US $819 million from China triplets Group Co., Ltd. includes an anti-cancer drug from the United States

[China Pharmaceutical network enterprise news] at the end of June, Sanyou group announced that it had completed the acquisition of dendreon, a US pharmaceutical company, for us $819 million, and included a cell immunotherapy anti-cancer drug in the bag For this private enterprise to successfully complete the delivery, Xu Fang, vice president of Sanyou group and chairman of dendreon company, said, "such a scale as our 819 million (US dollars) is a large amount approved by foreign management this year In practice, the state is very supportive of innovative acquisitions for entities " The deal actually made Sanbei group "the owner of Provenge, a cell-based immunotherapy drug." Xu Fang, who had worked in a multinational pharmaceutical company for many years before joining Sanbei, said that this was the first acquisition of the original research drug in the United States by a Chinese company, so the price paid was considered to be high so far The so-called original research drug, that is, the original new drug, is also considered to be an imported drug that has passed the protection period in China Founded in 1993 by Yuan Yafei, the Nanjing based trio group was one of a wave of officials in China Today, Yuan Yafei has ranked 32nd on Hurun's list of China's top 100 richest people, with a fortune of 40 billion As of the end of 2016, its total assets have exceeded 120 billion yuan It has listed companies such as Hongtu hi tech and Nanjing Xinbai, and its business covers it technology, real estate, retail, investment and other fields Like many big Chinese companies, the private company has been actively engaged in overseas M & A in recent years, with 40% of its employees overseas In 2014, Sanbei acquired 89% of the shares of house of Fraser, a famous department store in the UK, but the plan of active investment and global expansion put forward in the same year was repeatedly postponed It was not until the end of last year that Sanbei rebuilt its original shopping center in Nanjing and opened its "Oriental fried" Whether dendreon will fall into a Flemish embarrassment is one of the doubts about the deal Dendreon used to be a star company in the field of biotechnology in the United States Provenge, a core product, is a cell-based immunotherapy drug approved by the U.S FDA and used for prostate cancer cell immunotherapy In 2011, dendreon company, which mainly focuses on R & D and marketing is not strong, tore up the agreement with GSK It was confident that it would allocate resources, arrange personnel and invest in R & D with an annual sales expectation of 2 billion US dollars As a result, the actual annual sales reached only 300 million US dollars It was declared bankrupt in November 2014 due to its inability to pay huge debts It was approved by the former owner of Canada Welland Pharmaceutical (v Acquired Now, for dendreon, a team with a heavy emphasis on scientific research and a bumpy fate, it is crucial to get effective support from Chinese bosses Another concern from the outside world is the regulatory risk of "cell immunotherapy" in China In 2016, the national health and Family Planning Commission stopped all cellular immunotherapies being carried out in different hospitals across the country Persuading regulators has become another task on the shoulders of the triplets Xu Fang, vice president of Sanyou group and chairman of dendreon company, replied to the above questions one by one in this interview of viewpoint The following is a partial text selection of this video interview Buy American drugs at a high price reporter: do you think it's worth buying a drug in the United States at a high price of $819 million? Xu Fang: it's divided into two parts When Valeant acquired dendreon in 2015, it spent almost $500 million, and then they spent another $150 million to restructure, so it was basically $650 million At that time, the company they bought went bankrupt and its employees were extremely unstable After the acquisition, they reorganized, recruited a new American marketing team, and made a lot of adjustments in sales channels In 2016, dendreon was already profitable Referring to the expectation of the second half of dendreon disclosed by Veron in the briefing, the sales volume in the second half of 2017 will be US $170 million, the EBITDA (EBITDA) will be US $65 million, and the annual EBITDA will be US $130 million Combined with the $819 million we spent, and it has the potential to be a very reasonable price at less than 7 times EBITDA Reporter: Sanyou group is not a pure pharmaceutical company How can it provide support to this American pharmaceutical company? Xu Fang: at that time, when we acquired Sanyou, we also made a detailed investigation After the acquisition of Welland, a new team was changed for it This team is mainly based on marketing and has strong marketing experience They made a big change in the sales system Before, our marketing personnel only focused on oncologists We also know that prostate cancer, as a patient, must not be oncology department, right? He would choose urologists This new team is very experienced, so it adds an operational channel According to the data of the past two years, the operation channel of Urology has grown very well Last year, it grew by more than 30% In the future, it will further develop this channel In terms of triplets, as a new operator, new owner, we need to further motivate the American team For them, they started a second business on the platform of the triplets They had made plans before, but they didn't get attention In our system, they will be given full attention Reporter: if it's only to support the management team of overseas companies to start their own businesses, the cost is really a considerable investment