Capital favors pushing up the industry valuation, and the road to commercialization of Deqi pharmaceutical products needs to be broken.

Deqi Medicine has accumulated losses of more than 654.38+0 billion yuan in recent three years, but market analysis predicts that once the company goes public, its valuation is expected to exceed10 billion yuan. Investors can't help but ask: where will it go on the biomedical track that various capitals are chasing?

Investor network Liu Haohua

165438+1On October 9, Deqi Pharmaceutical Co., Ltd. (hereinafter referred to as "Deqi Pharmaceutical"), which has passed the hearing of the Hong Kong Stock Exchange, launched a public offering, and plans to issue 65438+542 million H shares worldwide at the issue price of 15.8 to18. It is expected to be released in 65438.

According to reports, Deqi Medicine is a biopharmaceutical company focusing on innovative anti-tumor drugs in the clinical stage. The uniqueness of the company comes from its industry-leading research and development capabilities and differentiated strategic methods for developing new anti-tumor therapies.

Although Deqi Medicine has started to issue shares, the company is still in a state of continuous R&D investment and has not yet launched marketable products. Commercialization has become the most urgent problem for the company.

In view of the listing progress, capital use and subsequent development of Deqi Pharmaceutical, Investor.com wrote to the company's secretary-general, but never received a reply from the other party.

Biomedicine becomes capital and grabs "sweet cake"

As far as commercial attributes are concerned, the research and development industry of bio-innovative drugs belonging to Deqi Medicine belongs to "high income and high risk". Therefore, most bio-innovative drug research and development companies are losing money before listing.

Like biopharmaceutical companies that applied for listing on the Hong Kong Stock Exchange and science and technology innovation board in the Mainland in the past two years, Deqi Pharmaceutical has no profit, with accumulated losses exceeding 654.38 billion yuan in the past three years.

According to the prospectus, in 20 18, 20 19 and the first half of 2020, the income of deqi pharmaceutical was 9.464 million yuan, 52.946 million yuan and193.66 million yuan respectively; The corresponding net losses were 654.38 yuan+46 million yuan, 324 million yuan and 538 million yuan respectively. Among them, the R&D expenditure is1.1.60 million yuan,1.60 million yuan and1.70 million yuan respectively.

Huang Lingyi, executive general manager of Guoxin Securities' investment banking business department, told Investor.com, "In the capital market, people pay more attention to the track chosen by biomedical companies, research and development technology capabilities and future growth space, rather than whether they are profitable now."

It is reported that since HKEx was launched in 20 18, biotech companies without income have been allowed to go public. By the end of September this year, HKEx had welcomed 265,438+0 medical and health companies meeting the requirements of Chapter 18A to come to Hong Kong for listing, raising HK$ 53.6 billion.

Science and technology innovation board, a mainland A-share listed company, is not far behind. Since the opening of science and technology innovation board in 20 19, as of 202010.30, there have been 185 science and technology innovation board enterprises listed in * * *, among which, there are 38 pharmaceutical and biological enterprises, raising funds of 48.44 billion yuan, and the total market value of the industry is.

"From the perspective of capital, medical biology has a high investment attribute. The valuation of the pharmaceutical industry at the beginning of the year was about 35 times PE, and it increased to 47 times by the end of 10. " Du Xiangyang, chief analyst of Southwest Securities Pharmaceutical Biological Group, told Investor.com that from the perspective of supply and demand, the rising prevalence of chronic diseases caused by the aging population and the continuous increase of medical expenditure have also brought greater market space to the pharmaceutical biological industry.

The analysis report of "202 1 investment strategy of pharmaceutical industry:" innovation and upgrading+import substitution "leading the great era of medicine" written by Southwest Securities shows that from 2003 to 20 13, the prevalence of chronic diseases increased by 1 times.

According to the report, "On the supply side, we can see that the status of medicine is constantly improving and the medical and health expenditure is also increasing. Judging from the proportion of China's medical expenditure to GDP, it has risen from 4.9% in 2003 to 6.6% in 20 19. From the perspective of the whole world, the current proportion of developed countries is around 13%. "

Huang Lingyi added: "In the past, the companies I contacted to apply for listing were relatively traditional. Most of them applied for listing in the past two or three years were biomedical companies."

Multi-channel capital blessing promotes the company's valuation to reach 10 billion

How much does capital favor biomedical enterprises? As can be seen from Deqi Medicine.

According to the prospectus and public information of Deqi Medicine, Celgene, a global top 500 listed company, became a shareholder in Deqi Medicine from 2065438 to April 2007.

2065438+August 2007, Deqi Pharmaceutical completed a round of financing of 2 1 10,000 USD, which was invested by Brilliance Capital, Qi Ming Venture Capital, Taifu Capital and Tiger.

On 20 19, 1 month, Deqi Pharmaceutical obtained a series B financing of10.2 billion USD, which was led by Bo Capital and Fiona Fang Capital, followed by Xinji, Wuxi PharmaTech, Qi Ming Venture Capital, Taikang Capital and Taifu Capital.

