On August 02, 2022, the launch ceremony of the initial public offering of A-shares by R&G PharmaStudies Co., Ltd. (hereinafter abbreviated as R&G) was ceremoniously held in Beijing. A total of more than 100 people, including leaders from all walks of life, customer representatives, brokerages representatives, investors, R&G executive teams and employees were invited to attend the ceremony and jointly witnessed this historical moment with development milestones of R&G.
R&G PharmaStudies Co., Ltd. is officially listed on the GEM of Shenzhen Stock Exchange, with the stock abbreviated as "R&G" and the stock code of 301333. The IPO issue price of the company was 78.88 yuan/share, 15 million shares were issued online, with the fundraising amount of 1.183 billion yuan and the overfundraising of nearly 600 million yuan.
As a professional clinical trial outsourcing service provider (i.e., clinical CRO enterprise), R&G provides comprehensive whole-process integrated drug clinical R&D services for pharmaceutical enterprises and scientific research institutions worldwide. The main business covers clinical trial operations services, clinical trial on-site management services, biological sample testing services, data management and statistical analysis services, clinical trial consulting services, clinical pharmacology services, etc.
Professional services help new drug R&D and performance continues to grow
In recent years, the conditions for Chinese new drug R&D enterprises to participate in competition worldwide have become more and more mature. In the current efficient pharmaceutical R&D system, clinical CRO services are indispensable: pharmaceutical enterprises entrust the industrial chain links such as drug screening, clinical research, and data collection and analysis involved in the R&D stage to CRO companies to effectively control R&D management costs and coordinate internal and external resource allocation with the help of the latter resources. Since its establishment in 2008, R&G has gradually established a well-known expert team in the industry and constructed a core technology system throughout the whole-process of clinical drug development based on continuous industry practice and continuous accumulation. This core technology system covers: top-level design of clinical trials, SOP system for clinical trial operation in line with industry standards (GCP and ICH-GCP standards), scientific guidance on key decision points during the implementation of clinical trials, and methodological development and high-quality implementation of in vivo drug testing in clinical trials. The core technology system makes the clinical CRO services provided by R&G at the advanced level of the same industry.
R&G's key executive team includes professionals who have served in multinational or large domestic pharmaceutical enterprises, and excellent talents who have graduated from medical colleges and universities. As of December 31, 2021, employees with bachelor's degree or above account for more than 75% of the company's total employees. The executive team has professional research and management experience in the medical field, has rich resources and experience in upstream and downstream connection, and can cooperate with international and domestic customers to carry out the project successfully and to improve customer satisfaction.
R&G is also increasing its investment in R&D. From 2019 to 2021, R&G's R&D costs were 31,316,500 yuan, 34,700,600 yuan, and 41,190,400 yuan, respectively. By the end of 2021, R&G has 215 R&D personnel, accounting for 11.46% of the total number of employees; 9 patents and 199 copyrights.
At present, R&G assists the sponsor in participating in the R&D of a number of national major projects, covering multiple therapeutic fields such as oncology, cardiovascular, endocrinology, respiration, psychosis, neuropathy, gastroenterology, immunity, hematology and urology, helping to improve the pharmaceutical R&D industrial chain and promoting the development of the pharmaceutical industry.
Benefiting from external factors such as favorable pharmaceutical-related industrial policies and growing pharmaceutical R&D needs, R&G has continuously improved its service capacity and harvested eye-catching performance - from 2019 to 2021, R&G's operating revenues were 425,450,800 yuan, 484,449,700 yuan and 608,425,800 yuan, respectively; net profits were 86,327,600 yuan, 85,292,400 yuan and 100,354,700 yuan, respectively.
President Jie Wu said in a speech at the ceremony: "R&G will take this GEM listing as an opportunity to continuously improve the scientific level, accelerate the extension of the industrial chain in depth and breadth, accelerate the integration of the industry, accelerate the globalization process of the company, and comprehensively improve the profitability of the company. Carefully operate, strictly follow the requirements of listing rules of Shenzhen Stock Exchange, maintain a high degree of transparency and good company governance structure, scientifically plan and use raised funds, and turn R&G into a high-quality listed company with strong and sustainable development."
Clinical CRO industry has broad market prospects
As of December 31, 2021, R&G has cooperated with more than 790 medical institutions nationwide, provided professional services for about 750 domestic and foreign customers, accumulated experience from more than 3,300 various projects, with clinical CRO services provided at an advanced level in the same industry, and become a long-term or strategic service provider for many pharmaceutical enterprises. It is worth noting that the Chinese CRO industry is still in the early stage of development and will usher in huge development space in the future. On the one hand, driven by aging, urbanization and other factors, medical demands from emerging markets such as China have been continuously released, the pharmaceutical market has rapidly expanded, and R&D investment has also increased, thus driving the rapid growth of pharmaceutical R&D outsourcing demand. According to Frost & Sullivan's statistic and projection, from 2018 to 2023, China's pharmaceutical R&D investment is expected to grow to $49.3 billion at a CAGR of 23.1%, the growth rate is about five times faster than the global growth rate.
On the other hand, multinational pharmaceutical enterprises gradually shift their R&D business to emerging markets such as China, benefiting from factors such as rich talent resources and low labor costs in emerging markets. For example, according to Frost & Sullivan's statistic, in 2018, the average monthly number of visits to hospitals in China was as high as 1,259, nearly three times that in the United States, facilitating the conduct of clinical trials.
The above agency also predicts that the global CRO market size will reach $76.1 billion in 2023, of which the CRO market size in the clinical research stage will be approximately $62.5 billion. In the next few years, the Chinese CRO market size will maintain a CAGR of 29.4%, reaching $17.2 billion by 2023, of which the CRO market size in the clinical research stage will reach $13.3 billion.
Industry insiders believe that, benefiting from the influence of multiple factors such as continuous growth in R&D investment of innovative drugs, accelerated clinical review and approval of new drug trials, increased demand for R&D outsourcing by domestic pharmaceutical enterprises, and significant R&D transfer trend of multinational pharmaceutical enterprises, R&G's clinical CRO services will continue to obtain a broad development market. The successful listing of R&G on GEM will also promote the company to usher in more value recognition and greater imagination space in the capital market, and accelerate its progress towards the goal of becoming a global CRO enterprise with international competitiveness.
