Nuocheng Jianhua's innovation board is listed, and innovative biological companies return to A shares into inevitable

On September 21, Nuocheng Jianhua successfully landed on the Science and Technology Board of the Shanghai Stock Exchange. The issue price was 11.03 yuan. On the first day, it closed at 9.33 yuan, down 15.41%. After listing in Hong Kong in March 2020, Nuo Chengjian officially set foot on the new journey of "H+A", becoming a IPO project with a global market biotechnology company returning to A's largest financing scale in 2022.

Nuocheng Jianhua was established in 2015. The product layout focuses on the field of tumors and autoimmune diseases. It is affected by factors such as population aging. Nuocheng Jianhua's field of demand is huge. According to the data of Ferrisana, the global tumor drug market in 2020 reached 150.3 billion U.S. dollars, and it is expected to increase to US $ 482.5 billion in 2030; the size of the global autoimmune disease drug market in 2020 reached 120.6 billion US dollars. It is expected to grow in 2030. To 175.2 billion US dollars.

Facing this huge and rapidly growing market, only companies with strong research and development capabilities can enjoy development dividends. The funds are a solid backing of R & D.

The gathering effect of science and technology board on hard technology has continued to increase, and more and more high -quality red -chip companies have embarked on the journey of "back to A". Nuocheng Jianhua's landing science and technology board is expected to open the operating trend of the H+A dual capital platform. This may be the new direction of Chinese biotechnology companies in the capital market in the future.

Star founder's aura bless

Shi Yigong, who is well -known in the industry, is one of the co -founders of Nuo Chengjian.

Shi Yigong has titles such as academicians of the Chinese Academy of Sciences, a professor of chair at the School of Life Sciences of Tsinghua University, a foreign academician of the American Academy of Arts and Sciences, a foreign academician of the National Academy of Sciences, and a foreign member of the European Molecular Biology (EMBO). In Nuo Chengjian's introduction, Shi Yigong participated in the company's operation as the co -founder and chairman of the Scientific Consultant Committee, providing several assistance and guidance to the company's R & D activities.

Another founder, Cui Yisong, is also a man in the global pharmaceutical research and development community.

Cui Yisong has worked in Merck for 14 years and is also a PPD's Bao Nuo Technology CEO and chief scientist. During his tenure as the chairman of the American Traditional Chinese Medicine Development Association, he invited Shi Yigong to give a keynote speech to the International Conference held by the Association to meet. By 2015, the domestic innovative drug environment gradually improved, and Cui Yisong and Shi Yigong decided to be an innovative drug company to bring excellent overseas experience back to China.

In addition to the two co -founders, the company's management mostly comes from transnational pharmaceutical companies such as Pfizer, GlaxoSmithk, Beltay Schimi Bao, Johnson & Johnson. Among them, Shi Yigong's wife Zhao Renbin worked for Johnson & Johnson, and successively served as senior scientists and chief scientists. Later, he served as the director of pharmaceutical research in Pajo Technology. Zhao Renbin is currently the executive director of Nuo Chenghua.

Although 2015 is the downturn of the development of new pharmaceutical companies, the reform of the drug review has just begun. Prior to this, China's pharmaceutical market was occupied by a large number of generic drugs, and the new drugs were approved many. Cheng Jianhua quickly received financing from investment institutions. From 2016 to 2019, Nuo Chengjian had a total of about 300 million US dollars.

Thanks to the good R & D progress, in March 2020, Nuo Chengjian was listed on the Hong Kong Stock Exchange. At that time, the financing of about 2 billion Hong Kong dollars was used for plant construction, the establishment of sales teams, and subsequent research and development investment.

Hong Kong stocks have been listed for two years, profitability is still a problem

Generally speaking, it takes more than 10 years from research and development to listing from research and development to listing, and Nuo Chengjian has launched the first product in just 5 years.

At the end of 2020, the main product of Nuo Chenghua's main product, Obitinib (宜 在 在 在) was approved to be listed by the National Drug Administration. At present, TAFASITAMAB, the second commercial product of Nuo Chenghua, has been approved by Boao Super Hospital as a clinical urgent need for imported drugs. In addition, there are 12 products in the phase I/II/III clinical trial stage, and 4 products are in the pre -clinical stage.

