Behind Hengrui's "1.5 % off stock": How can domestic pharmaceutical companies break through the innovative dilemma of performance support?

The 21st Century Business Herald reporter Ji Yuanyuan reported to enter 2022. Under the influence of multiple uncertain factors, the biomedical capital market has cool down significantly. Many pharmaceutical companies have begun to adjust the preparation of "winter". When the stock price has been falling, it has made new response strategies.

Recently, an announcement of Hengrui Pharmaceutical's equity incentive plan has aroused market attention. According to the announcement, the number of employees' shareholding plans to be transferred to the company to repurchase shares does not exceed 12 million shares (including reserved shares). After the employee shareholding plan is established, it is planned to use non -transaction transfer to transfer companies to repurchase special securities for repurchase special securities. The shares held in the account are 15%of the company's average stock price for the company. This means that Hengrui will "issue stocks" at 1.5 % off. The average repurchase price is 29.37 yuan/share. According to the estimates of the industry, the transfer price is about 4.41 yuan.

In response to this incident, there are chief analysts in the pharmaceutical industry of the securities institution in an interview with the 21st Century Business Herald that since the third quarter of 2021, due to factors such as domestic products reduced prices and epidemic conditions, many pharmaceutical companies have been impacted. The market value of pharmaceutical head companies has also been adjusted. On the whole, the valuation logic system of pharmaceutical companies has changed, which has also led to the continuous phenomenon of breaking and stock price decline in newly listed pharmaceutical stocks. "The 1.5 % discount stock is also to cope with the increasingly complex internal and external environmental impacts." The analyst pointed out.

However, some investors believe that Hengrui Pharmaceutical's move is to output profits to shareholders in disguise.

"Fractive price" issuing stock Hengrui is not the first person

For a long time, equity incentives are important measures for the interests of employees, shareholders and companies, supplementary funds, improve the company's governance structure, reduce costs, and improve the salary system. Before Hengrui, Jiu'an Medical took the lead in making a 1.2 % discount to employees to send stocks, and the practice of Jiu'an Medical was considered to be a wedding dress for executives.

According to the "Proposal on Giving Stock Options for Stock Intocended Objects" issued by Jiu'an Medical on January 4, 2022, the board of directors believes that the grant conditions stipulated in the stock options incentive plan have matured, and the consent to meet the grant conditions The 353 incentive objects were awarded 7.37 million stock options. The authorization date is January 4, 2022. The exercise price of the stock options awarded the stock option was 6.49 yuan/share.

The incentive plan is valid for a maximum of more than 64 months, and divided into four exercise periods. The first phase of the stock options can start exercise after 16 months from the date of granting. In this equity incentive plan, the number of stock options awarded by manager and director -level personnel at the highest number reached 2.825 million, accounting for 38.33%, accounting for 0.5869%of the total share capital of the listed company, followed by backbone employees and core employees, prominent employees to highlight employees ; Directors, deputy general managers Wang Yong, and deputy general manager Cong Ming were awarded 75,000 copies; the chief financial officer Sun Yan and the secretary of the board of directors, Wu Tong, were awarded 25,000 copies, and the total shares were awarded 1.531% of the above -mentioned personnel. Essence

Without a year of thought, Hengrui, a leader of innovative pharmaceutical companies, also issued an announcement that the employee holding plan's transfer price was 15%of the company's average stock price. Buy company stocks.

According to the announcement, the participation of the Hengrui employee shareholding plan is the company's directors (excluding independent directors), supervisors, senior managers, company and holding subsidiaries core managers, backbone employees and company board of directors who believe that they should be motivated to motivate The total number does not exceed 1158 (excluding shares).

In addition, Hengrui's shareholding plan needs to meet a certain assessment requirements when unlocking. The performance assessment only involves the level of innovation medicine. The assessment year is 2022-2024, and the unlocking is divided into three phases. The proportion of underlying stocks unlocked each period is 40%, 30%, and 30%, respectively. in particular:

The first batch of unlocking conditions are: the company's innovative drug revenue of more than 8.5 billion yuan (including the number) in 2022, the number of new molecular entities approved by IND (including the number), and the number of NDA applications (including new indications) for innovative drug declaration acceptance (including new indications) More than 6 or more (including the number).

