The epidemic in India is raging, and the global API supply pattern may be reshaped
Previously, the highest record for a single country in the world in a single day was 310,000 in the United States, but now, India is refreshing this record every day.
As of April 24, India has added 346,786 new confirmed cases of covid-19, and the number of new confirmed cases in a single day has reached a record high, with a total of 16.61 million confirmed cases; 2624 new deaths have been added, and the number of new deaths in a single day has reached a record high. There were 189,544 deaths.
This wave of India's epidemic heats up again, or it will have a more severe negative impact on the economy, and it will also affect the global industrial chain. Or it will greatly affect some industries with a relatively high proportion of India, such as raw materials in the pharmaceutical industry.
API refers to one of the substances or mixtures of substances used in the manufacture of drugs. It is an effective ingredient in pharmaceutical preparations. Patients usually cannot take it directly. It is mainly prepared by chemical synthesis, plant extraction or biotechnology.
Due to the strong strength of generic drugs, India has the title of "World Pharmaceutical Factory". According to the Orient Securities Research Report, in addition to the United States, India and China are the two largest markets for global API supply. Together, they account for approximately 21% of the global industrial chain. If the non-standard market is considered, the market share of the two is estimated Higher, it can be seen that China and India play a crucial role in the global API industry chain.
The rigid demand for drugs is strong. If the Indian epidemic causes a tight supply of raw materials in India, it may lead to a reshaping of the global raw materials supply pattern. At the beginning of the outbreak in India last year, CITIC Securities pointed out that the worsening of the new crown epidemic in India will aggravate the shortage of global drug supply, and the high unit prices of some raw materials may continue. The global supply of raw materials is heavily dependent on China and India, and the continued epidemic of new coronary pneumonia in India may disrupt the global drug supply chain and exacerbate supply shortages. Therefore, some API varieties are expected to maintain relatively high prices in a state of imbalance between supply and demand, which will bring potential full-year performance flexibility to relevant domestic API companies.
This has been reflected on the market on Friday. Among them, Manova, which is engaged in the research and development of specialty APIs and finished drugs, has reached its daily limit for two consecutive days, and East Asia Pharmaceuticals, which is engaged in the research and development, production and sales of chemical APIs and pharmaceutical intermediates, has also followed the daily limit.
From the perspective of industry development, according to the Orient Securities Research Report, the global API industry has maintained stable development in recent years.
In the long run, the global aging trend is obvious, especially in developed countries such as Europe, America and Japan. This has greatly increased the demand for medicines. The continuous expansion of the pharmaceutical market has directly driven the global bulk drug market to increase year by year.
In the short term, a large number of global blockbuster original research drug patents have expired in recent years, and related generic drugs have been listed one after another, which has further stimulated the growth of related APIs.
Huachuang Securities said that in recent years, the country's increasingly stringent environmental protection policies and the impact of volume purchases have caused many small and medium-sized API and intermediate companies that cannot meet environmental protection standards to gradually withdraw from the market. The number of loss-making companies has increased significantly since 2018. The process of de-capacity and centralization of the industry has actually begun quietly.
Guohai Securities stated that China's API industry is one of the core directions of China's new manufacturing of pharmaceuticals. It has the dual growth potential of upgrading itself and undertaking the transfer of the global industrial chain. It is optimistic that the API industry will welcome Davis double-click in 2021 and give industry recommendations. Rating, it is recommended to pay attention to the relevant targets of the new manufacturing upgrade (CDMO) logic of raw materials such as Tianyu, Minova, Prologue, Aoxiang Pharmaceutical, Jiuzhou Pharmaceutical, etc.
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