20150731-招商证券_香港_-Biotech_powerhouse_in_the_emerging_industry__Initiate_with_BUY_35页_1mb

报告摘要

3SBio Investment Summary

Core Content

3SBio is a leading biotech company in China, specializing in the development, manufacturing, and marketing of biosimilar products across key therapeutic areas such as nephrology, oncology, and autoimmune diseases. The company is recognized for its strong R&D capabilities and a diversified product portfolio that includes both self-developed and acquired products.

Main Products

3SBio has two blockbuster products that significantly contribute to its revenue:

EPIAO (益比奥): The only rhEPO product approved by CFDA for three indications (CKD-related anemia, chemotherapy-induced anemia, and reduction of allogeneic blood transfusion in surgery patients). It holds a 43.6% market share in FY14 and is expected to grow by 20%/15%/15% in FY15E/16E/17E. EPIAO has a broad dosage range and is well-positioned for future growth due to expanding insurance coverage and increasing patient demand.
TPIAO (特比澳): The only commercialized rhTPO product in the world, approved for CIT and ITP. It has a strong growth trajectory with a CAGR of 45.4% from 2012 to 2014 and is expected to grow at a rate of over 30% in FY15E/16E/17E. TPIAO is protected by its unique glycosylated molecular structure, making it difficult for competitors to replicate.

Other Products

IV Iron Sucrose (蔗糖铁): Used for treating iron deficiency anemia, particularly in CKD patients. It has a market share of ~15% and competes with products from Nanjing Hengsheng Pharma and Shanxi Powerdone Pharma.
SEPO (赛博尔): An injectable rhEPO product acquired from Sciprogen. It is approved for CKD-related anemia and CIA, with a 10,000 IU dosage.
Sparin (赛博利): A low-molecular-weight heparin calcium used for anticoagulation, with fewer side effects than standard heparin.
Intefen (因特芬): A recombinant interferon alpha-2a for treating various cancers and viral infections.
Inleusin (英路因): A recombinant interleukin-2 for treating renal cell carcinoma and other conditions.

Business Model

3SBio employs a dual business model:

In-house sales and distribution: Used for core products like EPIAO and TPIAO, involving academic promotion and direct sales to hospitals.
Third-party agency model: Utilized for other products, leveraging a network of over 700 sales employees, 113 distributors, and 421 third-party promoters to cover 1,219 Grade III hospitals, 1,718 Grade II hospitals, and 521 clinics.

Pipeline and Innovation

3SBio has a robust pipeline of 20 product candidates, 14 of which are being developed as National Class I New Drugs. Key pipeline products include:

Nephrology: Cinacalcet hydrochloride, Sevelamer carbonate, Colestilan, NuPIAO, PEG-EPO, HIF-PH inhibitor, DJ5
Oncology: IAP inhibitor, PEG-Irinotecan, Bcl-2/xL inhibitor, Leukotuximab, Tanibirumab, DIG-KT
Autoimmune Diseases and Other Areas: Nadroparin calcium, Eltrombopag, Anti-TNF α mAb, Pegsiticase

The company has entered strategic collaborations with CP Guojian for mAb development and has acquired Sciprogen to expand its product line and market coverage.

Growth Catalysts

Market Expansion: Increasing hospital coverage and insurance reimbursement for core products.
Operational Efficiency: Improved operating efficiency and economies of scale are expected to enhance profitability.
Acquisitions: The acquisition of Zhejiang Wansheng has expanded the company's small molecule pipeline and entry into new therapeutic areas such as diabetes and dermatology. More acquisitions are anticipated to strengthen its market position.

Financial Prospects

Revenue Growth: EPIAO and TPIAO are expected to drive significant revenue growth in the coming years.
Margin Trends: The company has seen margin improvements due to operational efficiencies.
CAPEX and Forecasts: Capital expenditures are focused on facility maintenance and expansion, with a clear path to increased production capacity.

Risks

Price Erosion: The rhEPO market is mature, with potential price erosion from provincial tenders.
Competition: Newer alternatives like HIF-PH inhibitors and potential generic versions of Romiplostim and Eltrombopag could challenge TPIAO.
Market Penetration: Limited benefits from dialysis centers reform in lower-tier cities and hospitals.
Insurance Coverage: Limited NDRL coverage in non-nephrology departments may result in out-of-pocket expenses for patients.

Strategic Acquisitions

Sciprogen: Acquired in December 2014, adding SEPO and Sparin to the product portfolio and expanding into lower-tier hospitals.
Zhejiang Wansheng: Acquired to access small molecule pipeline and expand into new therapeutic areas.
CP Guojian: Strategic cooperation for mAb development and commercialization.

Industry Analysis

Biotech and Biosimilars Markets: Rapid growth driven by increasing demand for biosimilars and the expansion of the healthcare sector.
rhEPO Market in China: EPIAO is a market leader with strong growth potential due to rising CKD and cancer patient populations.
rhTPO Market in China: TPIAO dominates the market with no direct competitors, offering a unique advantage due to its molecular structure and patent protection.

Valuation and Outlook

3SBio is well-positioned for growth with a strong product pipeline and strategic acquisitions. The company's core products, EPIAO and TPIAO, are expected to continue driving revenue growth, supported by expanding insurance coverage and improved market penetration. The company's financial model shows promising bottom-line growth as operating efficiency improves and economies of scale are realized. Future growth is anticipated through continued innovation and strategic M&A activities.

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