As a mage, I just want to pursue the truth

Chapter 26 Demand exceeds supply
During the epidemic, endorphins showed excellent analgesic effect on critically ill patients. α-endorphin not only showed excellent analgesic effect, but also made patients feel relaxed and happy.

The large donations from Kechuang Biotechnology during the epidemic and the excellent performance of Endorphin in Jiangcheng have enabled Endorphin to develop rapidly in the domestic market.

It was precisely because of the good performance of the epidemic and when the epidemic in America soared, the FDA accelerated the approval of endorphins, and endorphins went on sale in America after approval.

"It's not that I don't supply, it's that our production capacity is really limited. Our annual production capacity is only 8000L. We need a stable supply domestically and also to America. We don't have any surplus goods to provide to Singapore." Cheng Gang explained.

"The representative of Europa's representative office in Shenhai came to Sinopharm two days ago. They hope that we can provide a batch of drugs to Europa, saying that they can buy them at twice the price."

"We still refused. Insufficient production capacity is the biggest limitation of our development now."

Since the number of confirmed cases in Lion City exceeded 2 at the end of February, it is now May and the number of confirmed cases in Lion City is above double digits every day.

The epidemic may break through Lion City’s medical defenses at any time. Lion City is very eager to purchase a batch of endorphins, which have performed well during the epidemic.

Endorphins are now a monopoly and can only be provided by Ke Chuang Biotechnology.

However, since the analgesic market is not a monopoly and there are a series of drugs competing with it, such as morphine and fentanyl, it is impossible to sue Sinovation Biotech on the grounds of monopoly.

Ho Ching, Head of Temasek’s Biotech Initiative, said:
"As shareholders of Sinopharm, it is normal for us to get a portion of the production capacity, right? And if the production capacity is insufficient, we can expand it. Now the global epidemic is developing rapidly, and the market for endorphins is very broad."

"At that time, our valuation was based on the assumption that endorphins could account for 40% of the global analgesic market share. Now it seems entirely possible that it could account for 60% to 70% of the market share."

"Now that the market prospects are so bright, we should go and occupy the market."

"Let's not talk too much, at least guarantee me 5% of the production capacity. My shares account for 5%, so give me 5% of the production capacity."

Temasek is the sovereign fund of Singapore and represents the national will to a certain extent. At the time when the epidemic broke out globally, medicines were more precious than gold.

"We in Singapore are willing to pay three times the price for endorphins."

In the black market, endorphins are a hard currency with a price but no demand. Compared with the ex-factory price of Ke Chuang Biotechnology, the black market price is at least three times higher.

Because this thing can act as a cardiotonic in the late stage of COVID-19, and it is possible that a shot of endorphins can help you survive.

Cheng Gang: "I also want to expand production capacity, but the problem is that it takes time to expand production capacity. The industrial production of endorphins has very high requirements for operators. Our current operators have all undergone six months of training before they can gradually take up their posts."

"The yield rate after they took up their posts was less than 80% in the early stage, and it is only now slowly increasing."

"The fully automated production line for endorphins is still in the bidding stage, and we haven't yet decided which manufacturer will make it."

"Science Biotechnology has $5 billion in cash on its books. We are not short of money. Expanding production capacity is not just a matter of money. We need to respect the objective laws of the development of things."

"Due to the epidemic, in order to expand production capacity, the masters and even PhDs we recently recruited have started to work on the production line."

"As for the 5% share given to Lion City, the production capacity of Sinovation Biotech for the next eight months has been locked up in advance by American and Chinese companies. We have already signed the contract and cannot spare the production capacity for Lion City."

"Let alone you today, even if Mr. Zheng asked me, I would not be able to provide the production volume to Lion City."

Ho Ching asked: "Can Kechuang Biotechnology authorize biopharmaceutical companies in Singapore to produce endorphins?" Cheng Gang: "We can authorize, but there are a few questions. How will the licensing fee be charged?"

“If we authorize biopharmaceutical companies in Singapore, do we also have to authorize other international pharmaceutical companies?”

"Also, it will take at least half a year from authorization to the start of production. How will the epidemic situation develop in the next half year?"

"Without the support of the technical staff of Kechuang Biotechnology, it will take you more than half a year to start formal production. However, we cannot allocate staff to help you build the factory now, and we are too late to expand our production capacity ourselves."

"Also, whether to license the endorphin synthesis pathway to other pharmaceutical companies requires the final decision of Director Zheng. I haven't seen Director Zheng for at least three months."

"Only Mr. Li from Kechuang Biotechnology can meet with Mr. Zheng once a month to report on work. Her next meeting with Mr. Zheng will be in three days. I can ask her to ask Mr. Zheng for his opinion."

"I can't make a decision on this critical issue on my own right now."

"There are many biopharmaceutical companies in Singapore, and we can ask them to first produce a batch of endorphins through laboratory methods for future use."

"Or you can talk to Maxon and ask them to give you some of their production capacity."

McKesson is an American pharmaceutical sales company that has locked in part of the endorphin production capacity in advance.

He Jing knew that her pressure had failed: "I hope to get a reply from Director Zheng as soon as possible. I would also like to ask Director Zheng if he can optimize the industrial production process."

“Expand production capacity ahead of schedule.”

The current situation of Ke Chuang Bio is that it has no shortage of money, but it has money lying on the books that cannot be spent, and its products are in short supply.

There have always been voices in the domestic securities market that mean that scientific and technological innovation should be listed on the Science and Technology Innovation Board, and that scientific and technological innovation will inevitably become the leader of the Science and Technology Innovation Board if it is listed on the Science and Technology Innovation Board.

Investors even joked that the name of Ke Chuang Bio was born for the Science and Technology Innovation Board, and the reason why the Science and Technology Innovation Board has not made much progress since its establishment is because Ke Chuang Bio has not been listed on the Science and Technology Innovation Board.

So much so that when the leaders of the China Securities Regulatory Commission came to Suzhou, they inspected and investigated Kechuang Biotechnology and asked when Kechuang Biotechnology planned to go public and whether it had considered listing on the Science and Technology Innovation Board.

Domestic Internet companies generally go public on NASDAQ or the Hong Kong stock market, and domestic pharmaceutical companies generally choose to go public on the domestic or Hong Kong stock market.

Because America has no shortage of excellent pharmaceutical companies, domestic pharmaceutical companies cannot get a good valuation when they go public in America.

The current market situation is that the outside world is looking forward to when Kechuang Biotechnology will go public. Kechuang Biotechnology itself is not in a hurry as they are not short of money at all.

Generally, companies go public to raise funds for better development, which is a necessary stage in development.

Even Bocom International is not in a hurry to list Sinovation Biotechnology, let alone several other investment institutions.

They hope that Kechuang Bio will continue to develop for a period of time and then go public again with a better valuation.

It would be best to go public in 2021, because due to the impact of the 2020 epidemic, Kechuang Bio's 2020 financial report will definitely be particularly good.

(End of this chapter)