Chinese pharmaceutical companies are frequently acquiring overseas companies to accelerate internationalization

Recently, LG Chem said in a regulatory document that it will invest $566 million to acquire AVEO Pharmaceuticals and enter the US anti-cancer drug market
.
Coincidentally, on October 17, ReLive Biotechnologies Ltd.
also announced that it has formally signed an agreement to acquire the main assets of German listed company Co.
Don AG (stock code: CNW.
DF), which is expected to be completed
in November 2022.
In fact, the acquisition of pharmaceutical companies is very common in the industry, and it is worth noting that many domestic pharmaceutical companies are also looking overseas, and are frequently initiating acquisitions, building factories and other actions
.
For example, in July this year, WuXi AppTec and WuXi Biologics both announced that they plan to build a new R&D and production base
in Singapore with S$2 billion, or about 9.
9 billion yuan, in the next ten years.
In June, Fosun Pharma bought OncoCare
, Singapore's largest private oncology specialist medical center.
In the same month, China Biopharmaceutical announced that the Company, its wholly-owned subsidiary invoX Pharma Limited and invoX's wholly-owned subsidiary Fennec Acquisition Incorporated entered into a merger agreement and plan with F-star Therapeutics, Inc.
to acquire F-star Therapeutics for more than US$160 million to further complete the company's antibody drug pipeline
。 In February, Clarion announced that it had agreed to acquire Snapdragon Chemistry, Inc.
for approximately $57.
94 million, and upon completion of the merger, Snapdragon will continue to expand its laboratory and manufacturing facilities in Waltham, Massachusetts, USA, adding capacity to support larger-scale production
。 In addition, Kanglong Chemical also acquired Aesica (API commercialization base) in Cramlington, UK and Coventry production base (API commercialization base) in the United States in 2022 to enhance the company's overall strength
in small molecule CDMO and drug safety evaluation.
It is clear from the above that the acquisition of overseas companies is gradually becoming the choice of
more and more Chinese pharmaceutical companies.
The industry believes that this is mainly due to the characteristics of the pharmaceutical industry, "the pharmaceutical industry is a capital-intensive and technology-intensive industry, with high barriers, strict supervision, and great uncertainty in the research and development of new drugs, which can diversify risks and accelerate the progress of
projects through mergers and acquisitions.
" Especially for pharmaceutical companies, the research and development of new drugs takes a long time, and some innovative drugs even take more than ten years from project approval to marketing
.
Therefore, for pharmaceutical companies initiating mergers and acquisitions, choosing to acquire small pharmaceutical companies with R&D and production capabilities can quickly expand their product lines and cut into new fields
.
In recent years, cross-border mergers and acquisitions of Chinese pharmaceutical enterprises have increased significantly, and in addition to the characteristics of the industry, the increase in industry concentration guided by the national industrial policy is also an important driving force
.
Under the background of the rapid increase in domestic industry concentration, the industry expects that more and more Chinese pharmaceutical companies will try to enhance their competitiveness
by promoting the internationalization of enterprises, grafting foreign advanced technology, and finding new markets.
Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice
to anyone.