In recent years, the cross-border mergers and acquisitions of Chinese pharmaceutical companies have obviously increased, in addition to industry-specific factors, the national industrial policy to guide the concentration of the industry is also an important driving force in the context of rapid concentration of the domestic industry, a number of pharmaceutical companies trying to promote Internationalization of enterprises, grafting advanced foreign technology, looking for new markets, enhance their competitiveness, cross-border mergers and acquisitions will become more and more Chinese pharmaceutical companies choice.
For a long time, the pharmaceutical industry is a hot industry in international cross-border mergers and acquisitions, and in recent years, the rapid development of China's pharmaceutical industry and cross-border mergers and acquisitions have gradually become an important path for the development of Chinese pharmaceutical enterprises.
Industry characteristics decided to mergers and acquisitions frequently
Cross-border M & A Investment Services Platform "The first three quarters of cross-border M & A trend in the first quarter of 2017" released by the Ezekiel report shows that in the first three quarters of this year, the healthcare sector accounted for 13% of the cases of cross-border mergers and acquisitions in China, The industry's second largest M & A hot spot industry completed a total of 32 cases of cross-border mergers and acquisitions, up from 21 in the same period of 2016, involving an amount of 4.7 billion U.S. dollars, up from 3.78 billion U.S. dollars in the same period of 2016.
This is not a coincidence, as cross-border mergers and acquisitions (M & A) in China are gradually becoming the choice of more and more Chinese pharmaceutical companies, as the number of cross-border mergers and acquisitions by Chinese pharmaceutical companies and the amounts involved have broken the previous record in 2016. This What are the reasons for the trend?
Throughout the global M & A market, the pharmaceutical industry has always been a hot area.Reportedly, over 80% of the products of Roche Pharmaceuticals, a well-known Swiss pharmaceutical company, have come from expansion of product lines formed by various forms of mergers and acquisitions.At Johnson & Johnson, Pfizer and others M & A also plays an important role in the development and expansion of large international pharmaceutical companies.
A researcher at the pharmaceutical industry told Economic Daily that the industry characteristics of the pharmaceutical industry determine the characteristics of their industries that are more frequently acquired. The pharmaceutical industry is capital-intensive and technology-intensive with high barriers, strict supervision and drug discovery A lot of uncertainty, through the mergers and acquisitions can spread the risk and speed up the project.
For pharmaceutical companies, the development of new drugs takes a long time, and some innovative drugs from the project to the market even need more than a decade.Anto the M & A enterprises, the choice of mergers and acquisitions with research and development capabilities of small pharmaceutical companies, you can quickly broaden Product line, cut into new areas.Makeover between large pharmaceutical companies often means that M & A companies, hoping to break through the merger and acquisition of the existing market structure, into a larger new market areas.
Supervision is also an important reason for frequent mergers and acquisitions in the pharmaceutical industry.Regional regulatory agencies, represented by the U.S. Food and Drug Administration (FDA) and China's State Food and Drug Administration, are extremely strict in reviewing and approving drugs. The procedures are complex and products At any time are facing the risk of being difficult to pass the review and approval because of clinical failure.Each new drug can be successfully marketed, require companies to pay high costs, take great risks.So whether there is a strong cost and risk tolerance, It will become an important factor for the steady development of pharmaceutical companies.For small pharmaceutical companies, in a certain stage of product development process, to accept the merger of large pharmaceutical companies, you can maximize the benefits, minimize the risk.
Industrial policy boosts mergers and acquisitions
In recent years, the cross-border mergers and acquisitions of Chinese pharmaceutical companies have obviously increased. Apart from industry-specific factors, the national industrial policy has also led to the concentration of the industry to be promoted.
In recent years, the national pharmaceutical industry policies have been promulgated frequently and supervision on the pharmaceutical industry has been intensified. Under the background of health insurance control fees, elimination of drug additions and implementation of the 'two-vote system', the entire pharmaceutical industry began to enter the stage of survival of the fittest. In addition, in recent years, the frequent pressure on environmental protection policies has significantly raised the environmental protection requirements for pharmaceutical companies, and some pharmaceutical enterprises that are hard to meet environmental protection requirements have gradually become less competitive. The reshuffling of industries has accelerated and the degree of concentration has been increased, accelerating the mergers and acquisitions of domestic pharmaceutical enterprises .
Ai Mei Shi market research firm's analysis shows that as of the first half of this year, China has more than 3,000 pharmaceutical companies, but the top 100 contributed more than 60% market share, leaving the remaining more than 2900 companies less than 40 % Of the market share, we can see that the concentration of China's pharmaceutical market is getting higher and higher.The report holds that, in accordance with the current trend, the concentration will be more pronounced in the future.
