine continued to build its brand driven by the golden single product, and achieved revenue of 386 million yuan (+12%) in 2022Q1, among which Shenling Jianpiwei Granules, Shugan Granules, Xiangsha Pingwei Granules, Oroyanqing Pills, Jinhua Xiaocuo Core products such as Pills, Qingfei Huatan Pills, increased by 10.
37%, 9.
63%, 23.
03%, 43.
93%, 280.
31%, and 45.
29% year-on-year respectively
.

In addition, several varieties of Kunming Medicine were selected for centralized procurement.
For example, Xuesaitong for injection (lyophilized) won the bids in the centralized procurement of Chinese patent medicines in the Hubei 19-province alliance and the Guangdong 6-province alliance, and sales are expected to continue to increase
.
According to the forecast of Ping An Securities, with the implementation of policies such as pilot medical insurance payment in various provinces, injections will usher in the relaxation of medical insurance
.

Another pharmaceutical company, Shutai Shenchuang, suffered the biggest loss since its listing
.
In 2021, Shutaishen achieved revenue of 584 million yuan, a year-on-year increase of 37.
41%; in the first quarter of 2022, Shutaishen achieved revenue of 123 million yuan, a year-on-year increase of 6.
83%
.

But with the growth of revenue, Shu Taishen did not get rid of the predicament of loss
.
In 2021, Shutaishen had a net loss of 137 million yuan, compared with a net loss of 133 million yuan in the same period last year.
In the first quarter of 2022, Shutaishen had a net loss of 24.
409 million yuan.
In the same period in 2021, the net loss was 19.
908 million yuan, and the loss expanded year-on-year
.
In fact, from the perspective of the past five years, Shutaishen's net profit has also been declining.
In 2020, Shutaishen recorded its first net loss since its listing
.

According to the financial report, there are two main reasons for Shutaishen’s loss.
On the one hand, the sales of Shutaishen’s main product Sutaisheng (rat nerve growth factor for injection) has been decreasing year by year, resulting in a decline in revenue; Increased R&D expenses further compressed profit margins
.

At present, the main source of revenue of Shutaishen is Sutaisheng (mouse nerve growth factor for injection) and the exclusive variety Shutaiqing (compound polyethylene glycol electrolyte powder (IV))
.

In 2017, the reimbursement scope of Su Tide Biomedical Insurance was adjusted to be limited to traumatic optic nerve injury or n-hexane poisoning
.
In 2019, Su Tiansheng was included in the list of key monitoring and rational drug use drugs; then, Su Tiansheng was adjusted to the 2019 version of the National Medical Insurance List
.
Under multiple factors, the production revenue of Su peptide continued to decline
.

After the outbreak of the new crown pneumonia in 2020, Shu Taiqing's sales volume was also affected, with a revenue of 286 million yuan that year, down 10% from 2019
.

Over-reliance on two products also leads to a single revenue structure for Shutaishen, which is greatly affected by product sales
.

Overall, judging from the current first quarter report, the domestic pharmaceutical and medical markets have begun to gradually resume normal production and operation from the new crown epidemic, and the industry's losses have also eased, but some pharmaceutical companies still need to adjust
.