German Merck increases M&A investment! Pfizer, AstraZeneca, Novo Nordisk and other MNCs are actively "picking the bottom"! Innovative biotechnology opportunities and risks?

Recently, Merck announced its medium-term development plan
from 2023 to 2025 at the Capital Market Day conference.
The meeting mentioned that the group will achieve global sales growth of more than 50% in 2025, and its "three carriages" of life sciences, healthcare and semiconductors will contribute 80% of the growth momentum and achieve the medium-term goal
of global revenue of 25 billion euros in 2025.

Merck said that the group plans to further increase global targeted investment and expand its leadership position
in the field of bioscience and technology on the basis of its own research and development on the basis of its own research and development in the three core businesses of life science, health care and semiconductors from 2023.

In fact, in today's pharmaceutical market, Merck is clearly not the only buyer
wielding money.
In 2022, major multinational pharmaceutical companies continue to accelerate the "bottoming" of innovative technologies, and MNCs such as Novo Nordisk, Amgen, Pfizer, and AstraZeneca have joined the "buy, buy, buy" army and put platforms with development potential into the "shopping cart"
.

Mastering cutting-edge technologies to ensure that it still maintains its leading edge in the new round of medical technology update is very attractive
to every pharmaceutical giant.
However, before any innovative biotechnology finally landed, opportunities and risks coexist, gene editing, cell therapy, nucleic acid drugs, ADCs.
.
.
Which one is the outlet of the new era?

Target global business growth

Life sciences are expanding rapidly

Last September, Merck announced its medium-term growth plan
at Capital Markets Day.
According to the plan, by 2025, about 80% of sales growth will come from the three business growth drivers
.
To achieve its growth targets, the company plans to increase its total investment in the period 2021-2025, which will far exceed the total
investment between 2016 and 2020.

As one of the troika of Merck Germany, the life science sector is an important layout plate
for the future of Merck Germany.
Germany's Merck said organic sales in its life sciences services business are expected to grow by 7 to 10 percent
annually.

Taking stock of Merck's investment and M&A activities in the life sciences sector in Germany have been strengthening
in recent years.
In 2020, Merck acquired mRNA manufacturing capabilities through the acquisition of AmpTec; Recently, the Group's Life Sciences division announced that it will invest more than EUR 230 million to strengthen the manufacturing capacity
of single-use components for its plants in Morsem, France, and Wuxi, China, by 2028.

In fact, since the beginning of this year, there have been many
cases of investment and mergers and acquisitions in life sciences by Merck in Germany.

In February this year, Merck of Germany announced the acquisition of Exelead for about 780 million US dollars (nearly 5 billion yuan), and said that it will continue to invest more than 500 million euros in the next ten years, realizing Merck's ability
to provide customers with end-to-end CDMO (contract development and manufacturing organization) services for the integration of the entire mRNA (messenger ribonucleic acid) industry chain.

In June this year, Merck also opened a $65 million high-potency active pharmaceutical ingredient factory in Wisconsin, USA, to promote the global layout
of Merck's life sciences sector in Germany.

In September this year, Merck's first biosafety testing facility in China was inaugurated in Zhangjiang, Shanghai, with an investment of 29 million euros
.
The virus clearance verification laboratory for the first phase of the project has been successfully completed, and the second phase of the expansion project is expected to open
by the end of 2023.

In addition to mergers and acquisitions, in terms of product cooperation, Merck has also further increased its layout
in the field of innovative technology.
Since the beginning of this year, Merck's cooperation with CelerisTx and Amphista Therapeutics has attracted widespread attention
around the layout of protein-degrading drugs.

In addition, Merck recently announced an option-inclusive licensing agreement with Nerviano Medical Sciences (NMS) to acquire the development and commercialization rights
to the PARP1 inhibitor NMS-293 for $6,500.

NMS-293 is the first next-generation PARP1 inhibitor
to enter clinical trials.
Due to its unique properties, it has great potential
to be combined with Merck's life sciences business in Germany, such as chemotherapy, DNA repair inhibitors or ADCs.

Merck said that when evaluating acquisition targets, Merck said that it always takes sustainability considerations into account and prioritizes the development of new products
that make a particularly significant contribution to sustainable development.
Selectively larger acquisitions and investments will be carried out from 2023 to accelerate the pace of
development.

