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2019 Top four leading causes of death in China by year:

• Stroke: 20.55%

• Heart disease: 17.59%

• Chronic obstructive pulmonary disease (COPD): 9.74%

• Lung cancer: 7.10%

“Healthy China 2030” Calls for Inhaled Medications

Respiratory diseases are the third largest chronic disease in China, second only to cardiovascular and diabetes, with more than 1.6 100 million 10% of patients (total expected) receive standardized treatment, and there is a serious underestimation of the patient population. Academician Wang Chen's research shows that only 5.6% of asthma patients regularly use ICS 。

In the international market, asthma and COPD treatment drugs are mainly divided into 6 categories: short-acting β 2 agonists, inhaled corticosteroids, anticholinergics, combination preparations, long-acting β 2 agonists and expectorants. Due to the extremely high difficulty in imitating inhaled preparations, China's respiratory drug field is facing high technical barriers, high costs, and high risks “ bottleneck ” development bottlenecks, and the domestic inhaled preparation market is monopolized by multinational companies. 2018 Inhaled dosage forms for asthma and COPD in Chinese sample hospitals in the year, the import ratio is 93% above, and the domestic ratio is less than 7%。

“Healthy China 2030 ”In the newly added prevention and control action for chronic respiratory diseases in China, the state encourages the research and development and listing of complex drug inhaled preparations. In the domestic market, as of 2020 year, 5 inhaled preparation varieties have been approved. Healthy Yuan covers 4 varieties.

Products are numerous Who is leading in inhaled preparations?

Levosalbutamol is a short-acting β 2 agonist, with rapid onset of action, and is currently the most widely used drug in the clinic for the treatment of acute asthma attacks. Compared with salbutamol sulfate, levosalbutamol has higher purity, better efficacy, fewer side effects, and greater technical difficulty.

Because the dextrorotatory isomer that produces side effects is removed, levosalbutamol has better safety and is more advantageous for use in the elderly and children. The Guidelines for Standardized Diagnosis and Treatment of Childhood Bronchial Asthma ( 2020 version) and the Expert Consensus on the Integrated Chinese and Western Medicine Prevention and Treatment of Childhood Asthma ( 2020 version) recommend levosalbutamol as the first-line drug of choice for acute asthma attacks in children. Healthy Yuan's levosalbutamol is the first and only approved short-acting β-agonist in China.

Because levosalbutamol nebulization solution (Healthy Yuan) is the first domestically approved 3 class of chemical drugs, a major national science and technology project variety, the National Medical Insurance Bureau issued the new version of the "National Basic Medical Insurance, Work-related Injury Insurance and Maternity Insurance Drug Catalog ( 2020 year)" includes levosalbutamol hydrochloride nebulization solution (Healthy Yuan) ( 3ml:0.63mg/ vial, 3ml:0.31mg/ vial) in the "negotiated drugs within the agreement period" section of the "National Basic Medical Insurance, Work-related Injury Insurance and Maternity Insurance Drug Catalog".

Budesonide inhalation suspension was first developed and produced by AstraZeneca Company, 1991 first launched in the UK in the year, 2001 entered the Chinese market in the year, with specifications of 2ml:1mg 、 2ml:0.5mg . Currently, the companies that have successively approved large specifications are Healthy Yuan and Zhengda Tianqing. However, due to the high difficulty of the first imitation of the children's specification, currently only Healthy Yuan has been approved. Therefore, Healthy Yuan has become the only company to have approved both large and small specifications, which not only means that the company has mastered the technology of research and industrialization of high-difficulty inhaled suspensions, but also the technology of in vivo and in vitro consistency evaluation of nebulized inhalation preparations.

Tobramycin, the world's first inhaled antibiotic for the treatment of bronchiectasis. Clinically urgent, no available drugs, selected by Academician Zhong Nanshan. Systemic use of antibiotics to control airway infections usually cannot eliminate chronic airway infections, and systemic use of antibiotics has greater toxicity. Inhaled antibiotics can directly deliver high concentrations of drugs to the site of bronchial infection, reducing the need for high-concentration systemic administration and the problem of drug resistance.

