Coron bought Stone IV! Big infusion giant fight began

Pharmaceutical Network Nov. 21 hearing with the 'Restriction Order' and large escalation regulatory policy escalating, infusion industry reshuffle and shuffle into the giant fight.

'Can take medicine without injections, injections can not infusion' This is the WHO advocated the basic principles of medicine, but in our country per capita infusion of 8 bottles / bag, is the international 2.5 to 3.3 bottles / bag average of about 3 times .

In August, Cerberus published an article titled "Limitations on Escalation of Transfusion, Reshuffle or Exacerbation of the Industry," in which he predicted that in the near future the infusion industry will face a reshuffle and mergers and acquisitions among large infusion companies will intensify and market concentration will Gradually increase.

Yesterday (January 20), China's infusion giant Cologne Pharmaceutical announced that it has purchased 571 million shares of Hong Kong stock Shi Si Yao Group, accounting for 20.0497% of the total share capital of the company, and participated in the operation and management of Shi Si.

This is the first clear merger between China's major infusion giants.After Previously, Coron Pharmaceutical and the Shi Si Group and its previous Lijun Pharmaceutical have the intention of mergers and acquisitions, but was rejected by the HKEx in 2015. In 2015 Since the beginning of the year, it has steadily increased its stake in Shek Si Pharmaceutical Group to more than 20%.

Relevant regulatory policies throughout the escalating

Limitations of large transfusions begin with the 'resistance limit' because most antibiotics require large transfusions as the vehicle.

Then it is clear that in 2014 Anhui Provincial Health Planning Commission announced a list of 53 kinds of diseases do not need infusion, followed by more such as Fujian Sanming, Yunnan Gejiu, Xinjiang Urumqi and other regions hospital Issued outpatient infusion related regulatory policies.

In 2015, the Office of Health and Family Planning Commission of Jiangsu Province, "Forward Notice on Further Strengthening the Management of Clinical Applications of Antibacterial Drugs" requires strengthening supervision of transfusion, involving about 460 hospitals in Jiangsu Province.

At the end of July this year, the Guangdong Provincial Health Planning Commission formally issued the "Circular on Strengthening the Management of Intravenous Infusion in Grass-root Health Care Institutions". Since the management and restriction of large transfusion fluids are more stringent and involve a wider scope, medicine Circle caused a powerful response.

Large areas around the escalating infusion regulatory policies and measures in China's large infusion terminal market also responded.

According to inquiries related information shows that China's large-capacity injection production enterprise There are more than 400, large infusion market has more than 110 billion yuan.

According to the prospectus of Tiansheng Pharmaceutical IPO, the sales volume of the bulk infusion market in China also increased from 70.947 billion yuan in 2011 to 115.15 billion yuan in 2015, with an average annual compound growth rate of 12.87%. The growth in 2015 and before is still relatively stable, Are more than 10% .I predict that in 2016 the market growth rate of 7-8%, the market size has touched 120 billion yuan mark.

(Note: The data comes from TIN SHENG PHARMACEUTICAL IPO prospectus)

Big infusion giants should be between the two companies want to integrate resources to achieve economies of scale, increase profits, to deal with escalating restrictions on the implementation of large-infusion policies and measures; and the stone four drug companies would like to shift their focus to non-infusion drug market.

Side of the box, Coron Pharmaceutical is China's largest infusion market leader, from the market point of view, accounting for about 15% of our infusion market share.

From the business sales revenue, Coron Pharmaceutical infusion plate business revenue in 2016 has exceeded 6 billion yuan, accounting for more than 70% of the entire business sales, but its growth rate was only 1.35%; according to semi-annual report in 2017, Half of the large infusion plate business nearly 32 billion yuan, although the growth rate has risen, but still less than 10 percentage points.

On the other hand, although the four drugs in Shijiazhuang is one of the pharmaceutical companies in China whose main business is infusion, the upright soft bag, double-hose and double-hard standard soft bag are the dominant products of the enterprise. , Shi Si Yao Group in recent years to strengthen the development of non-infusion business intention and action is obvious.

More recently, Shihsi Pharmaceutical Group's mergers and acquisitions have taken the non-infusion enterprises as the targets of mergers and acquisitions, and more clearly at the conference on March 29, 2016, at which Shi Xiangyu, Executive Director of Shi Si Yao, pointed out that two years ago With restrictions on the continuous infusion of liquid policies and measures, the large infusion market is already saturated, making it clear that there will be no mergers and acquisitions in the large infusion market in the future. Large infusion is a large-scale product but will not give up the opportunity of acquiring other complementary products.

Can be seen, Coron Pharmaceutical and Stone Fourth Pharmaceutical Group's equity mergers and acquisitions Lang Lang concubine Italy, you Lennon I Lennon.

From the perspective of the regulatory policies for large transfusion, the more and more strict restriction is an inevitable trend, because the perspective of drug safety is harmful to people's health because of excessive infusion, and abuse and abuse should be supervised and checked.

However, on the other hand, China's infusion industry is essentially structural excess capacity.According to the data show that 60% to 70% of our infusion products are still mainly concentrated in the field of low-end common infusion, high-end products such as dialysate, enteral The new type of parenteral nutrition solution, therapeutic infusion and other varieties of production is very small, clinically such infusion or mainly imported.

Coron Pharmaceutical buy Stone IV equity is definitely not just as a financial investment, as can be seen from the announcement, Coron Pharmaceutical according to the relevant Regulations Can recommend candidates to the company, to participate in business management.

According to public information, Shi Si is a relatively high-grade soft bag upright infusion, and although Cologne is a large infusion market leader in China, but still relatively low-end glass bottles, ordinary bags Infusion based.

According to public information, Cologne Pharmaceutical infusion market share of about 15%, while the China Resources Double Crane, Shi Si Yao Pharmaceutical Group, Chen Xin Pharmaceutical, Shandong Qi are pharmaceutical companies such as the market share of 3% -5% Through this merger, Cologne's market leadership is expected to strengthen.

The author believes that Coron Pharmaceutical's acquisition of the stake in Shi Si Pharmacy is just the beginning of the M & A and transformation and upgrading of the infusion market. The industry reshuffle only started. The market concentration will increase substantially through mergers, reorganizations and elimination of backward enterprises.