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【技术产业】中国医药概念股(美国上市公司)报道
At this late stage of the China bubble, I’m looking around for great Chinese names with fair valuation. One such name is Tongjitang Chinese Medicines (TCM). Here are some of the reasons I think it will be a winner in the next decade:
1. “Tongjitang” is a Chinese name brand with more than a century-old history. The brand dates back to 1888, is known by many Chinese households, and was officially honored by the central government. Company CEO Mr. Wang Xiaochun was a career lawyer until 1997, when he bought Xianling Pharmaceutical. He clearly understood what’s in the name and merged Xianling with Tongjitang in the early 2000s under encouragement from the Guiyang city government.
2. Tongjitang’s flagship product Xianling Gubao [XLGB] has become a leading traditional Chinese medicine for treating osteoporosis as measured by revenue, according to a report by the SFDA-affiliated China Southern Medicine Economy Research Institute [SMERI]. SMERI estimated XLGB to have accounted for 70% of sales of traditional Chinese medicines for the treatment of osteoporosis from 2003 to 2005. SMERI also ranked XLGB No. 10 in terms of market share, at 0.74%, among all modernized Chinese medicines in seven leading Chinese cities’ hospital prescription market for the first half of 2006. That is, 0.74% of market for the thousands of all modernized Chinese medicines.
3. According to a recent report by China’s Xinhua news agency, over 11% of Chinese above age 20 suffer from osteoporosis and there are about 35M to 40M osteoporosis patients nationwide (read this Seeking Alpha post also). An earlier report from the same agency on 2003’s World Osteoporosis Day indicated that osteoporosis related fracture rate exceeded 9% and was on a trend to increase year over year. Interestingly, back then it put the osteoporosis patient population at an even more alarming 90M, or 7% of the entire Chinese population, making the world’s most populous county also the largest in terms of osteoporosis patients.
4. China's aging population translates into an increasing number of osteoporosis patients and more medical spending.
5. China’s phenomenal GDP growth is set to continue and every 1% of GDP growth is accompanied by approximately 1.7% growth of the medical and healthcare market.
6. Tongjitang’s XLGB, Zaoren Anshen Capsules, Moisturizing and Anti-itching Capsules and Dianbaizhu Syrup are in the national and provincial medicine catalogs of the National Medical Insurance Program. Participants in this program get 80 to 100% reimbursement for purchases of these medicines (from either hospitals or OTC stores). The Chinese government expects the enrollment in the National Medical Insurance Program to almost double to 300M by 2010, from 157M as of end of 2006.
7. Although XLGB is the company’s main revenue source (77% of total revenue as of FY 2006, 78% as of Q2 2007), TCM is not exactly a one-trick pony. It also has ten other SFDA-approved Chinese medicines in its portfolio. In Q2, sales from other core products (Zaoren Anshen Capsules, Moisturizing and Anti-itching Capsules and Dianbaizhu Syrup) increased 193% vs. XLGB’s 11%. Similar trends should continue in the future. There are also a couple of other traditional Chinese medicines (for treating depression, menstrual pain and anxiety) in different stages of clinical trial.
8. One of the key reasons Chinese pharmaceutical stocks remain attractively priced is due to the 20+ large-scale, drug-price-cutting campaigns mandated by the central government since 1997. However, the main targets of these price cuts have mostly been low-quality copycats. Government has consistently indicated willingness to protect high quality name brands, particularly top traditional Chinese medicines. The price cuts have not affected TCM’s products, while in July 2005 the 50-pack XLGB capsules actually got an 11.1% boost on price ceiling. I’m cautiously optimistic about the continuation of this discriminative policy in the future.
9. The company has a good OTC strategy. The Chinese OTC market has grown at an annual rate of over 20% in recent years. By 2010, its market size is expected to reach that of the United States in 1995. Compared to the hospital market, OTC market is also much less susceptible to the government’s price-cutting initiatives. Government actually encourages patients to purchase medicines from the OTC market as a way to decrease the medical insurance cost. Therefore, to a great extent OTC market serves as a safe harbor for pharmaceutical producers.
TCM has a strong sales force (of 500 as of March) targeting the OTC market. Revenues from the OTC market have brought in a higher gross margin to the company, compared to those generated from hospitals. So far the OTC market has made a significant contribution to TCM’s total revenue and its contribution is expected to increase further in the future.
10. XLGB promises to become the first ever FDA-approved traditional Chinese medicine, thus entering the U.S. market. TCM contracted Synarc to perform clinical study of XLGB as a drug for the treatment of osteoporosis in late 2005. Synarc co-founder, Chairman Emeritus and renowned authority in osteoporosis Mr. Harry K. Genant also serves on TCM’s board as an independent director. On Thursday, Oct. 25, China’s official newspaper People’s Daily republished a report by Health Times on a positive result from XLGB's efficacy and safety verification study by Synarc, in which centralized imaging and biochemical marker techniques were used. The randomized, double-blind, multi-center study lasted two years and has proved XLGB’s efficacy and safety for the treatment of post-menopause osteoporosis. XLGB has been found to inhibit bone resorption and increase bone density significantly. The study also found that simply taking calcium and vitamin D supplements does not have the beneficial effect of improving bone density. With this encouraging result, TCM can now begin the FDA regulatory submission process. According to the U.S. National Osteoporosis Foundation, osteoporosis is a major public health threat for an estimated 44 million Americans. Based on the positive efficacy and safety result, I feel the company might also begin regulatory processes in Europe and other regions as well sometime in the future.
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作者:admin@医学,生命科学 2011-02-27 05:11
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