According to the companys financial report, in 2017 and 2018, Beida Pharmaceutical realized business revenue of 1.026 billion yuan and 1.224 billion yuan respectively, of which Ektini contributed 1.026 billion yuan and 1.208 billion yuan respectively, accounting for 99.96% and 98.69% of the companys business income in that year, almost all of which were collected. Enter. Freezing three feet is not a days cold. Actually, since its launch in 2011, Ektinib has been almost the only source of revenue for Beida Pharmaceutical Industry; and the fastest-growing new drug in Beida Pharmaceutical Industry is Ensatinib Hydrochloride, an ALK inhibitor. The drug is in the current state of being applied for listing and entered the priority review process, and it is still a long way from listing. Leave. It can be seen that Beida Pharmaceutical has not changed the situation of dependence on individual products, and the fluctuation of Ektini price and sales will have a direct impact on the companys performance.
Ektinib is a small molecule targeted anticancer drug for non-small cell lung cancer. Its sales exceeded 1 billion yuan for the first time in 2016, and it is a rare billion-grade single product in the field of anti-cancer drugs in China. However, in recent years, the price of Ektini has been declining, and the pressure on sales revenue of Beida Pharmaceutical has gradually become prominent. According to the data of pharmacy intelligence, the price of Ektinib was higher before it was not included in health insurance, up to 3080 yuan per box. In 2015, Ektini participated in the first national drug purchase price negotiations. According to the results of the negotiations in May 2016, the purchase price of Ektini dropped to 1399 yuan per box, a drop of 54%. Two years later, in July 2018, Beida Pharmaceutical announced that the prices of Ektinis provincial networks were lowered again, from 1 399 yuan per box to 1 345.05 yuan per box, with a price drop of 53.95 yuan per box, or 3.86%. Since then, the winning price of 1345.05 yuan/box (packaging conversion ratio: 21) has been generally accepted. Since 2019, this price has been adopted by many provinces and cities, including Sichuan, Hubei and Jilin.
According to Wande statistics, the sales revenue of Exotini in Beida Pharmaceutical Industry increased from 307 million yuan to 913 million yuan in 2012-2015, with an annual compound growth rate of 43.8%. In the recent 2015, 2016, 2017 and 2018, the revenue of Exotini was 913 million yuan, 1.035 billion yuan, 1.126 billion yuan and 1.208 billion yuan, respectively. The compound growth rate was 9.78%, which was much lower than before. Correspondingly, the gross profit rate of Ektini products has been slightly declining for many years. From 2015 to 2018, the gross profit rate of Ektini products is 96.94%, 96.83%, 95.74% and 95.27%, respectively, which reflects to some extent the weakening of the profitability of the company by product price reduction. On the other hand, the gross profit of Ektini products at present is also weakening. The higher absolute value of the rate, or will attract more competitors to join the competition in this field. If the product competition in this field is further intensified in the future, it will have a negative impact on the sales of the companys products.
Ectinib is an EGFR targeted drug for lung cancer, and similar products are emerging in this field. According to Liu Yi, deputy director of lung cancer surgery, Tianjin Medical University General Hospital, there are three first generation molecular targeted drugs for EGFR in China, namely, gefitinib (trade name: Iressa) in 2005, erlotinib (trade name: Troche) in 2007 and Ektinib (trade name) in 2011. Name: Camena. The results of clinical trials at home and abroad in recent years show that the effects of these three targeted drugs are very similar. Iressa and Troche are both imported drugs, which are also affected by the negotiation of national drug purchase price.
According to pharmacological data, the price of gefitinib, originally developed by AstraZeneca, was more than 5,000 yuan per box. In May 2016, the price was reduced to 2,358 yuan per box, a decrease of about 55%. In December 2018, the price of gefitinib was reduced to 547 yuan per box (packaging conversion ratio: 10), a decrease of 76%.
In August 2016, Roche announced a 30% reduction in its Erlotinib price (the exact reduction may vary slightly depending on the underlying price differences) and in July 2019, the latest winning price for Erlotinib was 4008.6 yuan per box (packaging conversion ratio: 30). The relative prices of the three drugs can be calculated by dividing the lowest bid price by the packaging conversion ratio. According to the Red Week reporter, Gefitinib of AstraZeneca has a price advantage over Ektinib of Beida Pharmaceutical.
Because of the low price of generic drugs, the pressure of pricing similar products may quickly spread to the whole market. Compared with the developed countries, the second and third generation of domestic targeted drugs are late to market. Since 2017, the second generation of lung cancer targeting drugs, alfatinib (trade name: gettery), and the third generation of lung cancer targeting drugs, oxitinib (trade name: teresa), have been on the market in China. According to the clinical data disclosed at AACR and ASCO conferences, the second and third generation of lung cancer targeting drugs have more than the first generation. Certain clinical advantages. With the market competition in this field tending to be white-hot, whether Beida Pharmaceutical can maintain its existing market share is still unknown.