The industry believes that this trend is the pharmaceutical industry, an important symbol of the gradual improvement of the market in the pharmaceutical market has been highly mature in the United States, the industry is very high concentration, gave birth to Johnson & Johnson, Pfizer, Merck, Gilead, Albert, Amgen , Lilly and a large number of high market value of pharmaceutical companies such as Johnson & Johnson's market value has more than 300 billion US dollars, in contrast, the listed pharmaceutical companies in China, the highest market value of Hengrui medicine only about 200 billion yuan, there are still Obvious difference.
Against the background of rapidly increasing industry concentration in China, some pharmaceutical companies try to promote the internationalization of enterprises, grafting advanced foreign technologies, finding new markets and enhancing their own competitiveness. As a result, multinational mergers and acquisitions have become the choice of more and more Chinese pharmaceutical enterprises Among them, Fosun Pharma has taken a very active and proactive approach in this regard.
In October of this year, Fosun Pharma announced that it has completed the largest overseas acquisition by Chinese pharmaceutical companies to date with the completion of the transaction for the acquisition of a 74% stake in Indian generic drug company Gland Pharma for 7.142 billion yuan Gland Pharma is the leading injection imitation Drug manufacturing enterprises, but also the first in India received the FDA approval of the injection drug manufacturing enterprises, the largest single product of heparin is the world's largest clinical dose of anticoagulant drugs.
Commenting on the significance of the merger, Chen Qiyu, chairman of Fosun Pharma said: "China and India are highly complementary in the pharmaceutical field. The grafting of resources by Chinese and Indian pharmaceutical companies represented by Fosun Pharma and Gland Pharma will have Which will help promote the internationalization of Chinese pharmaceutical companies in the R & D and innovation and export of generic drugs. '
In addition, Fosun Pharma recently completed the acquisition of Tridem Pharma, the third-largest pharmaceutical distribution company in the French-speaking West African region, and a complete acquisition of Hanlin Biotech, a Taiwan antibody research and development company.
Except for Fosun Pharma, Shanghai Pharmaceuticals, Xianju Pharmaceutical and Sanpower Group have all completed major cross-border mergers and acquisitions this year, with many companies saying that cross-border mergers and acquisitions will help them to promote their pharmaceutical manufacturing business Industrial upgrading, accelerate the process of internationalization of enterprises, enhance their competitiveness.
Cross-border mergers and acquisitions risk can not be ignored
However, M & A does not mean that enterprises expect the industrial upgrading and internationalization process to be realized smoothly and quickly. To make M & A play an active role, enterprises need to face many challenges, which may well be outweighed by the adverse consequences.
Review the history of mergers and acquisitions in the field of medicine, mergers and acquisitions ineffective and even led to declining business case abound.Askley, Johnson & Johnson, Merck and other large international pharmaceutical companies have suffered heavy spending M & A has not reached the expected situation.Recently a The case is the Israeli pharmaceutical company Teva Pharmaceutical, in its $ 40 billion acquisition of the AI Generic Drugs business in order to avoid the risk of reviewing failed to achieve all the acquisition targets, eventually carrying a huge debt, the market acquisition Resulting in many negative comments.And in the second quarter of this year, the company's performance is less than expected, the stock price is once again a serious decline.
The same risk also exists in cross-border mergers and acquisitions of Chinese pharmaceutical companies.Study out of a think tank put forward the Chinese enterprises overseas M & A process may exist in many problems: First, there are some businesses blindness, for overseas mergers and acquisitions The purpose and necessity of basic work such as inadequate research, eager to become bigger and stronger, there are some follow the trend of showing off the irrational factor-driven; Second, a small number of overseas mergers and acquisitions facing high debt financial risks; Third, Chinese enterprises in overseas mergers and acquisitions When faced with the interference of foreign security review, repeatedly rejected, increasing the risk and uncertainty of mergers and acquisitions.
In some past M & A cases in the pharmaceutical industry, there are many cases in which pharmaceutical companies do not know the value of the M & A product and the value is too high. The end result is that the pharmaceutical companies spent a great deal of money on M & A and the products failed to be obtained The market is widely recognized.
In addition, pharmaceutical companies should also make full preparation for the difficulty of business integration. 'Taking the differences in management methods as an example, the management style of Chinese management teams is often very different from that of foreign companies. After the completion of the merger , How to achieve smooth mergers and acquisitions is crucial to the effectiveness of the mergers and acquisitions. "According to the former pharmaceutical industry researcher, in the past some successful mergers and acquisitions, the original management of the merged enterprise or the new management team composed of local teams Often play an important role, because they are more familiar with local culture and law.