Obitinib and its major domestic market share, Tuyuan Prospectus

Obntinib is the third BTK inhibitor listed in the domestic Ibetinib and Zabitinib. Due to the commercialization of commercialization in 2021, in 2021, Obitinib's sales revenue was 215 million yuan, with a market share of 11.9%. With the end of 2021, Obitinib entered the medical insurance directory. According to the 2022 report data, Obntinib's sales revenue reached 217 million yuan, an increase of 115%year -on -year.

In the roadshow, Nuo Chengjian's chief business officer Jin Xiaodong said that as of September 1, 2022, Obesinib has been included in the scope of "dual -channel" drug management in 28 provinces, municipalities and autonomous regions. Retail pharmacies implement a unified medical insurance payment policy. Obitinib patients will be strongly guaranteed, and market competitiveness will be significantly improved.

Nuo Chengjian is still in the stage of loss. According to the prospectus data, from 2019 to 2021, the company's net profit attributable to the mother was -2.141 billion yuan, -391 billion yuan, and -64.546 million yuan, respectively. As of December 31, 2021, the company's cumulative losses have not made up to 3.562 billion yuan. In the first half of this year, the company's losses expanded from 209 million yuan to 441 million yuan in the same period last year, and the loss expanded by 110.75%year -on -year.

Like all innovative pharmaceutical companies, Nuo Chengjian is facing the problem of long research and development cycle and high investment. The prospectus shows that the R & D expenses of Nuocheng and Jianhua in the past three years were 234 million yuan, 423 million yuan, and 733 million yuan, respectively. In the first half of this year, R & D costs were 274 million yuan, which was higher than 185 million yuan in the same period last year. Continuous R & D investment is the main reason for losses. For innovative pharmaceutical companies, the advantage of independent research and development is that they can choose the target and make the compounds well. They can also gain international rights while controlling the cost, but the disadvantage is that the research and development cycle is too long. In order to increase revenue, Nuo Chengjian introduced the new drug TAFASITAMAB in the field of blood tumors he was deeply cultivated. It is expected that there will be opportunities to combine drugs with existing product pipelines in the future promotion and existing product pipelines.

For a Biotech, product development is only the first step towards success. How to pass the commercialization threshold will be a problem that it must face.

Gao Yan continues to add injection to promote the process of commercialization

Whether the loss continues to expand is largely depending on whether the sales of Nuo Chengjian's commercial products can meet the expectations.

In order to accelerate the process of commercialization and in terms of production capacity, the commercial production of Guangzhou Pharmaceutical Production Base has been officially approved. The base is constructed in accordance with the GMP standards of China, the United States, the European Union, and Japan. class. From June 30 this year, it can be used for the production of Obitini, which also means that Nor Chengjian has opened the way to produce independently.

In terms of commercial sales, according to the prospectus, Nuo Chengjian has established a commercial team of more than 230 people to comprehensively promote the market expansion of Obesib. In the future, with the landing of TAFASITAMAB in the second product, the team will further expand.

Although the revenue increased by Obitinib sales is significantly significantly, Nuo Chengjian wants to achieve profitability with a product to achieve a long way to go.

In order to maintain abundant funds in the development process, like most BIOTECH companies, Nuocheng Jianhua obtained a large amount of cash flow through equity financing on the one hand; on the other hand, through strong BD capabilities, it achieved commercial development cooperation with large pharmaceutical companies.

In July 2021, Nuo Chengjian reached a license and cooperation agreement with Biogen to set a down payment of $ 125 million to the global exclusive rights in the field of multiple hardening fields and some autoimmune diseases except China except China. Exclusive rights in the field are awarded Biogen.

Nuocheng Jianhua will receive a $ 125 million down payment, as well as the potential clinical development milestone, commercial milestone and sales milestones of up to $ 812.5 billion, and also qualified to obtain a layered franchise fee based on net sales.

