A new round of integration in the pharmaceutical industry is about to begin!
Recently, the State Food and Drug Administration released a new version of GMP (Good Manufacturing Practice), which will be officially implemented on March 1, 2011, announcing the beginning of a new round of integration in the pharmaceutical industry. Many industry insiders also said that the implementation of the new version of GMP will be conducive to integrating with international standards and accelerating my country's pharmaceutical production to gain international recognition. Among them, medical equipment and other three types of pharmaceutical companies may stand out and become bigger and stronger during the five-year transition period. In the new round of survival of the fittest in the pharmaceutical industry, how to seize the opportunities? The reporter conducted an investigation.
Recently, after five years of revision and two public solicitations for opinions, the "Good Manufacturing Practice for Pharmaceutical Products (2010 Revision)" was finally unveiled. In accordance with the requirements of the State Food and Drug Administration, starting from March 1 this year, new domestic pharmaceutical manufacturers and newly built (renovated and expanded) workshops of pharmaceutical manufacturers should comply with the requirements of the new version of GMP.
The old version of GMP was announced in 1999. During the five-year transition period to 2004, 1,340 of the country's 5,071 pharmaceutical companies were suspended. The implementation of the new version of GMP will once again catalyze the survival of the fittest in the entire pharmaceutical industry.
GMP has always been the basic principle that must be followed in international pharmaceutical production and quality management. Our country has implemented GMP since 1999, but in the past 10 years, the results achieved have been mediocre. At present, there are more than 4,700 chemical raw material pharmaceuticals and pharmaceutical preparation manufacturers in my country. Generally speaking, they present a pattern of many, small, scattered, and low production. The problems of low production concentration and insufficient independent innovation capabilities still exist.
Sun Xianze, the main person in charge of the Safety Supervision Department of the Food and Drug Administration, said that revising my country's GMP and improving the level of GMP implementation will help promote the survival of the fittest, mergers and reorganizations, and make enterprises bigger and stronger, further adjust the layout of enterprises, purify the pharmaceutical market, prevent vicious competition, and also provide guarantees. People’s needs for drug safety.
Compared with the old version of GMP, the new version of GMP presents four major characteristics. Gu Pengxiao believes that the new version of GMP has been greatly improved compared to the 1998 version, further raising the industry threshold and reflecting international standards. It has four main characteristics: first, it strengthens the construction of the pharmaceutical production quality management system; The requirements for enterprise quality management software have been greatly improved; secondly, the quality requirements for employees have been comprehensively strengthened, the terms and content of the quality requirements for personnel engaged in pharmaceutical production quality management have been added, and responsibilities have been further clarified; thirdly, operating procedures have been refined, The regulations on document management such as production records have increased guidance and operability; finally, drug safety measures have been further improved.
CITIC Securities also believes that the main difference between the new version of GMP and the old version of GMP is that the hardware of sterile preparations has been greatly improved, and more emphasis is placed on sterility and purification requirements in the production process; in terms of soft management, personnel management, deviation handling, quality Reviews, etc. have been greatly improved.
In addition to the four significant features, the new version of GMP also extends the enterprise's transition period from 3 years to 5 years. CITIC Securities stated that in the last round of GMP reform, the pharmaceutical industry was not greatly affected. Considering that the investment scale of the new version of GMP reform is much smaller than the cost of the previous version of GMP reform, and the revenue scale of the pharmaceutical industry is much larger than that of 2004, it is expected that the new version of GMP reform will The impact of GMP on the pharmaceutical industry will be far less than the previous round.
The overall impact may be small, but the driving force of the new version of GMP on the industry cannot be denied. Ge Zheng, a pharmaceutical industry analyst at GF Securities, recently said that in order to increase their competitiveness in overseas markets, large domestic pharmaceutical companies have begun to apply for higher-standard U.S. FDA certification for their production lines. Passing GMP certification does not require the investment of additional equipment. The new version of GMP affects small and medium-sized pharmaceutical companies.
Pharmaceutical equipment benefits the most
"In order to ensure the quality and safety of sterile drugs, the new version of GMP adopts the latest A, B, C, and D classification standards of the World Health Organization and the European Union in the sterile drug appendix, and puts forward specific requirements for the cleanliness level of sterile drug production. ; Added requirements for online monitoring, especially for static and dynamic monitoring of suspended particles in the production environment, and detailed regulations for the monitoring of microorganisms and surface microorganisms in the production environment." This is the new version of GMP on improving hardware Partial requirements.
Industry insiders said that the new regulations have indeed raised the requirements for purification and sterility much higher than before. If a company does not have similar equipment, it will indeed increase investment, especially for freeze-drying production lines with higher purification levels. Once this requirement comes out, it will have long-term benefits for the domestic pharmaceutical equipment industry in the future.
