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Recently, the Ministry of Industry and Information Technology and eight other departments jointly issued the "14th Five-Year Plan for the Development of the Pharmaceutical Industry" (hereinafter referred to as the "Plan"), which sets out development goals for the next 5 years and a long-term vision for the next 15 years.

　　Looking ahead to 2035, China's pharmaceutical industry will see a significant overall leap in strength; an innovation-driven development pattern will be fully formed, with an increase in original innovative drugs and "leading" products, becoming a major source of pharmaceutical innovation in the world; the industry's competitive advantages will be prominent, with industrial structure upgrades, occupying an important position in the global pharmaceutical industry chain; a wide variety of high-quality products will meet the health needs of the people at a higher level, providing a solid foundation for the comprehensive construction of a healthy China.

　　The effects of innovation-driven transformation are becoming apparent. R&D investment across the industry will increase by more than 10% annually; by 2025, the proportion of sales of innovative products in the total increase in industry revenue will further increase. This means that companies with their own scientific research and innovation capabilities will receive more attention and resources.

　　The 14th Five-Year Plan clearly identifies key technological issues that need to be addressed in the pharmaceutical industry. This 10% increase in R&D investment will be allocated to two areas: innovative products and key technologies for industrialization.

　　A survey by Founder Securities shows that the R&D expenses of 170 A-share listed pharmaceutical companies in the sample increased from 21.46 billion yuan in 2017 to 44.06 billion yuan in 2020. In 2020, 33 listed pharmaceutical companies had total R&D expenditures exceeding 500 million yuan, and 8 exceeding 1 billion yuan.

　　Based on the 2020 annual reports of Hong Kong and A-share listed companies, HealthGen (stock code: 600380) currently ranks 12th in R&D investment in the pharmaceutical industry, 6th among A-share listed pharmaceutical companies, and second only to Kolon Pharmaceutical among pharmaceutical companies.

　　HealthGen's layout covers multiple fields, including chemical preparations, traditional Chinese medicine preparations, chemical raw materials and intermediates, health products, diagnostic reagents and equipment, etc. It is an innovative R&D-oriented comprehensive pharmaceutical group with high-barrier preparation and innovative drug platform technologies.

　　In 2020, HealthGen's R&D investment amounted to 1.261 billion yuan, an increase of 18.25% year-on-year, accounting for 9.32% of revenue. The average R&D investment of comparable companies in the same industry was 703 million yuan. HealthGen's R&D investment remained at a high level in the industry. In the first half of 2021, HealthGen's R&D expenses were 623 million yuan, a year-on-year increase of 67.23%.

　　Talent competition is also an important aspect. In October 2021, the "2021 First Half-Year Report on Biopharmaceutical Talent Recruitment" released by Liepin showed that the demand for talent in the biopharmaceutical industry has been increasing since the COVID-19 epidemic, with 62.2% of recruitment offering annual salaries between 100,000 and 400,000 yuan, and newly created positions in the vaccine sector increasing by 72.92% year-on-year.

　　Statistics show that HealthGen's R&D investment has continued to grow in recent years, with its proportion of operating revenue consistently remaining above 5%, which is at a high level in the industry. According to HealthGen's disclosure, in 2019, HealthGen's R&D investment was 1.066 billion yuan, a year-on-year increase of 27.83%, with R&D investment accounting for 8.90%; in 2018, the group's total R&D investment was 854 million yuan, an increase of 21.15%, accounting for 7.62% of operating revenue; in 2017, HealthGen's R&D investment was 704 million yuan, a year-on-year increase of 15.76%, accounting for 6.54% of operating revenue; and in 2016, HealthGen's R&D investment was 609 million yuan, a year-on-year increase of 22.81%, accounting for 6.26% of operating revenue.

　　HealthGen 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 expand its layout in the field of inhalation preparations. After years of refinement, HealthGen has formed a relatively focused and clear product R&D pipeline, and its inhalation preparation business is gradually entering the harvest period. The continuously increasing R&D investment has not only strengthened HealthGen's leading position in respiratory inhalation preparations but has also allowed HealthGen's business pipeline to blossom in multiple areas.

　　Recently, HealthGen announced that the "Recombinant Novel Coronavirus Fusion Protein Vaccine" (hereinafter referred to as: V01), developed by Lizhu Monoclonal Antibody, has completed the interim primary data analysis of the Phase III clinical trial for sequential booster immunization and obtained key data. Lizhu Monoclonal Antibody is a subsidiary of Lizhu Group, which is controlled by HealthGen.

　　V-01 was jointly developed by Lizhu Monoclonal Antibody and the Institute of Biophysics, Chinese Academy of Sciences. It uses innovative molecular design and has independent intellectual property rights. Based on a mature advanced technology platform for the development of recombinant protein vaccines, it can quickly develop variant vaccines. Research and development of vaccines targeting the Omicron variant have already been initiated. The excellent vaccine platform technology of the Chinese Academy of Sciences' high-tech transformation can quickly develop vaccines targeting variant viruses.

　　The absolute protective efficacy of the V-01 sequential booster immunization has met WHO standards. Genotyping sequencing of 60 samples of the novel coronavirus in this trial all showed Omicron (the rest are still undergoing next-generation sequencing), indicating that V-01 sequential booster immunization can provide good protection against COVID-19 caused by Omicron infection. At the same time, no safety concerns of note were found.

　　To date, Lizhu Monoclonal Antibody has accumulated approximately RMB 50.94 million in direct R&D expenses for the V-01 project (including Phase I/II clinical trials, sequential booster and basic immunization Phase III clinical trials, etc.).

　　In order to adapt to changes in medical reform policies and new industry development trends, the company is actively accelerating the R&D and global layout of innovative drugs and high-barrier complex preparations. The advancement of V-01 has important strategic significance. On the one hand, as the company's first vaccine product under the new recombinant protein technology platform, V-01 enables the company to quickly enter and lay out the vaccine field, and more vaccine products will be developed in the future. On the other hand, as the first product to conduct Phase III multicenter clinical trials globally, the smooth progress of the Phase III trial has also accumulated more and richer resources and experience for the company's subsequent internationalization of innovative drugs and more drugs conducting global multicenter clinical trials in terms of organizational management, partners, team capabilities, and registration applications.

　　Data from the fourth-quarter fund reports show that 12 funds disclosed that HealthGen was among their top ten holdings in the fourth quarter, an increase of 7 from the previous quarter. A total of 5.8471 million shares were held, a quarter-on-quarter increase of 26.24%.

Source: China Economic Net