Hengrui, Shiyao, China Biopharmaceutical, 2022 performance which is strong?

In 2022, Hengrui, Shiyao and China Biopharmaceuticals were listed on the top50 list of global pharmaceutical companies published by the American Pharmaceutical Manager Magazine.

As the "seed player" most likely to impact the global top 10 pharmaceutical companies in China, after nearly five years of centralized procurement transformation period, what is their strength now?

According to the data of the 2022 annual report, Henrui's revenue was 21.275 billion yuan, down 17.87% year-on-year; The revenue of stone pharmaceutical was 30.937 billion yuan, up 11% year on year; China Biopharmaceutical 28.78 billion yuan, up 7.1% year-on-year.

The following is the analysis of the 2022 annual reports of three domestic pharmaceutical giants.

Heng Rui:

Attach equal importance to endogenous development and external cooperation.

Actively seeking to go to sea

On April 22, Henrui released its 2022 annual report and 2023 Q1 report. Although it failed to reverse its own predicament, the good news is that it achieved revenue of 5.5 billion yuan in the first quarter, up 0.25% year-on-year, and net profit of 1.239 billion yuan, up 0.17% year-on-year. The performance has stopped the decline and turned to growth.

In 2022, Henrui Pharmaceutical achieved revenue of 21.175 billion yuan, down 17.87% year-on-year, of which the sales revenue of innovative drugs was 8.186 billion yuan, and the net profit returned to the mother was 3.906 billion yuan, down 13.77% year-on-year. There are three main influencing factors: centralized medical collection, medical insurance, and the reduction of daily medical services.

First of all, the impact of collection on revenue is still ongoing, with the fifth batch of collection that began to be implemented in September 2021 and the seventh batch of collection that was implemented in November last year reducing revenue by 3 billion.

Second, since January 1, 2022, a number of innovative drugs such as apatinib, pyrrolizinib, thiopelgrostim, remimazolam, fluzoparib, and hatribopag have implemented new medical insurance negotiated prices, and the average sales price of medical insurance has dropped by 33%. Coupled with the difficulty of product access, the revenue of innovative drugs has grown slowly, and the sales amount of some innovative drugs has even decreased year-on-year.

Third, the daily diagnosis and treatment business of a considerable number of medical institutions reduced in 2022, affecting product sales (such as anesthesia products).

At present, Hengrui has 13 innovative drugs on the market, and these innovative drugs are still undergoing follow-up clinical research to expand the indications.

Among them, pyrrolizinib maleate combined with trastuzumab and docetaxel for the first-line treatment of HER2-positive recurrent/metastatic breast cancer, and dalciclib hydroxyetaurine combined with letrozole/anastrozole for the first-line treatment of HR-positive, HER2-negative advanced breast cancer have been approved for marketing.

Henrui is developing innovative drug pipeline, mainly focusing on anti-tumor, metabolic diseases, rheumatic immunity, cardiovascular disease, anti-infection, ophthalmology, respiratory system, pain management, kidney disease and other fields.

After years of layout, Hengrui's innovative drugs have ushered in the harvest period, and 39 pipelines under research have entered clinical stage 3 and above:

Among them, 9 were in the field of anti-tumor, 8 in the field of metabolic diseases, 11 in the field of rheumatic immunity, 3 in the field of cardiovascular disease, 2 in the field of anti-infection, 2 in the field of ophthalmology, 2 in the field of pain management, and 2 in other fields.

Most anticipated is an ADC drug, SHR-A1811.

SHR-A1811 is a HER2ADC product independently developed by Henrui. Shr-a1811 can bind to and endocytoze HER2-expressing tumor cells, cleave the toxin in tumor cell lysosomes by protease, and induce cell cycle arrest to induce tumor cell apoptosis.

Henrui has carried out clinical exploration of SHR-A1811 in multiple subtypes of breast cancer, non-small cell lung cancer, gastric cancer, colorectal cancer and other solid tumors, all of which are expected to become blockbuster products. Two clinical studies on HER2-positive breast cancer and HER2-low expression breast cancer have entered phase 3.

