Shengnuo Biotechnologytechnology IPO: Peptide CDMO has outstanding competitive advantages, product line covers multiple fields

As a segment of the drug market, peptides have been widely used in the prevention, diagnosis and treatment of diseases such as tumors, hepatitis, diabetes, and AIDS due to their wide indications, high safety and remarkable efficacy. According to statistics from the China Business Industry Research Institute, the global peptide drug market has increased from 21.5 billion yuan in 2015 to 33.1 billion yuan in 2020, with an average compound annual growth rate of 9.01%. The global peptide drug market is expected to be 2021. It is expected to increase to 35.8 billion yuan.

Recently, Sinopec (688117.SH), a leading domestic peptide drug company, was listed on the Science and Technology Innovation Board. As a domestic enterprise that entered the research and development and production of peptide generic drugs earlier, the company’s peptide CDMO has significant core competitive advantages. It provides pharmaceutical research services for peptide innovative drugs, customized production services for peptide products, and technology transfer services for peptide drug production for domestic and foreign pharmaceutical companies. The company also has a full-process R&D pipeline and a full industrial chain platform from pre-clinical research, API production to preparation production.

With this landing on the capital market, Sino Bio will further expand its core competitiveness. Being on the golden track, and relying on its own technological advantages in the field of peptide drug research and development and large-scale production, the company’s value is expected to be further stimulated.

Steady and good performance

CDMO business continues to grow

Wind data shows that in recent years, Shengnuo Biotechnology’s business has been steadily improving. From 2018 to 2020, the company achieved revenue of 278 million yuan, 327 million yuan, and 379 million yuan, respectively, with a compound annual growth rate of 16.73%; respectively. The net profit is 30 million yuan, 48 million yuan, and 60 million yuan, with a compound annual growth rate of 41.75%.

The growth rate of net profit far exceeds revenue, showing a good momentum of high-quality development. At the same time, the company expects to achieve operating income of 180 million to 190 million yuan in the first half of 2021, an increase of 2.43% to 8.13% year-on-year; net profit is expected to be 32 million to 36 million yuan, an increase of 2.2% to 14.98% year-on-year, continuing the growth trend.

In terms of gross profit margin, the gross profit margin of the company’s main business from 2018 to 2020 is 71.33%, 80.42%, and 79.75%, respectively. In terms of industry comparison, according to wind data, the company’s sales gross profit margin reached 69.93%, 79.9%, and 78.97% in the same period, which is higher than the average level of the wind biotechnology industry, highlighting the company’s strong profitability. In terms of business breakdown, if we deduct the promotion service fee of the preparation part, the gross profit margin of the company’s CDMO business accounts for about 33%, which shows the contribution of the CDMO business to the company’s overall profitability.

Focus on peptide CDMO

Competitive advantages in both domestic and international markets

According to the research data of Lonza, it is estimated that the scale of the peptide drug manufacturing industry accounts for about 10% of the peptide drug market. Among them, the ratio of pharmaceutical companies’ own production and outsourcing production is about 1:1.

It is estimated that the peptide drug CDMO business accounts for about peptide drugs. About 5% of the market size. In the future, with the increase in the proportion of outsourcing business and the expansion of the entire peptide drug market, the peptide drug CDMO market is expected to continue to expand. In this context, Sino Bio, as a high-tech enterprise with core peptide synthesis and modification technologies, will continue to benefit.

In terms of expansion, the company selects peptide generic drugs with large market capacity and strong market competitiveness at home and abroad for research and development, and has mastered the large-scale production technology of 15 varieties of APIs, of which 7 varieties have obtained production approvals in China , 8 varieties have been registered in the U.S. DMF (activated state), and the extended development of 8 polypeptide preparation varieties has obtained 12 domestic production approvals.

The products cover immunity, digestive tract, antiviral, obstetrics and gynecology, diabetes, cardiovascular and cerebrovascular, Rare diseases, orthopedics and other fields where peptide drugs play an important role.

In terms of related products, the prospectus shows that Enfuvirtide and Carbetocin Injection for injection of Shengnuo Biotechnology’s peptide preparations are the first imitation peptide drugs in China; Bivarudine, Liraglutide, Thymofaxine, Generic APIs such as icatibant and enfuvirtide, which are difficult to synthesize, have been exported to international markets such as Europe, America, India, and South Korea. End customers include Fresenius, Aurobindo, and Mylan. (Mylan), Lupin (Lupin), Xinlitai, Shanghai First Biochemical and other well-known pharmaceutical companies at home and abroad;

5 atosiban acetate, octreotide acetate, somatostatin, thymofaxine and carbetocin The industrialized research and development of the variety has been included in the “Eleventh Five-Year” National Major New Drug Development Project. In addition, the two preparations of icatibant and posaconazole, which the company has submitted application for drug registration, have been listed in the “First Batch of Encouraging Generic Drugs List” by the National Health Commission.

Take advantage of the trend

Fundraising opens up room for growth

In order to comply with the market development trend, the company intends to use the raised funds for the production line project of 395 kilograms of peptide raw materials per year, the technological transformation project of preparation industrialization, and the upgrading project of the engineering technology center. After the above projects are put into production, the company’s peptide API production capacity will continue to expand, the large-scale production capacity of peptide preparations will be significantly improved, the research and development efficiency of peptide drugs will be enhanced, and the integrated competitive advantage of peptide APIs and peptide preparations will continue to be consolidated.

In the future, the company will seize the development opportunities of the rapid growth of the peptide generic drug market, continue to deepen the peptide drug market, use peptide API products as the starting point, and further improve the pharmaceutical research services of peptide innovative drugs and customized production services of peptide products.

Integrate into the domestic and foreign pharmaceutical industry chain, extend the development of more peptide preparation varieties, and increase the promotion of preparations and the level of promotion management. At the same time, the company will actively deploy the peptide innovative drug business field through cooperative research and development, and consolidate the company’s competitive position in the industry.