What Obstacles Does Yifang Biology Face In The Three Years' Zero Revenue Of The Main Business Of The Scientific And Technological Innovation Board?

? ? ? How long does it take from a valuation of 424 million yuan to 4.824 billion yuan? Yifang biology, which plans to be listed on the science and Technology Innovation Board of Shanghai Stock Exchange, gives the answer: it only takes two months to be on the science and technology innovation board. On April 15, 2021, Yifang biology, which has just completed the round D financing of 1 billion yuan, submitted the application draft, and plans to raise 2.409 billion yuan for new drug research and development and headquarters base construction projects.

According to its application draft, Yifang biological intends to choose the fifth set of standards for the scientific and technological innovation board to be listed.

? ? ? The 21st century economic reporter noted that before July 2020, Yifang biological was a wholly foreign-owned enterprise controlled by Hong Kong Yifang. According to its capital increase price in May of that year, the company's valuation was less than 424 million yuan. In July 2020, based on the internal equity transfer price of Yifang biological company, its valuation is still less than 10 billion yuan.

In September 2020, the company increased capital again and transferred its equity. More than 20 institutional investors and some natural person shareholders were introduced to raise 1 billion yuan. According to the capital increase price, the valuation of Yifang biological soared to 4.824 billion yuan. With many capital craze, in two months, Yifang biological valuation exceeded the listing standard of science and technology innovation board.

According to the fifth set of listing standards of the science and technology innovation board, pharmaceutical enterprises can be listed and issued only if the market value is no less than 4 billion yuan, and at least one core product is approved to carry out phase II clinical trial.

In response to the 21st century economic report, Yifang biological reported that the company's latest round of financing has been invested by many well-known investment institutions, such as Hillhead capital, Qiming venture capital, Jingwei capital and Zhaoyin international, with a post investment valuation of 4.824 billion yuan. The valuation of successive rounds of financing is market-oriented, which reflects the real market value of the company.

In November 2020, Yifang biology will be changed into a joint-stock company as a whole, starting the listing process. The amount of gold behind the listed Yifang biology has aroused widespread concern in the market.

Zero revenue

According to the public information, Yifang bio positioning is an innovative drug R & D enterprise with global vision based in China, focusing on major diseases such as cancer and metabolic diseases. During the reporting period from 2018 to 2020, the company's main products are in the research and development stage, and no product has formed sales revenue.

During the reporting period from 2018 to 2020, the company achieved revenue of 55.3 million yuan only in 2019 by transferring bpi-d0316 product patents and technologies to Beida Pharmaceutical Co., Ltd., and the main business income in other periods was zero. The net losses of the company were as high as 103 million yuan, 94.9859 million yuan and 1.053 billion yuan, respectively.

At the end of 2018, the total assets of yifangbio were only 4.7638 million yuan, the asset liability ratio under the consolidated statements was 1028.16%, and the parent equity was - 44.2153 million yuan.

Through multiple rounds of equity financing, the total assets of Yifang bio will reach 1.057 billion yuan by the end of 2020, with the asset liability ratio of 4.42%, and the net loss of the current year will be 1.053 billion yuan. As of the end of the reporting period, the accumulated outstanding loss balance of yifangbio was -1.179 billion yuan.

In this regard, Yifang biological said that the company's core products have not yet been listed and sold, and there are accumulated outstanding losses, and it is expected that the company will continue to suffer losses.

According to the application draft, there are one product in the new drug marketing application stage, three products in the clinical trial stage and five pre clinical research projects in the product pipeline under research of Yifang biology. The product projects of the company's clinical development span multiple stages from phase I to new drug marketing application (NDA).

At present, yifangbio's most promising revenue is targeted drugs for the treatment of non-small cell lung cancer. Bpi-d0316, the third generation EGFR inhibitor of the company, has completed the phase II Registration clinical trial of the second-line treatment. The new drug marketing application (NDA) has been accepted by the State Drug Administration in March 2021, and is still under the review of the drug evaluation center (CDE) of the State Drug Administration.

According to the 21st century economic report, consulting experts in the pharmaceutical industry, the cycle from marketing application to approval of new drugs in China is about eight months to one and a half years. Yifang bio expects that the above products can be approved for marketing in 2022.

