GSK Performance Decline in China

Recently, GSK announced its third-quarter results. The company’s global sales increased by 1% year-on-year, and its net profit decreased by 12.3% year-on-year. Among them, the company’s main business prescription drugs and vaccines were in China due to anti-commercial bribery investigations. Sales fell 61%, exceeding the market's expected decline of 30%. The company stated that at present, the investigation continues and it is impossible to judge the long-term impact of this investigation on the company’s business in China.

GSK's performance in China has fallen. Investors are concerned about which listed companies in the country will benefit from it. Some analysts in the pharmaceutical industry told reporters that listed companies that overlap with the company’s products may benefit.

GlaxoSmithKline's prescription drugs and vaccines are reported to have suffered the most severe decline in sales. In the field of domestic low-molecular-weight heparin calcium, Changshan Pharmaceutical is second only to GlaxoSmithKline. Tiantan Biological is one of the listed companies with more vaccine products. The two companies benefit or more.

According to the above analysts, from the perspective of the pharmaceutical companies that have released the three quarterly reports, many companies have not exceeded their expectations. If GSK has not changed in terms of marketing methods, future performance may be affected.

In China, the performance fell 60% In July of this year, GlaxoSmithKline got involved in the commercial bribery storm. Affected by this, the outside world has repeatedly reported that its business is affected and it is necessary to withdraw from the Chinese market. Recently, GlaxoSmithKline has disclosed for the first time the direct impact of the incident on its performance.

“The sales of prescription drugs and vaccines in China fell by 61% in the third quarter compared to the same period last year.” In a report sent to reporters, GlaxoSmithKline introduced specific impacts. The company’s chief executive, Sir An Weijie, stated: “In the third quarter, our business in China was affected. We will continue to be committed to providing medicines for Chinese patients. We will also continue to fully cooperate with the Chinese government’s investigation, respect relevant laws and investigations. Process."

The reporter saw on the official website of GlaxoSmithKline that the company's sales in China mainly included prescription drugs, vaccines, non-prescription drugs and consumer health care products.

The above analysts told reporters that in the field of prescription drugs, GSK's largest varieties in China include anti-thrombotic low-molecular-weight heparin calcium injection “Quick Bilin”; antiviral adefovir tablets “Hewei Li”, pull Mivudine “Hepatin”; Compound pseudoephedrine hydrochloride, also known as Contac, is used to treat colds. The over-the-counter drug is ibuprofen, which is our common “finbitine” for pain relief.

In the field of vaccines, three vaccines were announced on the company's website: An Shishi, He Xin Li Shi, and Fu Lu Li Shi. Among them, the indication for security is active immunity to prevent hepatitis B virus infection.

Domestic listed pharmaceutical companies may benefit from the decline in the performance of GlaxoSmithKline. Who will be the beneficiary? The above analysts believe that it may be beneficial to domestic pharmaceutical companies, especially for companies that have direct competition with GlaxoSmithKline. "One of GlaxoSmithKline's largest varieties in China is low-molecular-weight heparin calcium. The domestic listed company that can compete with it is Changshan Pharmaceutical."

Changshan Pharmaceutical was listed in 2011. In the prospectus, the company introduced that its manufactured Wanmaishu brand low-molecular-weight heparin calcium injection enjoys independent pricing power from the National Development and Reform Commission. According to the sales amount, the company's market share in 2009 was second only to international pharmaceutical giant GlaxoSmithKline, ranking first among domestic companies.

Changshan Pharmaceutical 2013 semi-annual report shows that low-molecular-weight heparin calcium injection operating income for the first half of 198 million yuan, operating costs 42.33 million yuan, gross margin of 78%.

However, the above-mentioned pharmaceutical industry analysts believe that the performance of GlaxoSmithKline is declining. Even if other pharmaceutical companies benefit, it will be difficult for them to perform in the third quarter. If GlaxoSmithKline does not change its current marketing model, future performance may decline further, and other domestic pharmaceutical companies may benefit.

At the same time, as one of the world's largest vaccine manufacturers, GlaxoSmithKline also has a large market share in the domestic vaccine market. He Fu Li Shi, Shuang Fu Li Shi, Wei Ke lemon, Prudential Li Shi, Ying Fen Li Shi and other vaccine products, the company has production.

According to the above analysts, Pegatron's generic name is measles, mumps and rubella live attenuated vaccine. This vaccine accounts for a large proportion of the company's vaccine sales. Compared with domestic vaccine companies, Tiantan Bio may benefit. In addition, domestic listed companies that overlap with GSK-produced vaccines include Watson Biotech and Chi Fei Bio.