In July this year, we completed the $97 million Series C financing led by Fidelity Investment. This round has also been endorsed by Gaochun Venture Capital and GIC, and the old shareholders Qi Ming Venture Capital and Apollo Capital continue to invest.

In other words, Deqi Pharmaceutical has raised nearly $260 million for research and development and daily operation.

It is reported that Deqi Pharmaceutical has introduced 10 cornerstone investors, including Fidelity Investment, GIC Singapore Government Investment Company, BlackRock, Apollo Capital, Gaoyou Capital and Sequoia Capital, to subscribe for the shares worth about 654.38+79 million US dollars, accounting for 53.25% of the shares sold at the middle price, with a lock-up period of six months.

With the blessing of capital, the valuation of Deqi Pharmaceutical is expected to rank among the tens of billions after listing.

According to the latest report released by Essence Securities, from the perspective of valuation, Deqi Medicine can target Cheng Nuo Jianhua (09969. HK, with a market value of 654.38+05.2 billion), a biopharmaceutical company with a similar depth of hematomas and solid tumors in Hong Kong stocks. In terms of independent research and development capability and product progress, Cheng Nuo Jianhua is slightly better than Deqi Medicine. However, considering that the core product imported by Deqi Medicine is the only drug of its kind, the current competition pattern is good, and there is a layout for non-small cell lung cancer with large indications, it is considered that the reasonable market value of the company is close to that of Cheng Nuo Jianhua, which is about HK$ 654.38+05 billion, and there is room for growth of about 20% in the short term.

Du Xiangyang said that due to the two core factors of epidemic situation and liquidity, Shenwan Pharmaceutical Index rose by 48.2% year-to-date, outperforming the Shanghai and Shenzhen 300 Index by about 32.5 percentage points, ranking fourth in the industry.

The road to product commercialization is bumpy.

With the blessing of capital, it is particularly important for Deqi Medicine to realize commercialization.

According to the prospectus, Deqi Pharmaceutical has established a highly selective pipeline consisting of 65,438+02 assets, including 2 late clinical assets, 4 early clinical assets and 6 pre-clinical assets. Meanwhile, there are 9 ongoing clinical trials and 5 planned clinical trials.

Its core products are ATG-0 10 and ATG-008, which are imported from Nuclear Pharmaceutical Group and Xinji Company respectively. Among them, ATG-0 10(selinexor) is the world's first selective nuclear output inhibitor (SINE) for the treatment of refractory and recurrent multiple myeloma, and it is also the world's first SINE oral anticancer drug. ATG-008 is the first product of its kind, which is used to treat hepatocellular carcinoma and non-small cell lung cancer.

Hu Landian, a professor at Shanghai Institute of Life Sciences, China Academy of Sciences, told Investor.com, "Because of the lack of effective drugs to treat cancer, the threshold for approval is relatively low. New drugs depend on the proportion of effective people or have special effects on a certain group of people. "

According to Jost Sullivan's data, the compound annual growth rate of 2010/900 patients with multiple myeloma in China is expected to increase to 10.4% to 167200 in 2024, and the market size is expected to reach147 billion yuan in the same year. China's DLBCL market is also expected to grow rapidly. In 20 19, the number of patients with DLBCL in China was 199 100, which is expected to increase to 25,050 in 2024, with a compound annual growth rate of 4.7%, and the market size is expected to reach186 billion yuan in 2024.

Hu Landian also said that the new drug entering the clinical trial stage is only the first step and will continue to invest in research and development.

Deqi Medicine stated in the prospectus that "550 million yuan of the raised funds of 654.38 billion yuan will be used for the second phase of the production base to expand the production capacity of MCV2 vaccine and MCV4 vaccine."

"From a policy perspective, the state strongly supports the listing and commercialization of innovative drugs." Du Xiangyang told Investor.com that this year's Interim Measures for the Administration of Medication in Basic Medical Insurance (Draft for Comment) further clarified the direction of subtraction in the strategy of "changing cages for birds". Reduce medical insurance expenditure by transferring varieties to make room for clinically necessary drugs and innovative drugs. At the same time, it is stipulated that the annual dynamic adjustment and the negotiation on the access of innovative drugs to medical insurance can accelerate the speed of innovative drugs entering medical insurance and promote the volume in the new year.

It is reported that the ATG-0 10 product of Deqi Medicine is expected to submit an application for third-line treatment of multiple myeloma in China at the end of this year or the first quarter of next year at the earliest. Based on the particularity of the new drug research and development industry, the capital market is very eager for biomedicine. In the past two years, with the blessing of capital, the share prices of biomedical listed companies have also received good market feedback. But for an enterprise, capital operation can only bring short-term benefits, and the commercialization of products can make the enterprise sustainable development. Judging from the data disclosed by Deqi Medicine, there is still a long way to go to realize commercialization. (produced by Thinking Finance)