However, Yifang biology also said that due to the great uncertainty in the review and approval of new drugs, it is impossible to guarantee that the submitted new drug marketing application can obtain the approval of regulatory authorities. If bpi-d0316 is unable to obtain new drug marketing approval, or such approval contains significant restrictions, it will have a significant adverse impact on the company's business operations.

However, Yifang bio's targeted drugs for the treatment of breast cancer, hyperuricemia and gout, and targeted drugs for the treatment of non-small cell lung cancer, colorectal cancer and other cancers are mostly in the stage of clinical trials and even preclinical research, which need a long time of R & D investment. This means that yifangbio will have to wait until 2022 at the earliest.

From 2018 to 2020, the company's R & D investment is 95.9218 million yuan, 132.5928 million yuan and 1.008 billion yuan, respectively. It can be predicted that in the next two years, Yifang biology will continue to have high R & D investment, but there is still great uncertainty whether it can smoothly realize the operating revenue.

According to the delisting rules of the science and technology innovation board, if the net profit (including retroactive restatement) of the listed company after being deducted from non tradable items after audit is negative and the revenue (including the retroactive restatement) is less than 100 million yuan, or the audited net assets (including retroactive restatement) is negative, the delisting condition will be triggered.

Yifang Bio said that if the R & D of the main products after the listing fails or the drug listing approval is not obtained, the company will not be able to guarantee the profitability in the next few years, and may also face the risk of delisting after listing.

With many capital craze, in two months, Yifang biological valuation exceeded the listing standard of science and technology innovation board. Visual China

Unknown commercialization

Yifang Bio said that the company is currently transforming from a biomedical technology company with R & D as the core to a comprehensive pharmaceutical enterprise integrating research, production and sales. However, judging from the company's existing development, it is still far from the target.

The reporter of 21st century economic report has noticed that, unlike other pharmaceutical companies, Yifang biology's only competitive advantage at present is its R & D products, and its operating assets such as production and sales are almost zero.

As of the end of the reporting period, Yifang biology and its subsidiaries have no self owned properties at home and abroad. They are all engaged in office and R & D activities by leasing. At the same time, the company has not yet established a sound commercial sales team, almost no commercial experience and market recognition. In the market competition environment of domestic pharmaceutical industry focusing on sales, Yifang biology is facing the challenge of starting from scratch.

At present, bpi-d0316 is the fastest developing product in the company, and its commercial operation relies on external companies.

In December 2018, Yifang bio signed an agreement with Beida Pharmaceutical Co., Ltd., a listed company, stipulating that it and Beida Pharmaceutical Co., Ltd. jointly owned the Chinese patent and patent application right of bpi-d0316 products in the cooperation area (including Mainland China, Hong Kong and Taiwan).

Beida Pharmaceutical Co., Ltd. exclusively implements the jointly owned patents in the cooperation area, and carries out research, development, commercialization, manufacturing, use, marketing and sales of bpi-d0316 and its products in application fields.

Beida Pharmaceutical Co., Ltd. will pay the down payment and follow-up R & D milestone payment of 230 million yuan to Yifang bio, as well as the sales milestone payment and sales commission at the agreed ratio after the product is launched, until the effective claim of the last bpi-d0316 product related compound patent between the company and Beida pharmaceutical in the cooperation area expires.

Before the products in research of Yifang biology have been put on the market, marketing relies on the partners to carry out commercialization, which has diluted the company's profits. In addition, in the cooperation, if the commercialization progress is not smooth or not as expected, the company's income may be far away from the expected.

At the same time, Yifang bio admitted that the third generation EGFR inhibitor Market of bpi-d0316 product is more competitive, and there is competition of approved similar drugs in domestic market.

It is understood that oxitinib, which competes with Yifang biological bpi-d0316 products, has entered the national health insurance catalogue; Ametinib has been approved for listing in March 2020 and entered the national health insurance catalog; Vometinib was approved for listing in March 2021.

An analyst from a pharmaceutical industry in Beijing told the 21st century economic reporter that entering the national medical insurance catalogue means that pharmaceutical products have entered the stage of large-scale market application, occupying the vast majority of the market. At the same time, the related products have also experienced a substantial price reduction and no longer have high profit expectations.