The second batch of unlocking conditions are: the company's innovative drug revenue reached 10.5 billion yuan in 2023, 11 new molecular entities approved by IND reached 11, and 7 innovative drug NDA applications (including new indications) approved and accepted.

The third batch of unlocking conditions are: the company's innovative drug revenue reached 13 billion yuan in 2024, 12 new molecular entities approved by IND, and 8 applications for innovative drugs (including new indications) for innovative drugs declared and accepted.

"From the perspective of the pipelines of the current research enterprise, according to the market standards, most of them have no real innovation." The above analysts believe that in the current market environment, Chinese innovative pharmaceutical companies represented by Hengrui must on the one hand. Really increase your own new drug research and development capabilities, avoid the phenomenon of targeting, and do real innovation; on the other hand, in terms of capital control, commercial monetization is the way of long -term development, so enterprises should consider their own commercial model as soon as possible And strategy.

Can "issue stocks" solve performance pressure?

Focusing innovation has become the main direction of Hengrui's current aiming, which is also one of the breakthroughs for performance for performance. The financial statement is equivalent to the "physical examination form", which can best reflect the health of a company. According to Hengrui Pharmaceutical's release of the performance report in the first half of 2022, the company achieved operating income of 10.228 billion yuan in the first half of the year, and the net profit attributable to the mother was 2.119 billion yuan, which was year -on -year respectively. Fall 23.08%and 20.55%. Hengrui Pharmaceutical said that the cliff -like decline of the income of generic drugs, the implementation of a new medical insurance negotiation price of multiple innovative drugs, and the domestic epidemic situation has impacted the company's product sales, resulting in a significant decline in the company's income. The impact on profit also includes the continuous rise in major raw and auxiliary materials and energy prices, the continued rise in logistics costs, and the continued increase in the continued increase in R & D investment. During the reporting period, the company's cumulative R & D investment reached 2.909 billion yuan, an increase of 12.74%year -on -year, and the proportion of R & D investment accounted for sales revenue to a record high of 28.44%year -on -year, of which the cost of R & D investment was 2.184 billion yuan. R & D expenses accounted for sales revenue The proportion increased to 21.36%year -on -year.

Increasing investment in innovation R & D is also in line with the direction of most currently innovative pharmaceutical companies. According to KPMG's "White Paper Development of China Innovation Pharmaceutical Companies in 2022", although my country's innovative drug industry has made great breakthroughs in recent years, it has become the second echelon of global innovative drugs, but overall The industrial transformation of innovative drugs has just begun, so the development of innovative drug research and development ecology has not yet matured. There is a lot of room for enhancement from enterprises to R & D institutions to the entire field of innovative drugs in the government. R & D ecosystem.

At the corporate level, in general, domestic innovative pharmaceutical companies have relatively few R & D investment. R & D investment is an important indicator of the research and development level of innovative pharmaceutical companies. Through the statistics of the research and development costs of TOP50 companies in the pharmaceutical industry in 2021, my country's leading enterprises such as Hengrui Pharmaceutical, China Bio, and Stone Medicine Group account for 17.9%, 12.0%, and 11.8%, respectively, and sales and sales. Pfizer (R & D account for 19.2%), the second -ranked Albervi (R & D proportion), and the third ranking (R & D to 17.7%) accounted for The level that can catch up with some international leading multinational pharmaceutical companies, it can be said that my country's pharmaceutical companies attach great importance to R & D. It is comparable to leading multinational pharmaceutical companies. Although the proportion of R & D costs is not large, the absolute value of R & D expenses for domestic pharmaceutical companies is far from foreign multinational pharmaceutical companies.

Yu Zilong, the partner of the KPMG China Life Sciences Industry, said in an interview with the 21st Century Business Herald that many companies did not do a good job of production lines during early research and development, which led to targets. In addition, coupled with the negotiations after listing, and collection, if the enterprise does not have an agile commercialization strategy to cope with the competition situation, the needs of doctors and patients, and policy changes, it will face severe challenges.

