Livzon Group (000513): Ap Talks Announces Victory for Medical Insurance

Livzon Group (000513): Ap Talks Announces Victory for Medical Insurance

Aipu injections are coming soon, with a target price of 38.


12 yuan, maintain “Buy” rating On November 28, the National Medical Insurance Bureau announced the results of the medical insurance negotiations, Aipu injections were successfully replaced, trying to meet the broad market volume with relatively modest price reductions (Aipu injections price reduction).

1% vs. 70 new drugs has an average decrease of 60.


The company’s ilaprazole 9M19 achieved sales revenue7.

$ 5.4 billion (Yoy + 67.

2%), of which injections realized revenue of about 7 million yuan, and medical insurance promoted growth to continue to accelerate, we maintained 19 years of EPS 1.

36 yuan, up 20-21 EPS to 1.


87 yuan (previously was 1.)


Profit forecast of 82 yuan), giving a divisor range of 24-26 times over 20 years (considering that the company’s existing pipeline collection risk is relatively small, and Aipu Medical Insurance Swap is about to give 10-20% on a comparable company’s 20-year average of 22 timesPremium), target price 38.


12 yuan, maintain BUY rating.

  Aipu injection: The decline is relatively mild, and the price-for-value exchange space is large. We think that Aipu injection has entered medical insurance this time, and there are great opportunities for replacement among PPI drugs. The main reasons are: 1) The drug is not metabolized by CYP2C19, which leads to the medication of mutant populationsFirst choice (about 20% of such people in China), unique in terms of other similar products; 2) Injectables enter medical insurance at a 39% price drop, and the same PPI is still a price advantage (average daily cost after price reduction is 156 yuan / 10mg, compared toThe average daily cost of Yutuo / Ogilvy / Lansor / Raybe was 57/51/100/93 yuan respectively;佛山桑拿网 3) Accelerating the replacement of the 30 billion PPI market, 1H19 ilaprazole accounted for the affiliated hospital of the PDB sample hospitalThan 5.

4% (vs. 2015 accounted for 1.

5%), and injectables are the mainstream dosage form of the PPI market (for example, accounting for about 70%), we expect that Aipu will transform into the power of medical insurance to quickly grab market share.

  Two continuations: Backed by abundant cash flow and stable performance, we are optimistic that the company will achieve two continuities: 1) Continuous performance growth: The company’s 1-3Q19 will achieve net profit attributable to non-attributed mothers9.

600 million (yoy + 20.

3%, 3Q single quarter Yoy + 33.

1%, a significant increase from the previous quarter), we expect the strong performance growth this year next year. Under the current environment of 4 + 7 impacting the profitability of generic drugs, the company’s product structure reflects the ability to reduce risks and resist; 2) continuousCash flow and marketing strength: The company has abundant book cash (3Q19 book cash of US $ 7.4 billion), operating net cash is stable (3Q19 1.4 billion US dollars), and its strong marketing team covers city hospitals, prefecture-level medical institutions and retail terminals.The cash capability provides sufficient funding for subsequent R & D blood transfusions. This is also a reflection of the competitive strength of modern pharmaceutical companies and a core advantage that Livzon has long maintained.

  Two enhancements: improve management efficiency, accelerate research and development, and promote the following improvements proposed by the company: 1) strengthen the executive force: the company ‘s in-depth adjustment of the management team, President Tang ‘s accelerated adjustment after taking office, including the strengthening of sales, and the refined division of research and development (development, CMC, Clinical, QA / QC, CDE communication and other departments arrange special personnel to post), we are optimistic that the company will overcome difficulties during the innovation and transformation; 2) Gradually expand and fulfill: this year’s R & D expenditure is expected to be 700-800 million, key projects includerhCG (the company’s guideline received 1H20 production approval), IL-6R (more than 100 cases have been enrolled in the Phase 3 clinical trial), PD-1 continues to explore the possibility of accelerating the market while doing chemotherapy / radiotherapy for NSCLC, and there is some communication between microspheres and CDENew progress (expected to use PD instead of PK as the clinical endpoint), 2021-2022 is expected to become a new cycle of product-intensive production.

  Risk warning: The reduction of neurotoxicity of Shenqi and rat is more than expected, and the development progress is not as expected.

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