MNC continues to increase its M&A

Innovative technology opportunities go hand in hand with risks

Every major capital allocation of MNC will attract the attention of the global industry and is also regarded as the wind vane of new technology layout! Gene editing, cell therapy, vaccines, nucleic acid drugs, ADCs and other technologies are blooming, and many MNCs continue to accelerate their capital deployment and strive to maintain a leading position
in the new generation of cutting-edge technologies.

On August 4, Amgen acquired ChemoCentryx
for approximately $3.
7 billion in cash.
Through the acquisition, Amgen acquired three other early drug candidates, including Tavneos, a "first-in-class" drug for ChemoCentryx for severe autoimmune essential patients, as well as early drug
candidates targeting chemokine receptors in other inflammatory diseases and an oral checkpoint inhibitor that is potentially anti-cancer.

On August 8, Pfizer acquired Global Blood Therapeutics (GBT) for $5.
4 billion, complementing and strengthening Pfizer's expertise and leading
position in the product pipeline.
Oxbryta is GBT's flagship product
for the treatment of sickle cell disease (SCD).

On September 1, Novo Nordisk and Forma Therapeutics announced that they had reached a definitive agreement to acquire Forma
for $20 per share in cash.
Forma, a company focused on sickle cell disease (SCD) and rare blood disorders, is developing one of its two fastest-growing products, Etavopivat, for the treatment of SCD and is currently in Phase 2/3 clinical trials
.

It is worth noting that on October 3, AstraZeneca and its subsidiary Alexion Pharmaceuticals agreed to acquire LogicBio Therapeu for about $68 million (about 484 million yuan) at a price of $2.
07 per share, which is nearly 700% premium to LogicBio's closing price of $0.
27 on Friday, which instantly attracted industry attention
.

It is reported that this is a further in-depth layout
of AstraZeneca in the field of rare diseases.
AstraZeneca first reached out to the field of rare diseases in July 2021, when AstraZeneca completed the acquisition of Alexion for $39 billion, this time AstraZeneca is looking at LogicBio's advantages
in the field of gene editing.

The industry view is that in the face of the cold winter of the capital market, many biotech companies in the United States are facing a huge capital test, and the decline in corporate valuation has also caused some cutting-edge technology platforms to fall out of value, and it is just the right time
for multinational pharmaceutical companies to "bottom out" M&A potential technologies 。 "In the case of LogicBio, they were clearly lucky! In 2018, LogicBio raised $70 million in an initial public offering at $6 per share; However, since then, LogicBio's market value has been on the decline, until it received a delisting warning from the NASDAQ just last month, and now it has successfully "landed"! ”

However, the fascinating frontier, novelty, and possibility of innovative technologies often represent the unknown, instability, and immaturity, and for pharmaceutical companies, "adding" immature frontier technologies is accompanied by unpredictable risks
.

On October 7, PharmaCyte Biotech announced that former CEO Kenneth Wagoner left the company and was forced to leave because of his cell-in-a-box technology, which has not produced results for two years, which aims to put genetically engineered human cells into capsules to treat diseases
such as tumors.

In addition to replacing the CEO, PharmaCyte has halted spending on all preclinical and clinical work until the review committee and board of directors have completed their investigation
into the company's operations.
The current market capitalization is $53 million, which has evaporated 75% from the peak, and currently has $82 million in cash and equivalents on hand, without any product revenue
.

Intellia Therapeutics, the star company led by Novartis, has not had
a good time.
Since 2020, Intellia's quarterly revenue has continued to decline, while losses have continued to grow, and to date, Intellia has raised a total of $1.
8 billion, including $115 million when it went public in 2016, which is now only $1 billion
.
At the rate at which Intellia burns money, the remaining funds will be used up
in a few years.

In addition, Intellia is currently working with Regeneron Pharmaceuticals to develop a liver drug, NTLA-2001, which is facing a patent dispute
for its core technology.
Intellia's license from the CVC group for Crispr technology for in vivo gene editing is over a patent held by the Broad Institute over who was the first to invent a Crispr gene-editing tool for human and plant cells, involving tens of millions of dollars in patent fees
.

Innovative technology does not mean that there is a platform advantage, and the star technology and enterprise "ending" that were in the limelight yesterday may also be unexpected
.

According to the market view, technological innovation is the source of international competitiveness of enterprises, industries and countries, but it is often a combination of opportunities and risks; Therefore, how to control the risks of technological innovation and improve the return on innovation investment is the core issue
that enterprises should grasp in technological innovation.