Main product Obutney R & D progress, Tuyuan prospectus

The 2022 interim report shows that as of June 30, 2022, Nuo Cheng's cash and cash equivalents were 6.519 billion yuan, and there was no shortage of money on the book. Just with the advancement of clinical research, capital demand will be higher. Nuocheng Jianhua is promoting a number of clinical trials of research products worldwide, continuously expanding product pipelines and promoting the expansion of the indications of product research products, which also means that Nuo Chengjian's research and development costs will continue to maintain a high level.

In this case, only to maintain a certain amount of funds to ensure the sustainable development of the company, and the middle will not stop research and development because there is no money. In the future, it is possible to usher in the situation of the implementation of multiple products, rapid revenue growth, and the company's rapid development.

One year after the Hong Kong stock market was listed, in February 2021, Nuocheng Jianhua completed the agency's orientation of 210 million shares, and obtained approximately HK $ 3.042 billion in capital injection of Gaoma and Victoria Capital. In August 2021, the second -level market team in Gaozhang increased its holdings of 637,000 shares; in November, Gao Yan increased its holdings of 10.914 million shares again, costing 194 million Hong Kong dollars.

Gao Yan's continuous support has given Nuo Cheng's great help, but this is not enough. For Nuo Chengjian, who has been listed in Hong Kong, returning to A shares has become an inevitable choice.

Red chip return A, cast the future possibility of casting

Although Nuo Chengjian began to introduce drugs in License-in, self-developed products were its core competitiveness. Cui Yisong once publicly stated: "When the market is not good, choose to log in to the science and technology board, or for strategic consideration. If you fade more funds, you can promote more clinical projects. More importantly, consolidate your own moat. "

China had no new drug creation before, the industry has just begun to develop, and the entire industry's understanding of the creation of new drugs is not deep. New medicine creation itself has great risks. Real innovation companies must have core and their own technical barriers. This requires the company's clear goals, plans and strategically executed.

From a macro perspective, under the new environment of high -degree policies in domestic policies, my country's innovative drug market has gradually entered the stage of stable expansion. Judging from the results of medical insurance negotiations over the years, the innovation of drugs has continued to improve, and varieties with high clinical value have achieved significant growth in sales after negotiations and entered medical insurance. Obitinib is a typical case.

Nuocheng Jianhua's product pipeline research and development progress, Tuyuan prospectus

Nuo Chengjian's development goal is very clear, that is, the product pipelines in the fields of hemoma, autoimmune diseases, and physical tumors are continuously promoted. The company's continuous hematopoietic ability has been proven. Biopharma (comprehensive biomedical enterprise), which is integrated from Biotech to integrate innovative drug research and development, production and commercialization. How much does it cost to develop an innovative medicine? This question is difficult to have a certain answer.

However, we can get a approximate conclusion through the report of "2021 Pharmaceutical Innovation Return Evaluation" released by Deloitte. Deloitte analyzes the trend of R & D rates of 15 leading biopharmaceutical companies in the world in 2021. The data shows that these companies have an innovative medicine. R & D costs were US $ 2.06 billion. This means that an innovative medicine needs to consume nearly 14 billion yuan from the laboratory to the market.

In other words, the 6 billion funds of Nuo Chengjian's book seem to be sufficient, but it is not enough to support enterprises to gain greater market competitiveness.

Therefore, Nuo Chengjian's return to A shares this time is both tactical and strategic.

Previously, it was difficult for companies without profit to list on A shares because the listing conditions mainly depended on revenue and profit. The real innovation pharmaceutical company has a large investment in the early stage, and it is difficult to meet the listing standards in accordance with the traditional listing rules. After that, the Hong Kong stocks "18A" allowed income -free and unprofitable biotechnology companies to submit a listing application in the Hong Kong Stock Exchange, so it has become the first choice for many unprofitable biotechnology companies.

Later, the CSRC issued relevant announcements to adjust the market value requirements of red -chip companies overseas to "two choices", that is, "market value is not less than 200 billion yuan", or "market value of more than 20 billion yuan, and has autonomous autonomy and own autonomous autonomy R & D and international leading technologies, strong scientific and technological innovation capabilities, and a relatively advantageous position in the competition in the same industry. " This has actually lowered the threshold for the return of red -chip companies overseas.

