After Hengrui and Kexing did LP, Cinda also went down to engage in private placement, and this new idea of BD has a look!

China's leading pharmaceutical companies are once again eyeing the private equity sector

1 Looking for a better quality BD?

This is the first time that Cinda has initiated and led a venture capital fund

It is understood that Suzhou Xinhe Guoqing Fund is a venture capital fund jointly initiated by Cinda Biology and Yuanhe Holdings as general partners and operated by Cinda Biologics, and the fund manager is Suzhou Xincheng Private Equity Fund Management Co.

According to public information, the fund focuses on investing in leading companies in innovative drugs, biotechnology, and industry chain related fields, focusing on empowering next-generation biomedicine and breakthrough technologies to address unmet clinical needs

"It's an extension

In order to be able to "make at least two blockbuster new drugs that can cure diseases and save people" in the next 10 years, Cinda has been looking for good BD

Eli Lilly is the company

Xinda, which is moving from biotech to biopharma, has been seeking cooperation

In June last year, Cinda and Baoyuan Pharma reached a collaboration

In July, Cinda reached a partnership with Arsett Pharmaceutical for a whopping $245 million, known as a phenomenal transaction

In September, Cinda reached a licensing agreement with Jinfang Pharma, in which Cinda obtained the exclusive development and commercialization rights of KRAS G12C inhibitor GFH925 in China, and had the option to exercise this global interest

Cinda's BD is not limited to products, but also includes a leading technology platform

Cinda has signed a non-exclusive, target-specific licensing agreement with Synaffix B.

Some primary market investors told E-drug managers that in the past, through the introduction of a single product authorization, equity investment in some projects, and now through the form of private equity funds, they can participate more deeply in from early research and development to follow-up commercialization, and this practice of Cinda is an extension of its BD capabilities, and can also create advantages

If you look at multinational pharmaceutical companies, such as Pfizer, Johnson & Johnson, Eli Lilly have their own private equity funds, through investment and biotech cooperation, and then broaden their own product pipeline

2 LP: Pharmaceutical companies invest in the "firewall"

Unlike Cinda Biology, which initiated and led the way, in recent years, the incidents of listed companies doing LPs in the pharmaceutical industry are more frequent

Some listed companies directly indicated in the announcement that the company's participation in the subscription of fund shares can use the management team, industry experience and resource advantages of professional investment institutions to expand investment channels and grasp investment opportunities in related fields in a timely manner, which is conducive to enhancing the company's comprehensive competitive strength
.

From a corporate financial perspective, investing as an LP also balances risk
to a certain extent.
An industry investor told E-Drug Manager that the investment of pharmaceutical companies in their own funds for research and development will be directly reflected in the company's profit and loss in the current period, but investment in the form of funds is reflected in the financial statements of listed companies as long-term investment, which can reduce the fluctuations
in the current financial statements.

In June this year, the board of directors of Hengrui Pharmaceutical passed the resolution
of Hengrui Pharmaceutical to establish a private equity fund.

It is understood that Hengrui Pharmaceutical (an A-share listed company) and its holding subsidiary Shengdi Investment and Hengrui Group jointly initiated the establishment of a partnership enterprise, Shanghai Shengdi Biomedical Private Equity Investment Fund Partnership, with a total subscribed capital of 2.
01 billion yuan
.
Among them, Shengdi Investment as the general partner (GP) contributed 10 million yuan, holding 0.
5% of the shares, and Hengrui Pharmaceutical and Hengrui Group as limited partners (LP) each contributed 1 billion yuan, with a shareholding ratio of 49.
75%
respectively.
The existence of the partnership is long-term, and the private equity fund is engaged in equity investment, investment management, asset management and other activities
.

It is worth noting that the GP of the private equity investment fund is Shengdi Investment, and the holding company of Shengdi Investment is Hengrui Pharmaceutical, which means that Hengrui Pharmaceutical can form indirect control over the investment fund through its holding subsidiary, and the investment project of the fund can also form synergy with Hengrui's own research and development pipeline in the
future.
This almost coincides with the investment logic of Cinda Biologics
.

Pharmaceutical companies that have made money on new crown vaccines and IVD kits are also acting as LPs to "feed back" the pharmaceutical industry
.

At the beginning of June, Weiwu Health Industry Investment Fund underwent industrial and commercial changes, the original shareholder Li Yixuan withdrew, adding a number of shareholders such as Beijing Kexing Zhongwei Biotechnology Co.
, Ltd.
and China Merchants Wealth Asset Management Co.
, Ltd.
, and in the previous week, Weiwu Capital just announced the completion of the first closure of the RMB fund, the total size of the fund is expected to be about 10 billion yuan, the first scale of 4 billion yuan, and its fundraising scale has reached the highest
level of RMB biomedical professional funds this year.
According to this, the market believes that Kexing has become the LP
of the new round of RMB funds of Weiwu Capital.

IVD enterprise Anxu Biologics also issued an announcement in June this year that the company intends to use its own funds and Zhongchuan Gold Controlling Investment Fund and Guohan Investment Management to initiate the establishment of Hangzhou Zhongchuan Anxu Equity Investment Partnership to invest in enterprises or projects
in the fields of pharmaceutical health and biomedicine in the entrepreneurial and growth stages.
The total capital contribution of the proposed investment fund shall not exceed 1 billion yuan, of which Anxu intends to subscribe for no more than 500 million yuan with its own funds, and the initial amount of capital contribution is 200 million yuan
.
It is reported that the revenue of Anxu Bio in 2020 and 2021 was 1.
2 billion yuan and 1.
59 billion yuan respectively, an increase of 471.
86% and 32.
47% year-on-year; Net profit was RMB649 million and RMB740 million, up 1102% and 13.
8% year-on-year; Net cash flow from operating activities was $602 million and $676 million, respectively, representing an increase of 3,068% and 12.
24%
year-on-year.

However, among these LPs, whether China's own "Eli Lilly Asia Fund" can be born will take time to answer
.