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One hand relies on the huge generic drug army to contribute revenue, and the other hand uses innovative drugs to drive growth and achieve market breakthrough
.
Following Tiwa, the restless generic drug giant Hui Zhi acquired innovative pharmaceutical companies
in the capital winter.
Before China's generic drug companies have grown into global generic drug giants, they have also concentrated on innovation, and it is worth looking forward to
who will achieve an international breakthrough combining innovation and imitation in the future.
Following Teva, another generic drug giant has increased its innovation
.
Viatris, a generic drug giant that was officially launched at the end of 2020, is trying to give it a makeover and add innovation
.
Recently, Hui Zhi aimed at the ophthalmic track and contributed a classic case
to the market about the acquisition of biopharmaceutical companies in the commercialization stage after 2015 by generic drug giants.
01 Hui Zhi began to harvest innovative pharmaceutical companies
Hui Zhi began to harvest innovative pharmaceutical companiesOn November 7, generic drug giant Hui Zhi broke the news that the company agreed to buy Oyster Point at a cash price of $11 per share
of all shares outstanding, for a total consideration of approximately $295 million
.
And, if Oyster Point meets its stated performance targets in fiscal year 2022, Oyster will also report to existing Oyster
Point ordinary shareholders pay potential cash payments of up to $2 per share, and the transaction is valued at approximately $349 million based on 26.
83 million
shares outstanding.
Upon completion of the transaction, the ophthalmic business will operate
as an independent division of Hui Zhi.
It is understood that Oyster
Founded in June 2015, Point is already a commercial-stage biopharmaceutical company dedicated to discovering, developing, and commercializing drug therapies
for ophthalmic diseases.
Oyster in the first half of this year
Point revenue was $7.
397 million and net income was -$97.
834 million
.
October 2021, Oyster
Point's first innovative drug, TYRVAYA (nasal spray 0.
03mg, OC-01, varenicline tartrate), was approved by the FDA for the treatment of signs and symptoms of dry eye syndrome, and Oyster
Point is also exploring potential applications for the product in other areas, including neurotrophic keratopathy, dry eye associated with contact lens intolerance, and ocular surface preparation for refractive surgery
.
In August 2021, domestic Jinxing Pharmaceutical obtained the right
to develop and commercialize the product in Greater China.
Analysts believe the company's share price has fallen about 80% from $16 in early 2020 amid market turmoil, and is now being acquired for Oyster
Point is also a good choice
.
For Huizhi, this deal is also quite a good deal
.
At a cost of $300 million, Hui Zhi received Oyster in addition to TYRVAYA, a patented innovative drug to strengthen its ophthalmic track
Point's other promising eye care pipeline is also an experienced team with extensive knowledge
of the ophthalmic field from a clinical, regulatory and commercial perspective.
It is understood that Oyster
Point is also developing a concentrated tear film (ETFTM) gene therapy platform to treat specific ocular surface diseases OC-101 (AAV-NGF), OC-103 (AAV-DAO), and has also collaborated on the development of a unique therapy
that uses bacteriophages to treat ophthalmic bacterial infections.
In addition to the acquisition of Oyster
In addition to Point, Hui Zhi is spending about $400 million to acquire Famy Life Sciences, a private Indian company, to supplement its ophthalmic product pipeline
.
It is understood that in the field of ophthalmology, this year's blockbuster generic drug, AbbVie's dry eye treatment agent Restasis, was approved
.
02 Step in the footsteps, but also rely on innovative drugs to drive performance?
In the footsteps of ladder tiles, but also rely on innovative drugs to drive performance?Perhaps the reason for the real attention of Huizhi's move is that the global generic drug giant, which was formed by the merger of Mylan and the former Pfizer generic drug division Pfizer, chose to transform
to innovation.
Hui Zhi said that the purpose of the two transactions is to allow Hui Zhi to grasp a competitive ophthalmic product portfolio and predict it
In 2028, these two acquisitions will generate an additional $1 billion in sales and $500 million in operating profit
.
But Huizhi's acquisition may have only just begun
.
In the 2022 half-year report, Hui Zhi stated that it is constantly evaluating products and potential acquisitions of the company as part of
its strategy for future growth.
In addition, Hui Zhi also revealed that it will raise up to US$9 billion by
the end of 2023 through continuous divestiture of assets.
For this asset, Hui Zhi has said that in addition to repaying debt and dividends, it is expanding investment in some areas and listing ophthalmology, gastrointestinal diseases and skin diseases as three priority treatment areas
.
Previously, by continuous acquisition, adopting the strategy of generic drugs and innovative drugs going hand in hand, it was Teva
that grew into a global generic drug giant.
Data show that in 2012, Teva's specialty drug revenue reached 8 billion US dollars, and in 2016 it increased to 8.
6 billion US dollars, and Teva's specialty drug revenue can even rank among the top 30 pharmaceutical giants
.
In terms of profitability, the innovative drug division is the main source of profit for Teva, contributing an average annual profit of US$4.
49 billion between 2012 and 2017, accounting for more than 53.
7% of the company's total profit; In comparison, the generic drug segment was only $2.
53 billion, or only 23.
5%
of the company's total earnings.
For years, Teva's core revenue depended on its original product, Copaxone, which at one point contributed about
half of its patented drug revenue.
However, due to the expiration of the patent, its sales have plummeted to $1.
3 billion
by 2020.
In 2021, sales of the product in the North American market were $570 million, down 35%, and in the international market, revenue was $37 million, down 29%.
And Teva's future performance is still driven by innovative drugs, including
Austedo (for the treatment of Huntington's disease and tardive dyskinesia), Ajovy (for migraine), and biosimilars
.