At the same time, in terms of product pipeline layout, pharmaceutical companies either do it to update or do it faster, better, or differentiated, or have clinical value to find their own market position. In addition, in terms of talent management layout, with the increase of future listing varieties, products will pay more attention to the development of the market and enter the medical insurance catalog. This will require more operating talents with relevant experience. "For the change of talent needs, talent battle may be launched. In this context, if pharmaceutical companies want to catch talents, they must continue to increase their talents in the recruitment and training of talents." Yu Zilong said.

The Innovation Pharmaceutical Companies behind the "issue of stocks"

At the same time as innovative R & D investment, how to increase the popularity of the capital market for innovative drugs has also become the direction of the current focus of Chinese biomedicine. Especially in mid -2021, the secondary market bubble ruptured, the value system was reconstructed, and projects and investors became more and more rational. By 2022, new drug financing still maintains a downward trend.

According to Deloitte China released the review of the Chinese and Hong Kong new stock markets in the first three quarters of 2022, as well as the forecast of the two places in 2022. The report pointed out that according to the current data and estimated figures, according to the financing amount as of September 30, 2022, the Shanghai Stock Exchange and the Shenzhen Stock Exchange will continue to rank the chief and second of the global new stock financing rankings. Mainland new stock market activities accelerated in the third quarter of 2022. Therefore, compared with the same period last year, the amount of new shares in the first three quarters of 2022 increased, but the number of new shares decreased.

At the same time as the number of new shares is declining, affected by the transformation of policy and market attitudes, the popularity of the secondary market on innovative drugs is also decreasing. Since July 2021, the situation of the 50 index of Hang Seng, Shanghai, Shenzhen, and Hong Kong, and the Biotechnology 50 has shown a significant decline. From December 31st, 2020 to April 29, 2022, Hang Seng, Shanghai -Shenzhen -Shenzhen -Hong Kongtong Biotechnology 50 Index has fallen by 30%. The stock price of pharmaceutical companies has fallen rapidly, and even some companies directly cut off, and the introduction of the CDE policy behind and the market's attitude towards License in is inseparable.

In November last year, the Pharmaceutical Examination Center of the State Drug Administration released the "Principles of the Clinical R & D Guidance of Anti -tumor Drugs with Clinical Value". The clinical data standards submitted by pharmaceutical companies in the future are based on the best tumor innovation drugs in the market. The introduction of the CDE policy shows that the government has begun to attach importance to the status quo of domestic ME-TOO innovative drugs, squeeze the bubble of innovative drugs, and promote the selection of more high-quality FIRST-in-CLASS drugs. The tightening of drug policies has greatly declined the market's expectations for innovative pharmaceutical companies. In addition, from the performance of the first -level market, the reform of the Hong Kong Stock Exchange in 2018 and the opening of the Science and Technology Board of the Shanghai Stock Exchange in 2019 have changed the financing environment of the pharmaceutical industry and set off a wave of IPO listing. However, in the past two years, the pharmaceutical market environment has been weakened, the pharmaceutical industry has turned cold, entering the cold winter stage, and new stocks have frequently broke. Especially since 2021, the proportion of IPO pharmaceutical companies has increased significantly. In 2021, the number of IPO pharmaceutical companies broke 10, and the broken enterprises accounted for 42%of the IPO of that year, an increase of 20%from 22%in 2018. The reason for the frequent IPO of innovative pharmaceutical companies is that the previous market was too optimistic about the enterprise, which led to too high valuations for innovative pharmaceutical projects. The pricing of new shares was too high, resulting in many new pharmaceutical stocks.

"In any era, there are challenges and opportunities. We believe that with the country's emphasis on the development of life science and the improvement of China's innovation capabilities, any company with core competitiveness has good development opportunities." Yu Zilonglong It is pointed out that if a company wants to achieve long -term success, it is necessary to find the right R & D direction, but also have strong funds, talents and interbank cooperation capabilities. Among them, the project is very important. Pharmaceutical companies should specifically consider the company's actual conditions and development strategies to choose the way suitable for them. In addition, talents are also the core elements that determine the success of the enterprise. How to attract more and more professional talents in competition will become a compulsory course for companies in the rising industry.

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