Go straight to the shareholders meeting | Sirnaomics Chairman Wen Yongjun: Centralized procurement has the advantage of raw materials. Polypeptides focus on extending half-life and peptide conjugated drugs.

The 2022 annual report is the second annual report released by Sirnaomics (SH688117, stock price 34.93 yuan, market value 2.794 billion yuan) after it landed on the Science and Technology Innovation Board. Judging from the data, the company’s performance has maintained steady growth, with the API business growing rapidly and the revenue from the preparation business declining due to factors such as centralized procurement.

At the annual general meeting of shareholders held on May 16, Sirnaomics Chairman Wen Yongjun said that due to the impact of special factors such as the epidemic last year, the company made every effort to develop its API business. However, the peptide CDMO (contract development and production organization) business is related to future growth, and the company’s main focus is still on CDMO-related businesses.

When talking about the recently popular peptide drugs such as semaglutide injection, Moon Yongjun said frankly that peptides themselves are a segmented industry, and semaglutide has brought more attention to the industry, and he hopes there will be more Domestic manufacturers will be approved to produce this preparation in the future. At the same time, extending the half-life of peptide drugs and developing peptide drug conjugates (PDC) are important aspects of this industry in the future.

Talking about performance: The high growth of raw materials is difficult to sustain, and the centralized procurement quotation has the advantage of raw materials

On April 25 this year, Sirnaomics released its second annual report after its listing. Last year, the company achieved operating income of 396 million yuan, a year-on-year increase of 2.38%; net profit attributable to the parent company was 64.4844 million yuan, a year-on-year increase of 5.28%. Overall, the company’s performance has maintained relatively stable growth. However, the company’s net profit after non-exclusion last year dropped slightly by 2.59% compared to the previous year.

Breaking down the company’s specific business segments, Sirnaomics’ API business grew rapidly last year, with an increase of 55.24%. Last year, it achieved operating income of 141 million yuan. The company stated in its annual report that this was mainly due to the substantial increase in exports of bivalirudin API and levosimendan API, which led to a substantial increase in API sales.

At the annual general meeting of shareholders held on May 16, some investors asked whether the high growth of APIs in 2022 could be sustained this year. In this regard, Sirnaomics Chairman Moon Yongjun said that last year, in response to the impact of the epidemic and high-temperature power cuts, the company shifted its main production capacity to the production of APIs, and the demand for APIs increased after overseas customers increased their dosage of preparations, so the demand for raw materials in 2022 The revenue of the pharmaceutical sector is relatively good.

The scene of the annual shareholders meeting of Sennuo Biotechnology

Moon Yongjun said that APIs will be affected by changes in market conditions this year, “but the company will try its best to minimize the impact and form mutual complementarity between preparations, APIs and CDMO businesses.”

At the same time, Sirnaomics’ preparation sales revenue dropped to 135 million yuan last year, a year-on-year decrease of 24.16%, and its gross profit margin decreased by 3.09 percentage points. The company explained that the decrease in preparation sales revenue was mainly due to the impact of consistency evaluation and national centralized procurement. It is understood that Sirnaomics’ Octreotide Acetate Injection won the bid for the national centralized drug purchase last year. In April this year, the company’s atosiban acetate injection and somatostatin for injection were selected for the eighth batch of centralized procurement.

Specific data shows that the revenue of the digestive system product of the selected Octreotide Acetate Injection increased by 10% year-on-year last year, and the gross profit margin decreased by 4.28 percentage points year-on-year. Thymosin for injection did not pass the consistency evaluation last year and therefore did not participate in the centralized procurement. Its revenue in the immune system field decreased by 33.10% compared with the same period last year.

Regarding the issue of profits after winning bids for centralized procurement of multiple products, Wen Yongjun told the “Daily Economic News” reporter that it is also because the company has the advantage of raw materials, so even if the centralized procurement quotation is lower than that of peers, there is still a certain profit margin. At the same time, after the company’s production line reconstruction, expansion and fundraising projects are implemented, the company’s API production capacity advantage is expected to be further expanded, and the scale advantage will help further reduce costs.