In November 2019, the state medical insurance bureau announced the negotiation results of the national medical insurance catalogue in 2019. Among the new varieties, 70 drugs were successfully negotiated, with an average price drop of 60.7%. 27 drugs in the renewed varieties were successfully negotiated, with an average price drop of 26.4%.

Bpi-d0316 has not been approved for listing, and has lost its competitive advantages in market promotion, medical insurance price adjustment, medication route, drug pioneers and so on. Yifang biology believes that if bpi-d0316 does not take effective measures, it will be difficult to obtain good market share and achieve sales expectations.

In this regard, Yifang Bio said that the company has not yet established an independent commercial sales team, and other products of the company that have entered the stage of clinical trial, d-0502, d-0120 and d-1553 are conducting international clinical trials. For the domestic marketing of products, after the products are approved for marketing, they will adopt reasonable price strategy, differentiated academic promotion and product marketing strategy, and conduct commercial sales through their own sales network and cooperative sales. For overseas marketing of products, the mode of authorized cooperation or authorized sales will be given priority.

The company's recent business prospects and profitability largely depend on the commercialization ability of the core drugs in research. Even if the company obtains the marketing license from the drug regulatory department or realizes the commercial production according to the plan, the commercialization prospect of other drugs in research of the company is still uncertain, and the commercialization time and effect may not meet the expectation.

The patent dispute will occur if the product is not listed

Based on a careful assessment of the company's current operating conditions, yifangbio believes that in the foreseeable future, the factors that may have a significant adverse impact on the company's ability to continue as a going concern include, but are not limited to, risks related to new drug research and development, technology upgrading and product iteration, risks of drug commercialization failing to meet expectations, risks of insufficient working capital, etc There are risks of accumulated and continuous losses.

In addition, during the reporting period, there have even been disputes on patent application right and trade secrets among the beneficial party organisms in the research and development stage.

In December 2020, Shanghai beierda filed a patent application right lawsuit against Yifang biology and Beida pharmaceutical. On March 18, 2021, the relevant court issued a subpoena to yifangbio, requesting to hold a pre-trial meeting on April 12.

Shanghai beierda sued that Yifang biology and Beida Pharmaceutical Co., Ltd. illegally obtained their technology, and without authorization submitted to the State Intellectual Property Office an application for an invention patent with the application number of 201910491253.6 and the title of "pyrimidine or pyridine compounds", its preparation method and medical use.

Shanghai beierda required to confirm that the patent application involved in the case and the invention patent after subsequent authorization were owned by it, and requested Yifang biology and Beida Pharmaceutical Co., Ltd. to cooperate in handling the patent application right or patent ownership change procedures.

In response to an interview with the 21st century economic report, Yifang biology reported that the patent application involved involved a compound that could inhibit the variant morphology of EGFR protease. Although the products under research of the company to be listed include an EGFR inhibitor (bpi-d0316), it does not involve the core products in research, and does not affect the listing and sales of the core products in research.

In March 2021, bilda filed a civil lawsuit against Yifang biology and Yueheng Jiang, the company. Bilda claimed that its proprietary bpi-7711 compound conception and other related trade secrets were stolen, and Jiang Yueheng and others were suspected of unjust enrichment, unfair competition and civil conspiracy. At present, Yifang biology and Jiang Yueheng are preparing evidence to actively respond to the lawsuit.

The 21st century economic reporter noted that Yifang bio has four core technicians, Wang Yaolin, Jiang Yueheng, Dai Xing and Zhang Ling, all of whom are American nationals. Wang Yaolin is now the chairman of Yifang biology, and Jiang Yueheng is the deputy general manager and Secretary of the company; Dai Xing and Zhang Ling are deputy general managers of the company.

The four core technical personnel have previously worked in many pharmaceutical companies, and all of them have worked in the international pharmaceutical giant Merck sand East company. Yifangbio said that there may be third-party patents or patent applications that the company does not know about at present in the field of drug research, and the candidate drugs under development or to be developed in the future may have the risk of being accused of infringing the patent rights of the third party, and may face intellectual property infringement claims, complaints or other potential legal disputes.

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