Healthy Yuan's tobramycin inhalation solution is undergoing III phase clinical trials and is expected to become the first inhaled antibiotic drug in China. At the same time, this variety is also the world's first, clinically urgent, and has independent intellectual property rights 2 class of improved new drugs, which are antibacterial drugs and new inhaled preparations developed in response to the high incidence of bronchiectasis in China and the lack of clinical drugs. If approved as soon as 2022 year, it will enjoy exclusive rights 6 Patent protection period until 2028 year.

From levalbuterol nebulization solution, to various sizes of budesonide inhalation suspension, to III tobramycin inhalation solution currently in clinical trials, etc., Health Yuan's "first" and "exclusive" status is outstanding, and it has already taken the lead in the inhalation preparation industry. International market 6 major asthma and COPD therapeutic drugs, Health Yuan currently has full coverage.

According to publicly available information, Health Yuan has comprehensively deployed respiratory disease treatment products, with more than 40 research projects, covering drugs, instruments, inhalation devices, and evaluation and testing instruments. The key layout of inhalation preparations, the research and development progress is leading in China: clinical ( 8 ) items, application for production ( 5 ) items, submission of registration application ( 7 ) items, and ( 4 ) items have been approved 7 specifications.

Can inhalation preparations be both "well-received" and "popular"?

According to IQVIA sampling statistical estimation data, domestic budesonide inhalation suspension 2019 annual terminal sales amount is approximately RMB 56.32 billion yuan, which is the largest product used in the domestic respiratory department.

Take tobramycin as an example. Professor Qu Jieming, president of Ruijin Hospital affiliated to Shanghai Jiao Tong University, once CACP 2018 gave an authoritative explanation. A relatively rough estimate is that 1.2% ( 135/10811 ) of residents reported having been diagnosed with bronchiectasis. Currently, China does not have treatment guidelines for bronchiectasis, and bronchiectasis is easily misdiagnosed and missed, and the prevalence is greatly underestimated. Only according to 1.2% 's proportion, China 14 billion people, approximately nearly 1700 ten thousand people suffer from bronchiectasis, while the actual number of patients may be higher than this data. Referring to the sales price of US pharmacies as 135.36 dollars, conservatively estimated, the market space of this product exceeds 10 billion.

Another example is levalbuterol hydrochloride nebulization solution. Short-acting β 2 receptor agonists include inhaled salbutamol sulfate solution and terbutaline sulfate nebulization solution. According to IQVIA sampling statistical estimation data, the domestic inhaled salbutamol sulfate solution 2019 annual terminal sales amount is approximately 7.41 billion yuan, and terbutaline sulfate nebulization solution 2019 annual terminal sales amount is approximately 6.31 billion yuan.

Since its approval and listing, the sales revenue of Health Yuan's levalbuterol hydrochloride nebulization solution has been only about RMB 644.68 ten thousand yuan, mainly because this product has not been included in medical insurance before. Currently, this product has been included in medical insurance, becoming the only domestically produced inhalation preparation included in the "negotiated drugs during the agreement period" of the new version of the medical insurance catalog, with unlimited medical insurance payment categories, which will be conducive to the market promotion and future sales of this product. The huge advantage of levalbuterol over salbutamol sulfate may seize a large share of the market for similar salbutamol products. Market analysis believes that after market expansion and product iteration, sales are expected to reach 8 billion yuan or more.

Guosheng Securities stated in the annual report review of Health Yuan that new respiratory products have begun to contribute to performance, and the performance elasticity brought by the approval of the large variety budesonide is particularly noteworthy, and the respiratory R&D pipeline continues to advance.

From R&D realization to sales realization

In recent years, Health Yuan has adhered to the "technology + innovation" strategy, continuously focusing on product innovation, market innovation, and technological innovation. Health Yuan adheres to R&D-driven development, has created its own unique respiratory drug delivery technology platform and other characteristic and innovative R&D technology platforms, and continues to deploy in the field of inhalation preparations. After years of polishing, Health Yuan has formed a relatively focused and clear product R&D pipeline, and the inhalation preparation business has gradually entered the harvest period.

2020 year, Health Yuan's cumulative R&D investment reached 12.61 billion yuan, a year-on-year increase of 18.25% accounting for 9.32% of total revenue, with a total of 137 research and development products, including 41 complex reagents in chemical preparations.