Moon Yongjun also said that the company’s preparations entered the market late, so winning the bid for centralized procurement will have a positive impact on the company’s preparation sales overall.

Talking about the peptide industry: Liraglutide has weak competitiveness after its launch, and the focus is on extending the half-life and peptide conjugate drugs
In recent years, as semaglutide injection, known as the “weight loss shot”, has become famous, the outside world’s attention to peptide drugs and APIs has also increased.

Data show that polypeptides are a type of compound made up of amino acids connected by peptide bonds. They are connected in the same way as proteins. Amino acid sequences containing less than 100 amino acids are usually called polypeptides. The main business of Sirnaomics includes peptide drug CDMO services, R&D and production of peptide APIs and preparations, etc.

In its 2022 annual report, Sirnaomics disclosed 19 CDMO service projects for the research and development of innovative peptide drugs. At the same time, as of the disclosure date of the annual report, the company has 16 varieties of peptide APIs and has obtained production approval or activation registration for 11 peptide APIs in the domestic market.

The reporter noticed that among the API products, Sirnaomics has deployed liraglutide API. As a GLP-1 analogue, this product can be used to control blood sugar in adults with type 2 diabetes. The preparation application status of this product is the US declaration for customer preparations and the domestic declaration for self-owned preparations.

At present, liraglutide injection has been successfully approved and launched by Huadong Medicine (SZ000963, stock price 41.36 yuan, market value 72.6 billion yuan), and Hanyu Pharmaceutical (SZ300199, stock price 10.92 yuan, market value 9.645 billion yuan) has also made progress in the API market. forward. In this regard, Moon Yongjun said that the product liraglutide already has stronger competitors such as dulaglutide and semaglutide on the market, which are better than liraglutide in terms of compliance and other aspects. . He admitted frankly that after several years of clinical trials, semaglutide will be fully launched, and the commercial return risk of liraglutide will be higher.

On the other hand, the research projects announced by Sirnaomics also include semaglutide API and injection. As of the time of the annual report disclosure, they are still in the pharmaceutical research stage, with the ultimate goal of obtaining production approval and listing them on the market. Moon Yongjun revealed that the clinical trial application for this project will be advanced as soon as possible. However, since the patent protection of the original research company Novo Nordisk (NVO, stock price 167.1 US dollars, market value 374.93 billion US dollars) has not expired, this domestic product is still some time away from being launched.

At the shareholders’ meeting, Moon Yongjun also talked about future breakthroughs in the peptide field.

One of the breakthroughs is extending the half-life of peptide drugs. At present, in terms of extending the half-life of peptide drugs, the industry mainly uses unnatural amino acids to replace natural amino acids in the peptide chain or uses fatty acids, cholesterol, PEG, etc. to modify the peptide. “Because a major application area of peptide drugs is the treatment of chronic diseases. For chronic patients, it is very important to extend the half-life of the drug and increase usage compliance.”

In addition, peptide drug conjugates (PDC) are also one of the important future highlights in the field of peptide drugs. At present, antibody drug conjugates (ADCs) are gaining momentum, but the therapeutic applications of ADCs are limited by their physical, chemical and pharmacodynamic properties. PDC has many advantages in using peptides as tumor-targeting carriers. They are easy to synthesize and structural modifications can be easily introduced, supporting rational drug design to improve bioavailability, affinity and stability. In addition, peptides have low immunogenicity.

At the end of the shareholders’ meeting, Moon Yongjun said that as a peptide drug CDMO company, although the company has not personally participated in innovation, it has personally experienced and participated in the R&D and incubation process of multiple innovative drugs behind the scenes. So far, the company has participated in more than 40 innovative drug service projects, of which 1 variety has been applied for production and 18 varieties have entered the clinical trial stage. If progress goes well, innovative drugs for the customers served by the company will be approved for commercialization in the future. “This gives the company confidence to release its API production capacity in the future.”