During the pandemic, endorphins showed excellent analgesic effects in critically ill patients. Alpha-endorphins not only performed well in analgesia but also helped patients feel relaxed and happy.
The substantial donations made by Kechuang Bio during the pandemic, along with the excellent performance of endorphins in Wuhan, have led to the rapid development of endorphins in the domestic market.
It was precisely because of the good performance in dealing with the pandemic that the FDA accelerated the approval of endorphins when the pandemic surged in America. After the endorphins were approved, they were put on the market in America.
“It’s not that I don’t want to supply, it’s just that our production capacity is really limited. Our annual production capacity is only 8,000L. We need to ensure a stable supply to China, and we also need to supply to America. We don’t have any surplus stock to provide to Singapore,” Cheng Gang explained.
“The representatives from Europa’s representative office in Shenhai came to Kechuang Bio just two days ago. They hope that we can provide Europa with a batch of drugs, saying that they can buy them at twice the price.”
"We still refused; insufficient production capacity is the biggest limitation to our current development."
Since the number of confirmed cases in Singapore exceeded 100 at the end of February, it is now May, and the number of confirmed cases in Singapore every day is still in the double digits.
The pandemic could breach Singapore's medical defenses at any time, and Singapore is keen to purchase a batch of endorphins, which have performed well during the pandemic.
Endorphins are currently essentially monopolized, and only Kechuang Bio can provide them.
However, since the analgesic market is not a monopoly and there are a series of drugs such as morphine and fentanyl competing with it, it is impossible to sue Kechuang Bio on the grounds of monopoly.
Ho Ching, Temasek's head of the biotechnology project, said:
"As shareholders of Kechuang Biotechnology, it's normal for us to receive a portion of the production capacity, right? And if the capacity is insufficient, we will expand production. With the global pandemic developing rapidly, the market for endorphins is very broad."
“Our initial valuation was based on the assumption that endorphins could account for 40% of the global analgesic market share. Now, it is entirely possible that they could account for 60% to 70% of the market share.”
"With such a bright market outlook, we should seize the market."
"Enough of that. At least guarantee me five percent of the production capacity. I will have a five percent share of the company. Give me five percent of the production capacity."
Temasek is Singapore's sovereign wealth fund and to some extent represents the national will. At the time when the pandemic broke out globally, medicines were more precious than gold.
“We in Singapore are willing to pay three times the price for endorphins.”
On the black market, endorphins are a highly sought-after commodity with limited availability. Compared to the ex-factory price of Kechuang Biotechnology, the black market price is at least three times higher.
Because this stuff is for late-stage COVID-19, one dose can have a stimulating effect, and it's possible that someone could survive just by getting an injection of endorphins.
Cheng Gang: "I also want to expand production capacity, but the problem is that expanding production capacity takes time. The industrial production of endorphins has very high requirements for operators. Our current operators have all undergone six months of training before they can start working."
"The yield rate of their products was less than 80% in the early stages after they started working, and it is only now that it is gradually increasing."
"The fully automated production line for endorphins is still in the bidding stage, and it has not yet been determined which manufacturer will build it."
"Currently, Kechuang Bio has five billion US dollars 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 development."
"Due to the pandemic, in order to expand our production capacity, the master's and even doctoral graduates we recently recruited have started working on the production line."
"As for allocating 5% of the production capacity to Singapore, the production capacity of Kechuang Bio for the next eight months has been locked in by American and Chinese companies. We have already signed contracts and cannot free up production capacity for Singapore."
"Let alone you, even if Chairman Zheng asked me today, I wouldn't be able to provide production capacity to Singapore."
He Jing asked, "Could Kechuang Biotechnology authorize biopharmaceutical companies in Singapore to produce endorphins?"
Cheng Gang: "Authorization is possible, but there are a few issues, such as how to collect the authorization fee?"
"If we license our technology to biopharmaceutical companies in Singapore, does that mean we also need to license it to other international pharmaceutical companies?"
"Furthermore, from the time of authorization to when you start production, it will take at least six months. What will the pandemic situation be like during those six months?"
“Without the support of the technical staff of Kechuang Biotechnology, it would take you more than half a year to start production. But we can’t spare any manpower to help you build the factory right now. We’re already busy expanding our own production capacity.”
"Moreover, whether or not to license the synthesis pathway of endorphins to other pharmaceutical companies is a matter that needs to be decided by Chairman Zheng. I haven't seen Chairman Zheng for at least three months."
“Only Ms. Li from Kechuang Bio can meet with Chairman Zheng once a month to report on her work. Her next meeting with Chairman Zheng is in three days. I can ask her to ask for Chairman Zheng's opinion.”
“I cannot make a decision on such a critical issue on my own right now.”
"There are many biopharmaceutical companies in Singapore. We can have them manufacture a batch of endorphins in the laboratory for future use."
"Or you could talk to McKesson and ask them to free up some of their production capacity for you."
McKesson is an American pharmaceutical sales company that has secured a portion of its endorphin production capacity in advance.
He Jing knew that her pressure had failed: "I hope to get a reply from Chairman Zheng as soon as possible. Also, could you please ask Chairman Zheng if he can optimize the industrial production process?"
"Expand production capacity ahead of schedule."
The current situation of Kechuang Bio is that it has plenty of money. It has money lying in its accounts that it can't spend, and its products are in short supply.
There have been voices in the domestic securities market suggesting that Kechuang Bio should be listed on the Science and Technology Innovation Board (STAR Market), and that if Kechuang Bio were listed on the STAR Market, it would inevitably become the leading company on the STAR Market.
Stockholders jokingly say that the name "Kechuang Bio" was born to be listed on the Science and Technology Innovation Board (STAR Market), and the reason why the STAR Market has not made much progress since its establishment is because Kechuang Bio has not been listed on the STAR Market.
So much so that when the leaders of the Securities Regulatory Bureau came to Suzhou, they investigated and researched 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 typically list on NASDAQ or the Hong Kong Stock Exchange, while domestic pharmaceutical companies usually choose to list on the domestic or Hong Kong stock exchanges.
Because America has no shortage of excellent pharmaceutical companies, domestic pharmaceutical companies cannot obtain a good valuation when they list in America.
The current market situation is such that everyone is waiting to see when Kechuang Bio will go public, but Kechuang Bio itself is not in a hurry; they don't lack money at all.
Companies typically go public to raise funds for better development, which is a necessary stage in their growth process.
Even BOCOM International isn't in a hurry to list Kechuang Bio, let alone the other investment institutions.
They hope that Kechuang Bio can develop for a period of time and achieve a better valuation before going public.
Ideally, it should go public in 2021, because due to the impact of the 2020 pandemic, Kechuang Bio's financial report for 2020 will definitely look particularly good.
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