The clinical phase I trial data of SHR-A1811 in unresectable advanced or metastatic solid tumors with HER2 expression/mutation were published on the AACR. The ORR was 61.6% (154/250), and the 6-month PFS rate was 73.9%. The ORR of SHR-A1811 in patients with HER2-positive breast cancer was 81.5%, and the ORR of SHR-A1811 in patients with HER2-low breast cancer was 55.8%, which was between the me-too and me-better ranges of DS-8201.

Through continuous investment in research and development, Henrui has established a number of new technology platforms with independent intellectual property rights, such as proteolytic targeted chimeric (PROTAC), molecular glue, antibody drug conjugate (ADC), bi/multi-specific antibody, mRNA, bioinformatics, translational medicine and so on, while maintaining new drug discovery and clinical development projects.

Among them, six novel and differentiated ADC molecules have been successfully approved in clinical practice, and the anti-HER2ADC product SHR-A1811 has rapidly entered the phase Ⅲ clinical study stage. One PROTAC molecule has been in the clinical research stage, and another PROTAC molecule is under clinical application. The PD-L1/TGFβ bispecific antibody drug SHR-1701 has been rapidly promoted in a number of clinical phase Ⅲ studies. A new generation of TIGIT/PVRIG fusion protein has been successfully conducted in clinical research, and more than 10 First-in-class/Best-in-class double/multi-specific antibodies are in development.

In terms of R&D investment, Hengrui's cumulative R&D investment reached 6.346 billion yuan in 2022, an increase of 2.29% year-on-year, and the proportion of R&D investment in sales increased to 29.83%. The total overseas investment reached 1.272 billion yuan, accounting for 20.04% of the total R&D investment.

Last year, Hengrui paid equal attention to endogenous development and foreign cooperation, steadily promoted the internationalization strategy on the basis of endogenous development, and made great progress:

In June 2022, hytrombopag ethanolamine tablets were granted orphan drug status by FDA for the indication (CIT) of chemotherapy-induced thrombocytopenia in malignant tumors.

The first international multicenter phase Ⅲ clinical study of camrelizumab combined with apatinib in the treatment of advanced liver cancer has reached the primary endpoint. In October 2022, the Pre-BLA communication meeting with the FDA was completed for the indications of first-line treatment of advanced liver cancer combined with apatinib, and the preparation for FDABLA submission in the United States has officially started.

An international multi-center phase Ⅲ trial of fluzoparib capsules combined with abiraterone acetate in the treatment of metastatic castration-resistant prostate cancer was carried out in 12 countries and regions including China and the United States.

Stone medicine:

In the field of cutting-edge new technologies in the world

In 2022, CSPC achieved revenue of 30.937 billion yuan, up 11% year-on-year, and net profit of 6.091 billion yuan, up 8.7% year-on-year.

It mainly includes three parts: patent medicine business, raw material product business and functional food:

The revenue of patent medicine business was 24.52 billion yuan (including the revenue of license fee was 186 million yuan), an increase of 8.1% compared with last year. Neural field 8.108 billion (7.5%), anti-tumor field 7.415 billion (-3.8%), anti-infection field 3.54 billion (20.1%), vascular field 2.829 billion (4.5%), although the growth of respiratory system and digestive system is more than 50%, but the base is very low less than 1 billion yuan.

The revenue of raw material products was 4.45 billion yuan, of which the revenue of vitamin C was 2.529 billion yuan, up 17.7%, and the revenue of antibiotics increased 15.1% to 1.92 billion yuan.

Revenue from functional food and other businesses was 1.966 billion yuan.

At present, the company has more than 110 innovative drug projects under research, including about 40 large molecules, about 40 small molecules and about 30 new formulations.

In 2022, the world's exclusive innovative product Doenda (mitoxantrone hydrochloride liposome injection) and China's first approved PI3K inhibitor Cobitux (Duvelisse capsule) were launched in January and November, respectively. In March 2023, a novel coronavirus mRNA vaccine (SYS6006) was approved for emergency use in China for the prevention of COVID-19 caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) infection.

In 2022, the research and development cost of stone drugs was 3.987 billion yuan, up 16.1% year-on-year. The number of patients enrolled in clinical research exceeded 2021, and more than 50 new drugs under investigation are in the clinical stage, of which 9 have submitted marketing applications and 16 are in the key clinical trials.