With the reform of the domestic capital market reform and opening up, the inclusiveness of the listing system has increased, and the path of red -chipping A is continuously widening, and the surrounding capital market environment factors are superimposed. A considerable number of companies choose to return to A shares to pursue more stable capital and operating environment. On the other hand, the market value of Chinese stocks in Nasdaq was seriously undervalued, and the motivation for innovative technology companies to return to A shares was significantly enhanced.

The competition of any industry in the process of capitalization is fierce, which is also the driving force for industry changes and development. At the same time, the capital market is also developing dynamically. It not only depends on the present, but also pays attention to the future, but companies with continuous innovation capabilities have more possibilities to embrace the future.

A+H is listed on the market, or the future financing trend

The number of listed companies that choose to open up the "A+H" dual financing platform are increasing. According to data from Oriental Fortune Choice, 146 companies have opened up dual financing platforms.

The listing of "A+H" contains three modes, namely "first H, then A", "first A, then H", and "A+H synchronization".

First, A and then A can be understood as a large demand for funds. Therefore, H -shares that choose to quickly list and financing can be selected to solve the urgent need of eyebrows. After that, the performance is better returned to A shares to obtain more high valuations and more financing. And then A and H can be understood as a need for enterprises for international development, and requires an external financing platform such as H shares.

From the perspective of financing environment, the opening of the "A+H" dual financing model is inseparable from the deepening reform of a series of listing systems in recent years in the two major capital markets of A and H, and the tolerance and openability of the listing system have continued to improve. the result of.

From the perspective of corporate development, the "A+H" builds two financing platforms, allowing the company's own subsequent financing will not be subject to a single market. The diversified financing channels brought by the dual financing platform will greatly enhance corporate financing capabilities. Opening the "A+H" dual financing platform will not only help strengthen the close connection between the two markets of the enterprise and the domestic market, but also further expand the financing channels.

In addition to raising funds, companies that "first A and then H" can use the advantages of the internationalization of Hong Kong market supervision to improve the level of corporate governance and promote corporate marketization and standardized operations; "first h" enterprises can better use the domestic capital market Power allows the diversified optimization of corporate capital structures, and grows funding reserves of sustainable development strategies.

From the perspective of influence, if enterprises have a global business layout, the layout of the "A+H" dual financing platform can better meet the needs of international investors. In addition, H shares can provide more tools for the acquisition of companies in the future, and can further enhance the brand value of the company's internationalization.

Under normal circumstances, the Hong Kong market liquidity and P / E ratio valuation are lower than that of the mainland market. Opening the "A+H" dual financing platform, it is conducive to corporate valuation restoration and the increase in the liquidity of the secondary market.

Nuocheng Jianhua, as an unsuccessful innovation pharmaceutical company, has a heavy product approved to be listed. Compared with many unprofitable biological companies in Hong Kong stocks, the performance is relatively high. However, other products of the company are still in the early clinic, and they need to continue to invest high research and development costs. This time, it is necessary to continue to observe how Nuo Chengjian will develop in the future.

In the past period, a number of Hong Kong Stock Exchange innovative pharmaceutical companies such as Junshi Biological, Kangshino, and Baiji Shenzhou have successively launched the science and technology board to open the listing model of "A+H".Enterprises choose to list the list of difficulty in listing and the degree of smoothness, valuation level, internationalization needs, and supervision environment of investors' exit channels.Considering that many companies have business expansion and diversified investment in financing, H shares are still very important listing places.The science and technology board has a clear positioning in China, and has established a clear institutional guarantee for the listing financing of innovative biomedical companies, which has clear strategic significance.At present, the science and technology board has gathered a number of science and technology pharmaceutical companies that meet the national strategy, have key core technologies, and outstanding scientific and technological innovation capabilities.Therefore, in the future, the listing model of the two places of science and technology board+H shares may become the preferred way for innovative pharmaceutical companies.

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