2022
Teva expects sales of about $1 billion for Austedo, which is now the second-largest migraine brand
in Europe.
Not only that, the layout of Tiwa in the Chinese market has chosen to enter with special drugs as an incision, and has achieved certain results
.
For example, Teva's original oncology drug Cunda (bendamustine hydrochloride for injection) is the first real special drug product launched by Teva in China, and in the fifth batch of centralized procurement, the original product successfully won the bid
at a lower price than domestic generic drugs.
In addition, its Austedo was also approved to enter the Chinese market
in May 2020.
Looking at the top 10 generic drugs in the world, 8 companies have increased their sales compared to 2020
.
However, both Teva and Sandoz, which ranked first and second, saw sales fall by 3 percent
.
Teva continues the downward trend of the past five years, while Sandoz is currently undergoing its toughest transformation
.
In 2021, Sandoz achieved sales of US$7.
5 billion, down 2.
6% from the previous year, after five years ago, Sandoz sales were US$
9 billion.
In order to reverse the slump, Novartis planned to sell Sandoz's U.
S.
dermatology business and oral generic solid dosage business to Arabindo in 2019, but the transaction backfired and the project did not receive regulatory approval
within the expected time.
After that, Novartis began exploring all Sandoz options
, from retaining the business to spinning off.
In August this year, Novartis Global announced plans to spin off Sandoz, its generic and biosimilar divisions, into a new independent publicly traded company
.
The spin-off is expected to be completed in the second half of 2023, and Sandoz will be the largest generic drug company
in Europe.
Sandoz not only has a variety of generic drugs in the fields of antibiotics, respiratory, oncology, central nervous system, etc.
, but also includes 8 biosimilars such as adalimumab, rituximab, and infliximab, and is expected to launch 15 biosimilar pipelines in the future
.
It is worth looking forward to
whether Sandoz will also choose the same strategy as Teva and Huizhi after the spin-off.
03 See you on the innovation track of Chinese generic drug companies
See you on the innovation track for generic drug companies in ChinaOn the other hand, the path of China's generic drug companies seems to be very clear, one is to go overseas to grow into a global generic drug giant, and the other is to transform
to innovation.
However, growing into a global generic drug giant still seems to be an unattainable dream
for domestic pharmaceutical companies.
In 2021, 4 of the world's top 10 generic drug companies are from India, and there are still no Chinese pharmaceutical companies, and most of China's generic drugs have still not gone out of the Chinese market
.
An industry insider said in an interview with E drug managers that China's generic drug companies seem to have lost the best period of development when they grow into international generic drug
giants.
In the past, Chinese generic drug companies were keen to go to the United States to apply for ANDA, but in the eyes of this person, the real goal of Chinese companies is not to deepen the US market, but to tap the domestic market
with the help of relevant policy dividends.
Generic drugs compete with price advantages, quality assurance, service advantages, and reputation advantages
.
In contrast, Chinese pharmaceutical companies' generic drugs lag behind Indian generic drug companies by 20-30 years
in commercialization in the US market.
For a long time, many domestic companies have been able to go overseas with relatively single varieties, and it is difficult to establish a certain credibility among large distributors
in the United States.
India's generic drug companies already have dozens, if not hundreds, of FDA-approved drugs and have built trust
in the distributor channel.
Incomplete statistics, the number of domestic pharmaceutical companies in the United States ANDA is only equivalent to the amount
of one or two TOP10 generic drug companies.
The person believes that if China's generic drugs want to achieve substantial development in the United States, they cannot blindly rely on policy outlets, but must accumulate experience
step by step.
If the company is strategically positioned to enter the U.
S.
market, this is not impossible, but the process will be very difficult, and the more feasible path is to find a platform with the same idea to work with
.
However, the person stressed that at present, both Chinese pharmaceutical companies, Indian pharmaceutical companies, and American pharmaceutical companies are facing huge competition in the field of generic drugs, and if they want to gain a foothold in this industry, they must make distinctive and improved new drugs
with relatively high technical barriers.
At the same time, with the implementation of the normalization of centralized procurement, domestic generic drug companies must face the competitive pressure of original products on the one hand, and on the other hand, they need to be vigilant against the rise of global generic drug giants, especially those represented by Teva in China
.
Choosing innovation and transformation seems to have become a common choice
for generic drug companies.
However, according to the previous survey data of 600 people voted by the E Drug Manager Research Institute, under the normalization of centralized procurement, the probability of generic drug companies successfully transforming into innovative pharmaceutical companies by relying on their own accumulation, 412 people voted for "less than 50%", accounting for more than 68%.
With the existing sales strength and innovative drug products, this seems to be the most ideal way
for generic drug companies to transform.
Such as Hengrui, Xiansheng, Chia Tai Tianqing and other enterprises are the same
.
Under the cold winter of capital, many people have proposed that it is time for generic drug companies with sufficient cash flow to dig the bottom like Huizhi, but industry insiders believe that taking the path of acquisition by Tiwa is easy to build up debt, leaving the company in another quagmire
.
On the whole, the transformation and innovation of generic drug companies can not be achieved overnight through acquisition
.
Under normal circumstances, the transformation of generic drug companies to innovation also needs to go through the baptism of improved new drugs, rather than directly overtaking in one step
.
In addition, in terms of enterprise operation, generic drug research and development and innovative drug research and development are often two different R&D thinking, which require two different teams to operate
.
As the manager and contributor of E drug Hei said, the success of innovative drug research and development often occurs in the team
of scientists who have accumulated in the research and development of innovative drugs in the past.
If generic drug companies want to transform innovative drugs to success, after preparing the money and time, they should start
by learning to work with these successful team of scientists.