Xu Fang: not exactly What they need is not only financial support, but also many, for example, to help them develop the international market, which is actually a synergy Innovative overseas M & A is more likely to be supported by the government: in recent years, many large Chinese enterprises have accelerated their overseas M & A, but the authorities are worried that some overseas investment is actually capital outflow, which may cause systemic risks Xu Fang: I think the state has always supported innovation and industry A scale like our 819 million US dollars is a large amount approved by foreign management this year In terms of practical actions, the State supports innovative acquisitions very much for entities I think the future of overseas M & A should be based on innovation For example, this time, we actually acquired a core technology, so this is an immunotherapy drug approved by the U.S Food and Drug Administration (FDA) We have brought the whole intellectual property rights, the whole platform and the management and control system to China, which is also of reference significance to CFDA So we think that in the future, more overseas M & A, if we go to acquire a core technology, it will have an advanced role in promoting the upgrading of the industry, and will be able to overtake at a detour, especially in the field of health, and bring actual results to patients, I think you may have more expectations for this aspect of overseas M & A Reporter: can you ask me where is your main source of funds this time? Xu Fang: the source of funds is self owned funds, but also part of financing Reporter of "great health" triplet group: triplet group has been mainly engaged in retail, technology and real estate for a long time Why should it expand in biomedical field? Xu Fang: triplet group began to lay out great health three or four years ago Over the years, we have also made some acquisitions in the field of health Then we have the pension industry, hospitals, and large cord blood banks in China and Southeast Asia At the beginning of the year, we also acquired Fandi biology Sancelli group has a lot of plans for the layout of big health and biological medical treatment You just mentioned chairman yuan Yafei, whose investment philosophy has always been to define the future Therefore, there are two important criteria for selecting projects One is the advanced nature The target must be advanced in a certain field, whether it is technology, product or service, and has a relatively definite market potential, and it has been able to make profits This is a very important standard The second standard is to have synergy with our internal industries, such as the acquisition of dendreon Reporter: you just mentioned some acquisitions in China It's been a while now Overall, how much value does it create? How to reflect it? Xu Fang: it's a little too early now, because the field of health is scientific and needs time to accumulate I think in another one or two years, we may be able to answer this question better Reporter: now there are some Chinese companies that spend money overseas, such as land acquisition, possibly through blood transfusion by domestic listed companies Xu Fang: the group is a major shareholder of the listed company This acquisition has nothing to do with the listed company At present, it is the group's own funds, plus some financing to do so At least in the three cell group, this is quite different Across multiple regulatory risks, correct the misunderstanding caused by the "Wei Zexi incident" Reporter: How did you get the approval from the government departments of China and the United States in the process of preparing for this acquisition? Did you encounter any obstacles during this period? Xu Fang: the permission from the United States should be relatively simple, so the permission from China, we are very formal and follow the process As I said just now, we have very open communication with various regulators And then approved our project Reporter: Provenge, the core drug of dendreon company, belongs to cellular immunotherapy The term was last known to the media or the public It was during the Wei Zexi incident that directly caused the health and Family Planning Commission to stop this therapy in China Xu Fang: I'm glad you can raise this question In fact, we want to introduce (the drug), which is related to the incident of Wei Zexi Wei Zexi's event is the treatment of DC-CIK, which is to take out your own immune cells and expand them in vitro, and then inject them back (to the patient) It is a non-specific treatment that cannot be said to be completely ineffective, but it has not been approved by any regulatory authority This is a prostate cancer antigen with specificity We use this antigen to combine with our own immune cells, and then reinfusion (to the patient) This pap-gm-csf can activate T cells and expand them It can recognize prostate cancer, have specificity and achieve therapeutic effect In addition, our treatment is FDA approved As I said just now, after 16 years of research and development, three three phase clinical trials have been completely verified Moreover, it was listed in April 2010 and joined in the medical insurance in 2011 During the seven years of listing, we have accumulated 20000 patients, which fully verified its clinical effectiveness and safety Because of Wei Zexi's therapy, there is a big misunderstanding about cell therapy in the Chinese market, and the regulatory authorities lack corresponding policies to manage it Therefore, in this case, it is more necessary to introduce an advanced, FDA approved treatment In fact, when dendreon was doing research and development, there was no relevant policy in the United States During the whole research and development process, the team of dendreon and the FDA jointly developed cell immunotherapy