What is the reason behind the high failure rate of 19 pharmaceutical companies that failed to go public?

With multiple benefits such as capital, policy, and industry, the biomedical industry has developed rapidly
.

01 Pharmaceutical companies are frustrated in listing

01 Pharmaceutical companies are frustrated in listing

Recently, the IPO collapse of Renhui Bioscience Innovation Board has been widely concerned by the market
.

At present, Renhui Biologics has voluntarily withdrawn the application documents, the China Securities Regulatory Commission has decided to terminate its issuance registration procedures, and the status of Renhui Biologics IPO application has changed to "termination of registration"
.

Public information shows that Renhui Biology focuses on the independent R&D and industrialization of innovative biological drugs.
Currently, there is only one product that has been marketed-the national class 1 new drug Yishengtai (the main ingredient is benaglutide), which is mainly used for adult type 2 Diabetes patients control blood sugar, which is still in the market introduction period.
In addition, there are multiple R&D pipelines, which are still at a loss
.

It is reported that Renhui Biotech was accepted for the IPO on the Science and Technology Innovation Board on February 14, 2020, and was inquired shortly afterwards
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According to the inquiry record on February 4, 2021, the China Securities Regulatory Commission required Renhui Biologics to explain sales expenses, whether there is an inflated operating income, research and development expenses, commercial bribery, and equity holdings

The listing failure of Renhui Biologics is not an isolated case.
According to the Beijing News, since 2019, there have been 19 pharmaceutical manufacturing, pharmaceutical research and experimental companies IPOs on the Sci-tech Innovation Board, most of which have been voluntarily terminated
.

Since the beginning of this year, a total of 10 biopharmaceuticals, pharmaceutical R&D and experimental companies have failed IPOs on the Sci-tech Innovation Board, which is higher than the total of the previous two years (4 in 2019 and 5 in 2020), of which 8 have voluntarily withdrawn
.

It can be seen from the above-mentioned companies that have failed IPOs that it is not easy to log on to the Sci-Tech Innovation Board
.

However, behind the high failure rate, there is also a high number of declarations

On October 13, at the China Biopharmaceutical Industry Innovation Conference, Lu Xiongying, deputy general manager of the Market Development Department of the Shanghai Stock Exchange, introduced that there are currently more than 200 biopharmaceutical companies in the capital market.
Since a batch of listings, biomedical companies have increased by more than 100 in the capital market, of which 75 are on the Science and Technology Innovation Board
.

In other words, in the past two years, more than 70% of biomedicine companies listed on the capital market have been listed on the Science and Technology Innovation Board, and 50% of biopharmaceutical companies listed in the history of the capital market have only been listed in the last two years
.

Lu Xiongying said that in addition to meeting the basic listing requirements, the most important thing for successfully logging on to the Sci-Tech Innovation Board is the innovation ability of the enterprise, which requires the enterprise to have sufficient science and innovation attributes to conform to the positioning of the Sci-Tech Innovation Board
.

To a certain extent, the number of listed pharmaceutical companies reflects the rapid development of China's biopharmaceutical industry, and companies are actively seeking to go public to obtain financial support

In fact, in addition to start-ups, some well-known pharmaceutical companies often spin off their subsidiaries for listing, such as Fosun Pharmaceutical's subsidiary Fuhong Henlius, CSPC's subsidiary Sinovel, and Kelun Pharmaceutical Twinings Biotechnology
.

It can be said that this is already a routine operation in the market, and its advantage is to increase the company's financing channels
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In addition, if the subsidiary obtains a higher valuation level, this will also drive the parent company's valuation to rise

02 Take multiple measures to help innovation

02 Take multiple measures to help innovation

In recent years, China's biomedical industry has achieved rapid development
.

According to data from the National Bureau of Statistics, in 2009, the output value of China's pharmaceutical industry exceeded RMB 1 trillion.
As of 2020, the market size of China's biomedical industry was RMB 3.
57 trillion
.

At the same time, the biomedical industry has grown from a relatively weak state in the past to currently occupy 1/5 of the pharmaceutical industry

In addition to the growth of scale, the innovation power of the biomedical industry has also been strengthened
.

In the first 8 months of 2021, China has approved the marketing of pianprilimumab, vedicitumumab, tetaxel, akirenseed, and religiolense injection and other products

A report recently released by IQVIA estimates that the global share of early-stage cancer drugs developed by Chinese biomedical companies has increased from 6% in 2015 to the current 18%; China’s total share of next-generation cancer biotherapy has reached 13%.
%
.

Lu Xiongying said that in accordance with national requirements, one of the tasks of the Sci-tech Innovation Board is to implement innovation-driven development.
In short, it is to use capital to help innovation
.

In addition to capital, the development of the biomedical industry is inseparable from the efforts of policies, talents, and industry mutual assistance

As a highly policy-oriented industry, the biomedical industry has won a better development environment with the help of a number of policy reforms
.

For example, the latest version of the "Drug Registration Law" in 2020 clearly defines four review acceleration channels, such as breakthrough therapy, priority review, and conditional listing, to accelerate the launch of innovative biological drugs
.

The “Announcement on Adjusting the Review and Approval Procedures for Drug Clinical Trials (2018 No.
50)” published by the China Food and Drug Administration in 2018 significantly shortens the time required for clinical trials of innovative drugs by adjusting the clinical trial application process for innovative drugs
.

At the same time, the growth of the biomedical industry park also provides fertile ground for the innovation and development of enterprises
.

Liu Tao, general manager of Guosheng Investment Baoshan Pharmaceutical Valley, said to Cyberland that after careful analysis of the needs of innovative drug companies, the biomedical industry park will provide corresponding assistance to the companies according to the different life cycles of the companies
.

For example, for the earliest start-up teams with only a few teams or some R&D technologies, well-decorated, well-equipped laboratories and public incubators can solve some carrier space problems
.

For large-scale pharmaceutical companies, talent policy and other aspects will also provide support for corporate development

Liu Tao said that when an enterprise enters the park, the most important thing is the development fertile soil and carrier platform provided by the park.
The platform needs to meet the development needs of the enterprise
.
This is not just a question of building a house, but also a lot of public utilities
.
For example, Baoshan trough inside each building can be steam supply, as well as storage of dangerous goods, waste water treatment, rainwater collection and processing, investment and financing services
.

The biopharmaceutical industry has a strong industrial agglomeration effect in the country and even in the world
.
Liu Tao believes that, generally speaking, if a company develops on an island, it must not have a long-term development
.
And industry gatherings bring win-win cooperation
.

With the support of various resources, the biomedical industry has achieved good development results.
I believe that in the future, we will develop better and better
.