shengnuo biotechnology: Deepening the Development of CDMO Industry Chain Three Outward Investments Expand Growth Space Broadcast Article

Recently, shengnuo biotechnology (688117.SH), a leading domestic polypeptide drug company, released its 2021 performance report. During the reporting period, the company achieved an operating income of 387 million yuan, a year-on-year increase of 2.05%, and realized a net profit of 6125.27 million attributable to shareholders of the listed company. The net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses was 58.1 million yuan, an increase of 12.38% year-on-year.

In terms of products, preparations, APIs, pharmaceutical research, customized production, and entrusted processing have achieved revenue of 178 million yuan, 90.5695 million yuan, 63.0417 million yuan, 15.6615 million yuan, and 22.4640 million yuan respectively. Among them, pharmaceutical research and entrusted processing and APIs increased by 22.9%, 18.69% and 13.59% respectively over the same period of the previous year. In terms of different regions, the domestic business achieved a revenue of 310 million yuan; the overseas business achieved a substantial increase in revenue after the company’s overseas customer preparations of APIs were approved for listing. In 2021, the company’s overseas revenue was 59.4321 million yuan, an increase of 75.97% over the same period last year.

This is shengnuo biotechnology’s first annual report since its listing on the Science and Technology Innovation Board on June 3, 2021. Looking back on the past year, the company’s revenue and net profit have achieved steady growth. At the same time, in order to actively give back to the majority of shareholders, the company released the 2021 dividend plan, and plans to distribute a cash dividend of 3.00 yuan (tax included) for every 10 shares to all shareholders. As of the disclosure of the 2021 annual report, the company’s total share capital is 80 million shares, and it is expected to distribute a cash dividend of 24 million yuan (tax included), with a dividend payout rate of nearly 40%.

Deepen the development of CDMO industry chain

At present, my country’s peptide drug market is still in the development stage. The market is mainly based on primary products and has not yet entered the mature stage. Compared with the global peptide market, there is huge room for improvement. It is mainly reflected in two aspects, one is the market distribution, and the other is the market scale.

Unlike 85% of the global peptide drug market, which is concentrated in the treatment of chronic diseases such as tumors and diabetes, nearly 75% of my country’s peptide drug market is used for short-term or emergency medicines such as immunity, digestive tract, and obstetrics, while chronic disease peptide drugs account for nearly 75%. smaller. Due to the greater demand for peptide drugs for chronic disease treatment, the distribution pattern of my country’s peptide drug market will change in the future. From the perspective of market size, according to QYResearch statistics, the global peptide drug market in 2018 was 28.5 billion US dollars. If the future peptide drug market grows at a compound annual growth rate of 7.9%, its market size will reach 49.5 billion US dollars in 2027. , there is huge room for growth.

shengnuo biotechnology is mainly engaged in peptide APIs and preparation products. It is one of the few companies in China that has a full-process R&D pipeline and a full-industrial chain platform for peptide APIs and preparations. From pharmaceutical research services such as pilot test, pilot test, process validation and quality research, it covers the complete drug development cycle from drug discovery, preclinical research, to clinical trials and marketing.

In terms of pharmaceutical research, during the reporting period, the company continued to provide project pharmaceutical research services for new drug R&D companies and scientific research institutions such as Shandong Lukang, Shanxi Jinbo, Paige Biotech, Bio-Tech Pharmaceuticals, and Bajiayi. At present, among the R&D projects of innovative peptide drugs that the company serves, albovirtide for injection for anti-AIDS has been approved for marketing, and batifiban injection for cardiovascular has entered the stage of application for production, and there are 2 clinical phase III projects. , 1 clinical stage II, 6 clinical stage I.

In terms of combating the new coronavirus, during the reporting period, the company provided pharmaceutical research services for two innovative drugs for the treatment of new crowns from different customers, one of which has obtained clinical trial approval and is providing clinical sample production services for it.

In terms of peptide APIs, the company has 15 independently developed peptide APIs. In the domestic market, the company has obtained production approvals or activation filings for 9 varieties of polypeptide APIs, of which enfuvirtide and carbetocin are the first domestic imitation varieties; in foreign markets, the company’s 9 varieties including liraglutide have obtained U.S. DMF filing, of which 8 varieties are in active state, and can be cited and declared by preparation manufacturers.

In terms of peptide preparation products, the company’s peptide preparation products have been sold in 31 provinces, autonomous regions and municipalities across the country. As of the reporting period, the company’s peptide preparation products, Enfuvirtide for Injection and Carbetocin Injection, are the first domestically imitated peptide drugs, and liraglutide, bivalirudin, and enfuvirtide are difficult to synthesize Generic APIs have been exported to Europe, America, India, South Korea and other international markets.