The entrepreneurship team split up
In recent years, Beida Pharmaceutical has been investing more and more in R&D. According to the financial report, the R&D investment of Beida Pharmaceutical in 2016, 2017 and 2018 was 162 million yuan, 381 million yuan and 590 million yuan respectively, accounting for 15.60%, 37.09% and 48.20% of the business income respectively. According to the data provided by Wande, its R&D investment in absolute amount can rank the 20th in the medical manufacturing industry classified by the SFC, and the proportion of R&D investment in business income can rank the first in the whole industry. It can be seen that the company attaches great importance to R&D investment, but it is surprising that since Ektini was listed in 2011, there has been no other product on the market, which may be related to the stability of the companys R&D team.
Since Beida Pharmaceutical went public in 2016, a number of senior executives, including co-founders of the company, have left their jobs in just two years, including senior executives responsible for R&D related work and important shareholders holding shares in the company.
In January 2017, Hu Shaojing, the chief chemist of Beida Pharmaceutical, resigned and was replaced by Wang Yinxiang, one of the companys founders. Wang Yinxiang, one of the founders of Beida Pharmaceutical Industry, is a postdoctoral Engineer in the Department of Molecular Biophysics and Biochemistry, Yale University and a doctor in biochemistry at the Medical College of the University of Arkansas in the United States. Wang Yinxiang still holds 23.425 million shares of Beida Pharmaceutical Company, holding 5.84%. He and Ding Ming, the chairman of the company, are the co-actual controllers of Beida Pharmaceutical Company. However, only half a year later, in August 2017, Wang Yinxiang announced his resignation for personal reasons. The reason given by Wang Yinxiang at the New Year Outlook Conference of Chinas Pharmaceutical Industry in January 2018 was interest issues. In addition, Tan Fenlai, the companys chief medical officer and the concerted actor of the companys accuser, resigned in March 2018 for personal reasons.
Before that, Zhang Xiaodong, the former vice chairman of the company, also left Beida Pharmaceutical. According to the prospectus of Beida Pharmaceuticals GEM listing, DONZHANG was a former director of Beida Pharmaceutical and resigned in May 2013. Zhang Xiaodong is one of the founders of Beida Pharmaceutical Industry. He is a doctor of medicine. He founded Beida Chemical Company in the United States, which is the original predecessor of Beida in the United States. Beta Pharma (Inc.) now holds a 3.57% stake in Beta Pharma. Zhang Xiaodong is the actual controller of the companys shareholder BETA and Shanghai Beida Pharmaceutical Co., Ltd. and also the object of the companys recent announcement of prosecution.
In the accounting treatment of R&D expenses, Beida Pharmaceutical has been abnormally capitalized in a relatively high proportion since 2017. In 2016, 2017 and 2018, the capitalization amount of R&D expenditure was 1849,000 yuan, 178,000 yuan and 286,000 yuan respectively, accounting for 0.11%, 46.74% and 48.53% of R&D investment respectively.
One of the benefits of capitalization of R&D expenditure is that it can reduce the companys current expenditure, thereby beautifying the net profit index. In 2014, 2015 and 2016, the capitalized R&D expenditure of Beida Pharmaceutical accounted for 1.17%, 0.76% and 0.05% of the current net profit respectively, while in 2017 and 2018, the capitalized R&D expenditure accounted for 70.94% and 175.11% respectively. In 2018, the amount of R&D expenditure capitalized exceeded the net profit of the company. That is to say, if Beida Pharmaceuticals R&D expenditure in 2018 is accounted for in accordance with the previous lower proportion, its performance in that year may be lost. Why did Beida Pharmaceutical change its consistent accounting treatment policy and make a large proportion of R&D investment capitalized for two consecutive years? Was it entering the substantive stage of R&D, about to launch R&D results, or was it intentionally beautifying net profits? It is necessary for the company to give a reasonable explanation for this.
In addition, it is worrying that Beida Pharmaceutical still relies on government subsidies for its performance. According to the companys financial report, in 2016, 2017 and 2018, the amount of government subsidies included in the current profits and losses of the company were 59.0449 million yuan, 41.0644 million yuan and 29.8619 million yuan, accounting for 19.36%, 20.60% and 21.52% of the net profits of the shareholders of the parent company after deduction. It can be seen that government subsidies account for a large proportion of the companys profits. If the strength of government support in the future decreases, subsidies decline or even cancel completely, it may have a negative impact on the companys operating performance.