HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>Recently, the VBP results of Chinese patent medicine led by Guangdong Alliance were released.Investors had better confirm whether their products have been included in VBP before investing in related stocks.</li>
<li>The reason why domestic pharmaceutical companies lag behind foreign companies is not only the innovation capability or clinical speed, but also the ability to actively identify innovation and thinking mode.</li>
<li>There would be quite a few consolidations or acquisitions of Biotech at low prices. There could also be some delisting of Biotech in secondary market in the coming year.</li>
</ul>


Recently, the VBP results of Chinese patent medicine led by Guangdong Alliance were released.Investors had better confirm whether their products have been included in VBP before investing in related stocks.
The reason why domestic pharmaceutical companies lag behind foreign companies is not only the innovation capability or clinical speed, but also the ability to actively identify innovation and thinking mode.
There would be quite a few consolidations or acquisitions of Biotech at low prices. There could also be some delisting of Biotech in secondary market in the coming year.


China Healthcare Weekly (Apr.22) - TCM VBP Results, R&D Thinking Mode, Biotech Delisting

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Simcere Pharmaceutical Group / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/simcere-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:29186:1" rel="noopener">Simcere Pharmaceutical Group (2096 HK)</a> reported an 11% y/y revenue growth to RMB5 billion, mainly driven by 54% y/y revenue growth from innovative pharmaceuticals.</li>
<li>However, gross margin contracted 160 basis point to 78.4%, reflecting pricing headwind. Heavy R&amp;D and selling and distribution expenses are taking toll on operating profit.</li>
<li>During 2021, Simcere has added six registered clinical trials for phase 3, two trails for phase 2, three trails for phase 1, and obtained 12 clinical trial approvals for drugs.</li>
</ul>



Simcere Pharmaceutical Group (2096 HK) reported an 11% y/y revenue growth to RMB5 billion, mainly driven by 54% y/y revenue growth from innovative pharmaceuticals.
However, gross margin contracted 160 basis point to 78.4%, reflecting pricing headwind. Heavy R&amp;D and selling and distribution expenses are taking toll on operating profit.
During 2021, Simcere has added six registered clinical trials for phase 3, two trails for phase 2, three trails for phase 1, and obtained 12 clinical trial approvals for drugs.


Simcere Pharmaceutical (2096 HK): Double-Digit Topline Growth; Margin Deteriorating Spoils the Party

<ul>
<li>The MPP announced that it has signed agreements with 27 generic manufacturing companies including several Chinese companies for the manufacturing of molnupiravir and supply in 105 low- and-middle-income countries.</li>
<li>The profit margin would be limited because of its public benefit purpose. Therefore, it may not be able to bring huge incremental performance to the relevant domestic pharmaceutical companies.</li>
<li>The future risks and concerns on Merck's molnupiravir should also not be neglected. So, investors are advised to view this agreement with MPP rationally.</li>
</ul>


The MPP announced that it has signed agreements with 27 generic manufacturing companies including several Chinese companies for the manufacturing of molnupiravir and supply in 105 low- and-middle-income countries.
The profit margin would be limited because of its public benefit purpose. Therefore, it may not be able to bring huge incremental performance to the relevant domestic pharmaceutical companies.
The future risks and concerns on Merck's molnupiravir should also not be neglected. So, investors are advised to view this agreement with MPP rationally.


Would the Cheap Versions of Oral COVID-19 Antiviral Bring New Opportunities for Chinese Companies?

<ul>
<li>
<a href="https://www.smartkarma.com/entities/simcere-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:29186:1" rel="noopener">Simcere Pharmaceutical Group (2096 HK)</a> is transitioning to an innovation and R&amp;D-driven pharmaceutical company, with revenue from innovative pharmaceuticals making greater contribution and R&amp;D pipeline of innovative pharmaceuticals advancing rapidly.</li>
<li>During H1 2021, Simcere newly added 5 pivotal registrational trials and phase III clinical trials and 1 phase I clinical trial, and received 7 clinical trial approvals.</li>
<li>Simcere entered into three international partnerships to develop and market innovative drugs in China. The company has also in-licensed an oral COVID-19 drug candidate, which is in pre-clinical stage.</li>
</ul>



Simcere Pharmaceutical Group (2096 HK) is transitioning to an innovation and R&amp;D-driven pharmaceutical company, with revenue from innovative pharmaceuticals making greater contribution and R&amp;D pipeline of innovative pharmaceuticals advancing rapidly.
During H1 2021, Simcere newly added 5 pivotal registrational trials and phase III clinical trials and 1 phase I clinical trial, and received 7 clinical trial approvals.
Simcere entered into three international partnerships to develop and market innovative drugs in China. The company has also in-licensed an oral COVID-19 drug candidate, which is in pre-clinical stage.


Simcere Pharmaceutical (2096 HK): Focus Shifts to Innovative Drug; COVID-19 Oral Drug in Development

<ul>
<li>For Pfizer,orders on COVID-19 vaccine and Paxlovid would generate over US$50 billion revenue in 2022. So whether Pfizer would pursue for new M&amp;A opportunities become the focus of the market.</li>
<li>The oral COVID-19 antivirals are a great opportunity for the development of Chinese API companies, improving the overall valuation. However, CXOs are actually the first to benefit from this market.</li>
<li>If the COVID mutates in a more transmissible direction, the valuation and forecast of related companies in this industrial chain needs readjustment.However, if it doesn’t, the logic would change again.</li>
</ul>


For Pfizer,orders on COVID-19 vaccine and Paxlovid would generate over US$50 billion revenue in 2022. So whether Pfizer would pursue for new M&amp;A opportunities become the focus of the market.
The oral COVID-19 antivirals are a great opportunity for the development of Chinese API companies, improving the overall valuation. However, CXOs are actually the first to benefit from this market.
If the COVID mutates in a more transmissible direction, the valuation and forecast of related companies in this industrial chain needs readjustment.However, if it doesn’t, the logic would change again.


Oral COVID-19 Antivirals and the Impact on China

China

Simcere Pharmaceutical Group manufactures and supplies branded generic pharmaceuticals to the China market. The Company's products include antibiotics, anti-cancer medications and anti-stroke medications.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Simcere Pharmaceutical Group (2096 HK)

China Healthcare Weekly (Apr.22) - TCM VBP Results, R&D Thinking Mode, Biotech Delisting

Guangdong Alliance released the VBP results of TCM; The ability to identify innovation and the thinking mode is more important for Pharma; There...

Xinyao (Criss) Wang

Simcere Pharmaceutical (2096 HK): Double-Digit Topline Growth; Margin Deteriorating Spoils the Party

Despite increasing contribution of innovative products, Simcere’s profitability is under pressure, reflecting pricing headwind. Elevated R&D and...

Tina Banerjee

Would the Cheap Versions of Oral COVID-19 Antiviral Bring New Opportunities for Chinese Companies?

Some Chinese companies are allowed to make cheap versions of Merck’s molnupiravir based on the MPP agreement.We analyzed the impact and outlook,...

Xinyao (Criss) Wang

Simcere Pharmaceutical (2096 HK): Focus Shifts to Innovative Drug; COVID-19 Oral Drug in Development

Simcere is expected to continue strong performance driven by increasing contribution of innovative drugs. Rich pipeline entails visibility. The...

Tina Banerjee

Oral COVID-19 Antivirals and the Impact on China

This insight analyzed Pfizer's Paxlovid and Merck’s Molnupiravir after FDA EUA, the global market potential, the impact on China market and related...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)