2020 In the year, Health Yuan gradually entered the pipeline harvest period, with a total of 5 new products approved for listing, most of which are high-barrier complex preparations, including 3 inhalation preparations approved for 5 varieties ( 1 inhalation preparations approved for 2 specifications), and lipid microemulsions approved for

specifications), marking a major breakthrough in the company's R&D and industrialization in innovative drugs.

In addition to achieving success in the R&D pipeline, Health Yuan has also made new breakthroughs in intelligent drug delivery and improving the efficiency of respiratory treatment. In addition, the company is restructuring the industrial chain by building a digital big health ecosystem, creating a closed loop of digital health management, and conducting in-depth research in the respiratory disease segment, multi-dimensionally capturing user information, and accumulating effective data, laying a solid foundation for digital precision operation. 9 Large area and 7000 Yu Jia Hospital signed a deep cooperation agreement and established 1000 Multiple respiratory hotlines, supported by a professional sales team, and a sound sales management support system provide comprehensive services for academic promotion and professional marketing.

In addition, a long-term equity partnership plan has been launched. The plan is for ten years. The company uses the compound annual growth rate of net profit achieved each year 15% As a key performance indicator, it implements an incremental accrual of incentive funds for each period. It incentivizes outstanding talent and demonstrates the company's confidence in future growth.

Multi-segment risk resistance Steady happiness

After years of development, Jiankangyuan has become a comprehensive pharmaceutical company covering multiple fields, including health products, chemical preparations, traditional Chinese medicine preparations, chemical raw materials and intermediates, diagnostic reagents and equipment, etc. It has a complete industrial chain, and its products, including Chinese and Western medicine preparations, have long occupied the top positions in the national pharmaceutical preparation market.

2020 The year was a year of differentiation for pharmaceutical companies. Under the impact of the epidemic, the sales of most pharmaceutical companies were greatly affected in the first quarter, followed by the layered addition of regulatory policies such as volume-based procurement, medical insurance cost control, and key monitoring catalogs, leading the entire pharmaceutical industry to accelerate reshuffling.

However, only the gold remains after the storm. Jiankangyuan 2020 submitted an impressive financial report in the year. 2020 In the year, Jiankangyuan's main business achieved an increase in operating income of 12.97% . Among them, chemical preparations increased year-on-year by 8.44% ，chemical raw materials and intermediates increased year-on-year by 12.24% ，and diagnostic reagents and equipment increased year-on-year by 83.28% . Multi-segment risk resistance, when one door closes, another opens.

Lishui Group (excluding Lishui Monoclonal Antibody) contributed to the net profit attributable to the parent company 8.33 billion yuan; Lishui Monoclonal Antibody affected the net profit attributable to the parent company -1.61 billion yuan; Jiankangyuan (excluding Lishui Group and Lishui Monoclonal Antibody) net profit attributable to the parent company 4.48 billion yuan.

Among them, digestive drugs, anti-infective drugs, and gonadotropin drugs are the company's main advantageous products. In the future, the company will focus on innovative drugs and high-barrier complex preparations, and on the basis of its existing advantages, continuously strengthen the innovative research and development and business layout of respiratory, mental, and tumor immunity products.

The annual report shows that Jiankangyuan achieved operating income of 135.22 billion yuan and net profit attributable to shareholders of the listed company of 11.20 billion yuan. Jiankangyuan (excluding Lishui Group and Lishui Monoclonal Antibody) achieved operating income of 33.45 billion yuan, a year-on-year increase of 13.47% ; net profit attributable to shareholders of the listed company of 4.48 billion yuan, a year-on-year increase of 17.28% ; net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses of 4.28 billion yuan, a year-on-year increase of 15.99% 。

Guosheng Securities predicts that the company's 2021-2023 net profit attributable to the parent company will be 13.21 billion yuan, 15.69 billion yuan, 18.29 billion yuan, with growth rates of 17.9% 、 18.7% 、 16.6% . It is expected that the company's 2021 year's market capitalization will reach 500 billion. Among them, Lishui supports 266 billion in market capitalization, respiratory medicine supports 150 billion in market capitalization, and other parts support 80 billion in market capitalization.

If Lishui Group continues to contribute stable performance and the R&D of Lishui Monoclonal Antibody continues to advance, then the contribution of respiratory products to performance will undoubtedly raise the sails for Jiankangyuan's voyage, setting sail for the vast ocean!