At present, the company has sufficient reserves of research and development pipelines. As of the end of the reporting period, the company has 10 research and development products that have applied for registration approval to the State Drug Administration, and another 15 medium and long-term research and development projects.

It is worth mentioning that the annual report discloses that on April 12, 2022, the wholly-owned subsidiary Sino Pharma and Aoda Bio signed the “Technology Transfer Contract”. All rights related to the technical secrets and patent rights of the anti-coronavirus polypeptide drug with independent intellectual property rights were transferred to Sinopharm for 65 million yuan.

The company stated that participating in the development of broad-spectrum coronavirus membrane fusion inhibitors and their drug uses is a further supplement and improvement to the company’s existing R&D pipeline.

During the reporting period, the company raised a net amount of 285 million yuan through the initial listing, which was used for the production line project of polypeptide raw materials with an annual output of 395 kg, the technical transformation project of preparation industrialization and the upgrade of the engineering technology center.

The annual report shows that the construction of the fundraising project is gradually advancing. It is expected that after the completion of the project, the production capacity of the company’s polypeptide raw materials and preparations will be greatly increased, which will meet the market supply demand of polypeptide raw materials and preparations, and help the company to grow rapidly and maintain its competitive advantage.

Expanding new space for foreign investment

It is worth noting that, in the 2021 annual report, the company disclosed foreign investment matters for the first time. shengnuo biotechnologylogical has newly established a wholly-owned subsidiary Chengdu Shengrong Netac Technology Co., Ltd. (referred to as “Shengrong Netac”) with a registered capital of 50 million yuan. Bio is 100% controlled.

During the reporting period, Shengrong Netac, a wholly-owned subsidiary, invested 9.9 million yuan in Tingchuang Biotechnology (Shanghai) Co., Ltd. (“Tingchuang Bio”) to subscribe for 330,000 shares, accounting for 5.5% of the shares (according to Tianyan). The capital increase will be used for Tingchuang Bio’s “polymer nanoparticle-based tumor imaging probe (can be used for most solid tumors)” and “polymer nanoparticle-based nucleic acid drug delivery system” projects.

In addition, the company completed two consecutive foreign investments in March this year.

First, on March 2 this year, Shengrong Netac, a wholly-owned subsidiary, subscribed Guangzhou Shengjing’s new registered capital of 4.9 million yuan for 24.5 million yuan, accounting for 49% of Guangzhou Shengjing’s equity, and completed the investment on March 11. According to public information, Guangzhou Shengjing is committed to providing customers with a full range of peptide medical beauty products and services, and has its own brand of products and formulas.

Second, through its wholly-owned subsidiary Shengrong Netac, subscribed the newly added registered capital of RMB 225,000 of Chengdu Gechun Biopharmaceutical Co., Ltd. (“Chengdu Gechun”) for RMB 5 million, accounting for the total share capital of Chengdu Gechun after the capital increase. of 13.0434%. The capital increase agreement has been signed and the capital contribution will be completed on March 11, 2022.

It is understood that Chengdu Gechun focuses on the research and development of APIs, pharmaceutical intermediates, cosmetic raw materials, and food additives, and conducts research on authentic Chinese medicinal materials, preclinical research on various innovative natural medicines, and establishes a library of plant monomer compounds.

The industry provides natural product intermediates, traditional Chinese medicine chemical components, traditional Chinese medicine reference substances, natural product extracts, etc. for high-purity new drug research and development. Leshan Liyuan Technology, a wholly-owned subsidiary of Chengdu Gechun, has successfully realized the industrial production of hydroxypropyltetrahydropyrantriol, isorhamnetin and sulforaphane in recent years, among which hydroxypropyltetrahydropyrantriol ——High-purity “Boseine”, its key role can stimulate the conversion of skin hydroxy glucan, and the key effect is to delay aging, which has reached an annual production capacity of 15 tons.

So far, Cenobio has completed three foreign investments through its wholly-owned subsidiary, Shengrong Netac, respectively involving polymer nanoparticle tumor imaging probes and nucleic acid drug delivery systems, medical aesthetics and traditional Chinese medicine purification, and continuously expands the company’s capabilities through foreign investment. , and actively lay out a new track for peptides to open up new space for growth.

In addition, according to the first quarterly report released by shengnuo biotechnology, the company realized a net profit attributable to shareholders of the parent company of 14.2929 million yuan in the first quarter of 2022, a year-on-year increase of 22.64%, laying the foundation for the steady growth of profits throughout the year.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.