Guotai Haitong: siRNA drug technology upgrades drive breakthroughs in common disease treatment, Chinese companies can achieve differentiated advantages in multiple areas

According to the Zhitong Finance APP, Guotai Haitong has released a research report stating that small nucleic acid drugs, as the third wave following small molecules and antibody drugs, are making the leap from rare diseases to common diseases through technological iteration. With the upgrade of the GalNac delivery system and the maturity of fully modified technology, siRNA drugs are entering the research and development realization stage in major indications such as cardiovascular diseases, chronic hepatitis B, and weight loss, and are expected to give birth to blockbuster varieties. Chinese companies can rapidly iterate on the leading technology, achieving differentiated advantages in aspects such as knockdown effects, dosing cycles, and injection methods. The firm believes that future breakthroughs may lie in exploring new disease areas, especially targets that have been difficult to develop into drugs in the past, as well as breakthroughs in extrahepatic delivery systems.

The main points of Guotai Haitong are as follows:

Technological upgrades and product approvals drive platform maturity; siRNA drugs have transitioned from "rare diseases" to "common diseases."

Small nucleic acid drugs are the third wave following small molecules and antibody drugs, characterized by strong target expansion capabilities, strong research and development extensibility, long-lasting drug effects, and low resistance. There are various types of small nucleic acid drugs, among which siRNA drugs have better safety and long-lasting effects, making them a focus for domestic pharmaceutical companies. Since 2016, with the upgrade of the GalNac delivery system and the application of full modification, siRNA drugs have entered a rapid development phase, validating their value in the rare disease field, and are now gradually entering the research and development realization stage for common diseases, where "big drugs" may emerge in major indications such as cardiovascular diseases, chronic hepatitis B, weight loss, anticoagulation, and autoimmune diseases.

MNCs are actively trading in the small nucleic acid field; the firm believes that BD transactions in this area will continue, and Chinese companies may shine.

Overseas MNCs are positioning themselves in the small nucleic acid field by leveraging their understanding of indications through licensing in pipelines or collaborating on technology platforms. The firm believes that licensing transactions in this field will continue to occur. On one hand, the intrahepatic delivery system has matured, and the technological advantages and commercial value of small nucleic acid drugs have been validated; on the other hand, many pharmaceutical companies are facing the patent cliff dilemma and need new products to mitigate potential risks in their pipeline combinations, making it a relatively quick "strengthening" method to purchase pipelines from companies deeply engaged in small nucleic acid technology platforms. Furthermore, the firm expects that more sellers in transactions will come from China, as the research and development of small nucleic acid drugs has strong platform attributes, allowing Chinese pharmaceutical companies to fully leverage their engineering advantages, particularly in chemical synthesis.

Platform characteristics are significant; focus on positioning in indications and breakthroughs in extrahepatic delivery.

The current industrialization process of siRNA drugs is focused on the commercialization of common diseases with clear targets and biological mechanisms. Although the speed of molecular PCC is very fast after establishing the underlying technology platform for siRNA drugs, the firm believes that due to their long-lasting characteristics, drugs based on this mechanism still have a first-mover advantage (long clinical time), and companies that position themselves first can still achieve better commercialization returns or possibilities for external cooperation. Given the high efficiency and specificity of the GalNac delivery system, along with the potential for patent breakthroughs, the firm believes that drugs based on this mechanism will face high levels of competition in diseases with clear pathogenic genes or mechanisms and intrahepatic targets. Future breakthroughs may lie in exploring new disease areas, especially targets that have been difficult to develop into drugs in the past And breakthroughs in the extrahepatic delivery system.

Domestic Related Enterprises

1. Listed Companies: YKYY, Hengrui Pharma, Shijiazhuang Pharmaceutical Group, Junshi Biosciences, Frontier Biotechnologies, Fuyuan Pharmaceutical, Chengdu XianDao, Shengnuo Pharmaceutical, etc.; 2) Unlisted Companies: Bowang Pharmaceutical, Ruibo Biotech, Jingyin Pharmaceutical, Shengyin Biotech, Dairui Biotech, Weiyazhen Biotech, etc.

Risk Warning

Risks of research and development progress not meeting expectations, risks of intensified competition, risks of commercialization not meeting expectations