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Under the cold winter of the market, what can domestic pharmaceutical companies do with 1 million? Hua Medicine gave an unexpected but reasonable answer
.
On November 18, Hua Medicine announced that its subsidiary Hua Medicine Technology (Shanghai) Co.
, Ltd.
intends to purchase 100% of the shares
of Nanjing Shengderail Pharmaceutical Technology Co.
, Ltd.
for 1.
025 million yuan.
Upon completion, the target company will become an indirect wholly-owned subsidiary of the company and its financial information will be consolidated into the Group's consolidated financial statements
.
In addition, Hua Lin Shanghai entered into a project co-development framework agreement with Sidrell Pharmaceuticals to establish a commissioned development relationship to develop orphan drugs
in the field of innovative targets and innovative compounds.
Hua Medicine believes that the acquisition will significantly strengthen its scientific research capabilities and academic network, and expects to realize the combined synergy effect, resulting in optimized new glucokinase drug candidates for the treatment of various diseases, including rare disease indications and broader metabolic disorders
.
The market view is that in the environment of a depression in the capital market of innovative drugs, the valuation and market value of biotech companies have been falling, breaking the ice between enterprises, and accelerating mergers and acquisitions may release an important signal
that pharmaceutical innovation has begun to bottom.
The value of biomedical innovation assets has begun to return to rationality, what kind of investment opportunities are hidden in the low valuation of Biotech?
Biotech's road to survival, IPO is not the only option?
Biotech's road to survival, IPO is not the only option?Sidley Pharmaceuticals is not a small biotech
that has just been founded.
According to public information, Sidley Pharmaceuticals was founded in September 2018, taking the research and development of new drugs for rare diseases as the starting point and gradually extending to common diseases
.
After its establishment, Sidrell Pharma has obtained nearly 10 million yuan in R&D funds through talent and scientific research project declaration, and has achieved service income of 2.
4 million yuan
.
In October this year, Hua Ling Shanghai and Nanjing Sidrell Pharma entered into a project cooperation development framework agreement to establish a commissioned development relationship to develop orphan drugs
in the field of innovative targets and innovative compounds.
Sidrell Pharma's financing is not without opportunity
.
Previously, at the monthly roadshow of the "Win in Nanjing • Science and Technology Innovation Future" biomedical financing project, Sidrell Pharmaceuticals sought a new round of financing with a target amount of 50 million yuan, which will be used to develop preclinical and clinical trials
of lead compounds for different targets in the pipeline.
However, now it has been acquired by Hua Medicine at a price far lower than the "discount" of the roadshow's financing goal, and the color of huddling for warmth is very strong
.
Recall that from 2017 to 2021, the bull market for innovative drugs in China caused many domestic biotech blowouts
.
During that glorious period, the overall valuation of Biotech was extremely high, and the 100-fold price-earnings ratio and hundreds of billions of shares even became the norm, revealing the strong confidence
of the market.
With the bursting of the "bubble" of innovative drug capital, coupled with the turbulence of the international financial situation, the difficulty of unsmooth financing channels and cold cooperation has forced Biotech to open source and reduce costs and shrink
pipelines.
Investment institutional professionals pointed out that in the mature pharmaceutical industry innovation ecological chain, Biotech's capital exit paths mainly include three types: commercial profit, IPO and acquisition
by large enterprises 。 It is worth mentioning that acquisitions and mergers and acquisitions have been a major factor affecting the competitive ranking of the world's top pharmaceutical companies: Takeda's acquisition of Scheer entered the top 20 ranking for the first time, Bristol-Myers Squibb (BMS) acquired Celgene, AbbVie (AbbVie) acquired Allergan.
.
.
Rapid expansion in a short period of time with the help of capital power has become a common routine operation
on the road of transformation of foreign pharmaceutical companies.
It can be seen that through mergers and acquisitions and reorganization and accelerated integration investment, we can win more economic foundation to invest in product research and development, and move forward
.
Win-win is never a good way to
build strength.
Compared with foreign countries, why do domestic biotech companies only focus on the exit method of listing? Large-scale mergers and acquisitions are rare in the domestic market? Industry opinion analysis believes that during the dividend period of the capital market, the valuation of domestic biotech companies is too high, and it is not the best time to acquire them; Before the capital bubble burst, no one dared to fight Biotech's 100-billion-level valuation
in the form of acquisitions and mergers and acquisitions.
In the hot market, many people do not realize that the IPO itself is also a double-edged sword
.
Since the second half of 2021, the stock price of domestic Biotech has suffered a wave of plummeting and shrinking market value; Under the cold winter, Biotech's valuation fell across the board, and the capital market returned to rationality
.
People gradually stopped asking about the commercialization of Biotech, but opened the way
of merger and reorganization.
Can a buyout with a low valuation be reborn?
Can a buyout with a low valuation be reborn?Some investment banks have observed that since last year, the demand for mergers and acquisitions in the pharmaceutical field has increased
significantly.
This demand is reflected in several aspects:
First, the depression in the secondary market has hindered IPOs, and investment institutions tend to exit through mergers and acquisitions;
Second, U.
S.
health Chinese concept stocks are seeking to be privatized, delisted and then listed in China, a process that will also generate M&A transaction opportunities;
Third, investment institutions pay attention to post-investment management, hoping to help Biotech achieve value-added
through mergers and acquisitions.
Based on this, the integration and upgrading of the industry has increasingly become a consensus, and some companies have taken the lead
.
In February this year, in order to enrich its product portfolio, CSPC Pharmaceutical Group announced the completion of the acquisition of 100% equity in Zhuhai Zhifan Enterprise Management Consulting Center, thus owning 51% of the equity of Biotech and becoming the new controlling shareholder
of Sinochem.
Recently, Nanxin Pharmaceutical also restarted the restructuring plan to acquire Xingmeng Biologics, but adjusted from the original method of increasing cash to acquire 100% of the equity to increase capital and pay cash to acquire 51% of the equity
of Xingmeng Biologics.
In addition to China, large companies have also started overseas mergers and acquisitions
.
In June this year, China Biopharmaceutical, which has 20 billion in cash, acquired F-star for $161 million to establish a bispecific antibody or even multi-antibody development platform; it was also reported recently that Sinopharm is currently considering acquiring Hong Kong-listed company BBI Life Sciences to enhance its DNA synthesis capabilities, which may be valued at more than $1 billion
.
It is worth mentioning that the acquisition of F-star by China Biopharma can be regarded as a test of China's pharmaceutical power in the overseas M&A market
.
For China Biopharma, the acquisition further strengthens the company's global clinical research and regulatory capabilities, thereby accelerating the development of
its global oncology pipeline.
In addition, the acquisition gives China Biopharma access to F-star's proprietary next-generation bispecific antibody platform and its experienced scientific team, including 91 full-time employees
with deep expertise in antibody engineering, immunology, drug discovery, clinical development and regulatory regulatory affairs.
It can be seen that through acquisition, domestic pharmaceutical companies can not only obtain the global rights and interests of a series of innovative drug pipelines at relatively reasonable prices, but also have the opportunity to directly obtain advanced R&D platforms and master the world's leading medical technologies, so as to find a high-speed development path
beyond self-research.
The big waves of sand are
golden.
After more than a decade of rapid development, the number and scale of China's innovative drugs have been considerable
, both in terms of R&D subjects and products under development.
The road to survival of the fittest and win-win through mergers and acquisitions has been opened, whether it is the small and beautiful Biotech, the accumulated Biopharma, or the successful transformation of Bigphrama, will wait for the feedback of the market
.
