GuShiio.com ① In the past three months, nearly 20 pharmaceutical companies have submitted listing applications to the Hong Kong Stock Exchange, including Real Biotech and Wangshan Wangshui, two former COVID-19 star pharmaceutical companies;
② The majority of the revenue of the two companies is still concentrated on the licensing or commercialization of COVID-19 related products. The current decline is serious and the cash flow provided is limited.
“Science and Technology Innovation Board Daily” February 25 (special reporter Gao Qing)As the investment boom in Hong Kong stocks surges, more and more pharmaceutical companies have begun to turn their attention to this once hot spot for biomedicine financing.
Recently, Real Biotech, a former COVID-19 special drug star company, and Suzhou Wangshanwang Aquatic Products Co., Ltd.(hereinafter referred to as “Wangshanwang Water”) have successively launched Hong Kong stock listing plans.
Against the backdrop of ebbing global demand for COVID-19 drugs, the two companies bucked the trend and rushed for Hong Kong stock IPOs, drawing market attention to the follow-up financing paths of pharmaceutical companies that had been popular with the epidemic dividends.
Du Fang, chief researcher of Gelonghui Pharmaceutical, told a reporter from the Science and Technology Innovation Board Daily thatMany innovative drug companies in the research and development stage go to Hong Kong to list and raise funds, many of which are to relieve the cash flow pressure required for research and development. The listing of Hong Kong stocks is less difficult and faster than that of A shares.
◇ Revenue pressure behind “listing in Hong Kong”
Judging from the prospectus announced by the two pharmaceutical companies, there is no lack of common ground. Although both have been commercialized,However, most of the revenue items are still concentrated on the licensing or commercialization of COVID-19 related products. The current decline is serious and the cash flow provided is limited.
Real Biotech’s current revenue products still come from the core product Azvudine. The drug was conditionally approved for marketing in July 2022, becoming the first domestically produced COVID-19 oral antiviral drug. During the peak epidemic period from the end of 2022 to the beginning of 2023, sales volume increased rapidly, and many places were included in the list of temporary procurement and primary medical institutions.
On the occasion of listing, Real Biotech announced that it had signed an exclusive commercialization strategic cooperation agreement with Fosun Pharma. In September 2024, the cooperation between the two parties was terminated. From 2023 to 2024, Real Biotech achieved revenue of approximately 344 million yuan and 238 million yuan respectively. In 2024, its performance dropped by 30.81% year-on-year. However, due to the significant drop in sales expenses, its net loss narrowed from 784 million yuan to around 400 million yuan.
The performance trend of Wangshan and Wangshui has also experienced a similar process of rising first and then falling. During the epidemic, most of Wangshan and Wangshui’s performance revenue was supported by the external authorization of its COVID-19 oral drug VV116 (trade name: Mindewei).
However, compared with drugs such as Azvudine, Mindevi’s product sales momentum is slightly insufficient because of its late launch date. Judging from the prospectus, Wangshan Wangshui achieved revenue of 200 million yuan and 9.996 million yuan in 2023 and the first nine months of 2024 respectively, of which external authorized revenue was 196 million yuan and 5.382 million yuan respectively, and realized a profit of approximately 6.43 million yuan and a loss of 156 million yuan.
As the COVID-19 epidemic gradually subsided, related drugs and vaccines have also ushered in a cliff-like decline. Both companies rely heavily on the revenue generated by COVID-19 related products, and inevitably encounter the problem of profitability sustainability. Listing in Hong Kong or their final way to replenish the “bullet”.
Du Fang mentioned that from the perspective of corporate business development, listing in Hong Kong can broaden the company’s financing channels, and the Hong Kong dollars obtained can make it more convenient for overseas investment and expansion, and can also hedge the risk of exchange rate fluctuations to a certain extent; From the perspective of the capital market, the investor composition of Hong Kong stocks is relatively diversified, and the proportion of overseas investors is relatively high, which is conducive to deepening overseas funds ‘understanding of the company, helping mainland companies to enter the international capital market and compete with large overseas companies.
◇ Take off the hat of “COVID-19 concept” and where is the future going?
Continuous cash flow is not only the production lines developed by innovative pharmaceutical companies, but also the foundation for ensuring their competitiveness. For Wangshan Wangshui and Real Biotech, two “COVID-19 star pharmaceutical companies”, how to prove their R & D strength again in the post-epidemic era is a difficult problem at hand.
In the fundraising plan for this IPO, Wangshan Wangshui mentioned that the fundraising will be used for “core product research and development and other candidate products.” In addition to continuing to develop multiple indications for VV116, Wangshan Wangshui’s approved products also include Dapoxetine, a generic drug for the treatment of PE (premature ejaculation), and Rebapat, a generic drug for the treatment of various gastrointestinal diseases. In the research pipeline, the company’s core product LV232 for the treatment of depression is currently in the Phase II clinical stage.
In addition to research and development progress,All of these types of products are facing increasingly fierce market competition, and breaking out of the circle will greatly test commercialization and marketing capabilities.
The fund-raising needs of real biology are anchored in Azfudine’s combination therapy, the company plans to continue to develop its application in the treatment of HIV infection and certain tumor indications, in addition to further building a research and development platform for working capital, etc. It can be seen from the prospectus that most of the existing real biological research pipelines are in pre-clinical or early stages.
In the past three months, the popularity of Hong Kong stock listings has not subsided, and nearly 20 pharmaceutical companies have submitted listing applications to the Hong Kong Stock Exchange.
Du Fang emphasized that in the future, the performance of pharmaceutical companies in the capital market still needs to be observed. On the one hand, changes in global liquidity, including long-term and long-term interest rates in the United States and China. Most companies in the Hong Kong stock market are beta markets, and liquidity is pushed up. It is a very important factor. The second is to observe whether individual stocks can make some new technological breakthroughs. In fact, there are also some long-term bull stocks among innovative drug companies in Hong Kong stocks. These companies with strong fundamentals can emerge from the independent market and are completely unaffected by the market.
The IPO journey of Real Biotech and Wangshan Wangshui is essentially a transformation attempt to restructure the strategic strategies of pharmaceutical companies in the post-epidemic era. Regarding the future direction, we must continue to inquire about the “innovation” strength of the two innovative pharmaceutical companies.