Xiangcai Securities analyzed that with the introduction of the new version of GMP, pharmaceutical companies will surely set off a wave of technological transformation. According to the regulations of the State Food and Drug Administration, after the implementation of the new version of GMP, new pharmaceutical companies will be certified as required, and pharmaceutical companies that have already passed certification will be given a 3-year certification transition period (the transition period for essential drugs and injection varieties is 2 years). Therefore, the pharmaceutical machinery industry will also usher in a three-year peak of prosperity. Specifically, in terms of hardware modification, the biggest change in the new version of GMP is the cleanliness requirements, so manufacturers of air purification equipment will benefit. Only Xinhua Medical among the A-shares has this business. As China's leading company in disinfection and sterilization equipment, Xinhua Medical holds about 60% of the market share. Secondly, for the transformation of injection pharmaceutical companies with the highest risk, we recommend pharmaceutical sterilization equipment and non-PVC large infusion production line leaders such as Qianshan Pharmaceutical Machinery, Xinhua Medical and freeze dryer leader Tofflon.
In fact, when the new version of GMP was announced, Xinhua Medical and Tofflon were favored by the market. Xinhua Medical rose by 14.12% in three trading days, while Tofflon took advantage of the "dongfeng" to hit a new share price of 95.08 yuan since its listing.
In addition to pharmaceutical equipment, another category that has benefited greatly is pharmaceutical export companies and current leaders in some sub-industries, such as Kelun Pharmaceutical, etc.
CITIC Securities believes that the new version of GMP is in line with international standards, making domestically produced pharmaceutical products more easily recognized by foreign countries and conducive to product exports. Some domestic pharmaceutical companies have begun to take the road of internationalization, and investors are advised to pay attention to companies such as Hengrui Pharmaceuticals.
Market participants said that it is not difficult to see that the purpose of the implementation of the new version of GMP is in principle to be in line with international standards, making it easier for domestically produced pharmaceutical products to obtain foreign recognition, which will facilitate the export of domestic pharmaceutical companies' products. For example, the production line has reached international standards. of Hisun Pharmaceuticals.
In addition, the increasing concentration of the pharmaceutical market is also a boon to large companies with larger scales and better profits. CITIC Securities said that judging from the experience from 1996 to 2006, the first few years of the implementation of GMP were also the years when there were fewer new pharmaceutical companies. It is expected that strict GMP implementation will raise the entry threshold for pharmaceutical companies and increase the number of pharmaceutical companies. Operating expenses will help eliminate smaller and less profitable companies, and help increase the concentration of pharmaceutical companies; in the long term, they will be beneficial to leading pharmaceutical companies, especially innovative pharmaceutical companies with high gross profit margins. It's a good thing. Changjiang Securities also stated that the standards for sterile preparations in the new version of GMP have been greatly improved, and some small and medium-sized enterprises will be eliminated because they cannot afford the transformation costs. However, large and powerful industry leading companies will be conducive to further expanding market share. It is recommended to pay attention to large companies. Infusion faucet Kelun Pharmaceutical.
As of yesterday's close, there are only 7 listed companies in the pharmaceutical sector with a total market value of more than 30 billion yuan, including Hepalink, Shanghai Pharmaceuticals, Yunnan Baiyao, Hengrui Pharmaceuticals, Kelun Pharmaceuticals, Kangmei Pharmaceuticals and Dong'e Ejiao.
In the next few years, these companies may be able to ride on the "east wind" to accelerate their development.
After the implementation of the new regulations, how should investors grasp the beneficial stocks in the secondary market?
A private equity source in Shenzhen who asked not to be named told reporters, “The hype around this big policy topic is just like the regional planning at the end of 2008 and early 2009 and the current 12th Five-Year Plan. To grasp this topic, do not exchange shares frequently. We must focus on long-term holdings and choose companies with good quality and good growth potential. On the other hand, in addition to the implementation of the new version of GMP, the General Office of the State Council also recently issued the "Main Work Arrangements for Issuing the Five Key Reforms of the Medical and Health System in 2011" "Notice", as the 12th Five-Year Plan for Biomedicine is about to come out, in the next few years, there will definitely be big bull stocks in the pharmaceutical industry. It is recommended that investors choose good targets and focus on long-term holdings.
Tianxiangtougu also believes that the promulgation of the new version of pharmaceutical GMP will have limited negative impact on listed companies. In terms of GMP equipment upgrades, it is recommended to pay attention to stocks that benefit from the new GMP standards’ increased requirements for sterilization and purification, such as Tofflon, a manufacturer of freeze-dryers that are “tailor-made” for the new version of GMP, and Tofflon, which is at the forefront of domestic innovative drugs. Hengrui Medicine, etc.
On the other hand, as an important step in the new medical reform, the national essential medicine system is currently being implemented nationwide, and the implementation of the provincial unified bidding system has made it even more urgent for essential medicine manufacturers to complete the transformation in advance with reference to the new version of GMP standards. It is expected that in the next one or two Essential drug manufacturers may face more cost pressure in investing in GMP transformation during the year. At the same time, due to the slow progress in establishing a long-acting compensation mechanism for essential drugs, we are cautious about investment in essential drug companies. In terms of basic drugs, it is recommended to pay attention to Kelun Pharmaceutical and Shuanghe Pharmaceutical, which have stable performance and obvious scale advantages.