Shiyao has established a number of innovative research and development platforms, covering small molecules, macromolecules, nano-formulations, antibody drug conjugates (ADCs), messenger nucleic acid (mRNA) vaccines and small interfering nucleic acid (siRNA) drugs, among which the nano-formulation technology platform has successfully developed four blockbuster products in nano-dosage forms.

At present, more than five products in the R&D pipeline are blockbuster products with global patents and high market value.

The overseas rights and interests of two ADC drugs, SYSA1801(Claudin18.2ADC) and SYS6002(Nectin-4ADC), were licensed to ElevationOncology,Inc. And CorbusPharmaceuticals, Inc., two or more drugs can bring company up to more than $15 potential milestone payments and sales commission.

China Bio-Pharmaceutical:

When the COVID-19 dividend disappears,

Continue to advance from imitation to creation

China Bio-pharmaceutical's revenue in 2022 was 28.78 billion yuan, up 7.1% year on year, and its profit was 5 billion yuan, down 70% year on year, mainly due to the decrease in revenue from COVID-19 vaccines.

The revenue of new products launched in five years was 12.5 billion yuan, accounting for 43.5% of the revenue, an increase of 19.8% year-on-year; The revenue of anti-tumor drugs reached 9.19 billion yuan, accounting for 14.3% of the revenue; The revenue of innovative drugs was 6.75 billion yuan, accounting for 23.5% of the revenue.

In 2022, China's biopharmaceutical R&D investment was 4.454 billion yuan, accounting for 15.5% of revenue, of which the R&D investment of innovative drugs and biological drugs accounted for more than 74%, an increase of 19% year-on-year. Research and development investment in the field of anti-tumor accounted for more than 75%, an increase of 15% year-on-year.

At present, the listed drugs are mainly concentrated in the fields of anti-tumor drugs, liver disease drugs, respiratory system drugs, surgery/analgesia drugs, and cardiovascular and cerebrovascular drugs.

A total of 40 innovative drugs in the field of oncology are in clinical application or development stage, of which 4 are in marketing application and 4 are in clinical phase 3. It is expected that 8 innovative drugs and 11 biosimilars or generics will be approved in the oncology field in the next 3 years.

Currently, Focovi (anlotinib hydrochloride capsules) has been approved for five indications: third-line non-small-cell lung cancer, third-line small-cell lung cancer, soft tissue sarcoma, medullary thyroid cancer, and differentiated thyroid cancer.

In addition, a phase 3 clinical trial combined with PD-L1 for the treatment of first-line small cell lung cancer has completed an interim analysis. Anlotinib also has 12 new indications in phase 3 clinical studies.

A total of 8 innovative drugs in the field of liver disease are in clinical application and development stage, including 1 product in phase 3 clinical practice and 4 products in phase 2 clinical practice. It is expected that four biosimilars or generics will be approved in the liver disease field in the next 3 years.

A total of 10 innovative drugs in the field of respiratory system are in the clinical application or above development stage, of which 1 product is in the marketing application stage (enseltamivir (3CL protease inhibitor) is a new oral treatment for COVID-19), and 5 products are in phase 2 clinical. In addition, there are 6 biosimilar or generic products in the marketing application stage, and 2 products in clinical phase 3. The company expects that in the next three years, there will be 1 innovative drug and 8 biosimilar or generic drugs in the respiratory field.

In the field of surgery/analgesia, there are 3 innovative drug candidates in the clinical application stage or above, and 2 of them are in phase 3. In addition, there are 10 biosimilars or generics in the field of surgery/analgesia in the clinical stage, of which 4 are under marketing application and 5 are in clinical phase 3. The company expects to have two innovative drugs and nine biosimilars or generics approved in the next three years.

Summary

After the development in recent years, Hengrui, Shiyao and China Biopharma have become competitive in terms of volume and the abundance of R&D pipelines, and are trying to obtain a broader market overseas.

However, these three pharmaceutical giants are in the transition period from metoo/mebetter to FIC or BIC, which needs time and technology accumulation, especially there is a significant gap in the amount of research and development investment, and the transformation of giant companies will take time.

References:

1. The 2022 annual report of Hengrui, Shiyao and China Bio-Pharmaceutical

2. Biopharma Xiaobiao: Henrui finally caught up with the development wave of ADC