On January 16, the share price of Innovent Biologics (HK01801, share price 30 Hong Kong dollars, market value 49.14 billion Hong Kong dollars) fell by more than 10%, with the largest drop exceeding 14%. The market view generally links the drop in share price to a meeting two days ago.

According to the official website of the Anhui Provincial Medical Security Bureau, on January 14, the provincial medical security work conference was held in Hefei. The meeting made arrangements for the provincial medical insurance work in 2025 from seven aspects, of which the third article mentioned "leading the national biological drug alliance centralized procurement".
It is reported that chemical drugs are usually also called small molecule drugs, with simple chemical structures. As long as the chemical structures are consistent, the active ingredients are generally considered to be the same. Biological drugs are usually called macromolecular drugs, but due to their complex structure, the imitation of biological drugs cannot be exactly the same as the imitation of chemical drugs, so they are named biosimilars.

Biological drugs are one of the most watched sectors in the pharmaceutical industry, especially in the fields of tumors and autoimmune diseases, and have broad clinical application prospects. In particular, biosimilars represented by bevacizumab injection, rituximab injection, and adalimumab injection have large clinical demand and great market potential. According to IQVIA, the global biosimilar market size will grow from US$18 billion in 2020 to US$75 billion in 2030, with a compound annual growth rate of 17.2%.

According to the Insight database, 120 biosimilars have been approved for marketing in China, including 46 monoclonal antibodies, including bevacizumab (12), adalimumab (7), trastuzumab (5), tocilizumab (4), infliximab (4), denosumab (4), rituximab (4), etc. Qilu Pharmaceutical and Zhengda Tianqing are major biosimilars, with 5 monoclonal antibody biosimilars already on the market, followed by Hisun Pharmaceutical, Borui Bio, Fuhong Hanlin and other companies.

In the past few years, whether biosimilars will face comprehensive centralized procurement has been a hot topic in the industry. The previous national drug centralized procurement mainly focused on chemical generic drugs, while for biosimilars with relatively complex processes, although several provinces have conducted small-scale attempts at biosimilar centralized procurement, such as the centralized procurement of rituximab in Guangdong Province and Anhui Province in 2022, there is still a lack of large-scale, cross-regional centralized procurement.

In response to the daily stock price performance, Innovent Biologics responded to an interview with the Daily Economic News, saying that it noticed that the company's stock price and trading volume fluctuated abnormally in the afternoon, and the company's business operations were normal and had not changed. At present, the company's products under review, such as Masdu peptide, Tetutumab, and Piconcibazumab, are progressing smoothly and have not changed. Regarding the connection between the stock price drop and the news related to the centralized procurement, Innovent Biologics said: "We have heard a lot of news now, but we don't know the specific reason."

In addition, the reporter also contacted the listed pharmaceutical company Bio-Thera (688177.SH, stock price 18.78 yuan, market value 7.776 billion yuan) that may be involved in this biological drug centralized procurement as an investor. The company currently has three biosimilars approved for listing in China, including Gleoli® (adalimumab), Probexi® (bevacizumab), and Cerilis® (tocilizumab). Bio-Thera said, "I have always felt that centralized procurement is a coexistence of risks and opportunities, and I will continue to pay attention to the relevant situation. The specific arrangements (of centralized procurement) are not yet clear."

In the investor research minutes disclosed earlier, Bio-Thera also stated: "The centralized procurement of biological drugs is an inevitable trend. We believe that centralized procurement has a positive impact on Bio-Thera. First of all, Bio-Thera's drugs are all independently developed, and it has sufficient production capacity to support market demand. It can effectively cope with the price impact brought by centralized procurement, and at the same time provide a stable and continuous supply of drugs. Secondly, Bio-Thera's bevacizumab and tocilizumab have been applied for overseas listing, and many other drugs are undergoing international clinical trials. The above-mentioned drugs with global rights are gradually listed, which can effectively share the impact of environmental policies and other factors in a single region on overall drug sales."

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