It took a year and a half to complete a $230 million acquisition with Takeda; Xia Shaofei, a former vice president of Novartis' oncology business in the field of hematology and diseases, became the new CEO; and recently, Heysen Biopharma Co., Ltd. (China) (hereinafter referred to as "Haisen"), which has a state-owned background in Hefei, has once again entered our field of vision.
On March 31, Kangqiao Capital and Haisen jointly announced the completion of the acquisition of five drugs in the field of cardiovascular and metabolic drugs of Takeda Pharmaceutical, with a total transaction value of 230 million US dollars to acquire 5 products.
Why was Kangqiao Capital, which successfully incubated Celestial Creatures and Genting Shinyao, selected by Heyssen as the lead investor? Haisen, who has promised to invest 3 billion yuan to develop the pharmaceutical industry in Feidong County, will go where will he go after having the "assistance" of Kangqiao Capital? How are the assets in China that have been sold by MNC over the years developing now?
01 For the first time, state-owned assets took over the global TOP10 MNC assets
With the joint announcement of Kangqiao Capital and Haisen to complete the acquisition of five drugs in the field of cardiovascular and metabolic drugs of Takeda Pharmaceutical, the one-and-a-half-year acquisition of the world's TOP10 pharmaceutical companies that state-owned assets participated in for the first time has finally come to an end.
Heissen has completed the acquisition of five Chinese mainland exclusive rights to Takeda Pharmaceuticals' drugs in the cardiovascular and metabolic sectors, with a total transaction value of US$230 million. Kangqiao Capital said that the five drugs in the transaction are Takeda Pharmaceutical's star portfolio in the cardiovascular and metabolic fields sold in Chinese mainland, including Yanindine, Easy-Dhabi, Biolos, Besin and Echoto. According to Takeda Pharmaceutical's fiscal 2020 financial report (reporting period: April 2020 to March 2021), net sales of these five drugs reached nearly $129 million. In addition, Employees of Takeda Pharmaceutical Chinese mainland Internal Medicine Division responsible for related products will also join Heissen. According to Kangqiao Capital, more than 500 Employees of Takeda Pharmaceutical have joined the Haisen team since April 1, 2022, including a professional commercialization team.
After a year and a half, the asset delivery was finally completed. Why does a seemingly ordinary transaction attract the continuous attention of the industry?
Fast forward to December 2020, when Heysen announced the acquisition of Takeda Assets, the company was only three months old. Moreover, the "state-owned assets force" standing behind Heissen has also attracted attention.
According to Kangqiao Capital, Haisen is an innovative biomedical technology enterprise jointly invested and established by Kangqiao Capital, Hefei Production and Investment Group and Feidong County of Hefei City. According to Tianyan, on March 4, 2022, Haisen completed a series A financing, investors are Hefei Production and Investment Group, Ruimu Investment and Kangqiao Capital, of which Ruimu Investment was funded and organized by Feidong County, Hefei City. This transaction is also the debut of Hefei State-owned Assets' cross-border acquisition in the field of biomedicine.
Just one month after Haisen announced the acquisition of Takeda assets, in January 2021, Shan Guohong, president of Takeda Pharmaceutical China, Qian Kang, CEO of Heysen Pharmaceutical, and Wang Shuwu, member of the Standing Committee of the Feidong County Cpc Committee of Hefei City and executive deputy county governor, jointly participated in the "Hefei International Medical Port Pedestal Project Haisen Pharmaceutical Kick-off Meeting", and Haisen promised to invest 3 billion yuan to establish a pharmaceutical industrialization base in Feidong County. According to the data, Hefei has successfully cultivated three national strategic emerging industrial clusters such as new display devices, integrated circuits and artificial intelligence, but the biomedical industry has not been Hefei's strength. Obviously, the investment logic and strategic layout behind Heysen's acquisition of Takeda Pharmaceutical's business pipeline are self-evident.
The five drugs acquired by Heissen are all mature drugs that have been listed. As for why it chose to intervene in the mature drug market, Kangqiao Capital said that at the current stage, the commercialization platform determines to a certain extent whether innovative drugs can provide treatment for patients in a timely and effective manner. "Combining innovation and commercialization platforms is a key issue to be addressed and the key value that Canbridge Capital is currently addressing." Bridge Capital believes that Heyssen can combine innovation and commercialization to bring innovative medicines and therapies to patients with cardiovascular and degenerative diseases. On the other hand, there is still a large amount of unmet demand in the market. From the perspective of these 5 products, taking yanadine as an example, there are still many patients who do not use the product due to accessibility and doctors' cognition.
02 What can Kangqiao bring to Heysen?
In fact, before Kangqiao Capital became an investor in Haisen, there was another state-owned investment institution that also intended to cooperate with Heysen. Kangqiao Capital eventually became the lead investor of Haisen, what does Haisen value? What will Kangqiao Capital bring to Heyssen?
"The combined efforts of Kangqiao Capital, Hefei Production and Investment Group and Feidong County of Hefei City are a sample of hefei production and investment and the Feidong County Government working together to drive the landing of the industry with capital investment." Hefei Production and Investment Group, another investor of Haisen, said that the successful completion of the acquisition is a model for Hefei state-owned assets and market-oriented institutions to work together to promote industrial development in an innovative way. "Kangqiao Capital's pragmatism and professionalism are obvious to all, especially its in-depth understanding of the health industry and its ability to integrate resources." Wang Shuwu, deputy secretary of the Feidong County Party Committee and county magistrate, said, "The bio-innovative drug incubation platform under Kangqiao Capital has unique advantages, and I hope that with this project as a starting point, more and better biomedical projects can be introduced in the future to drive the development of the industry." ”
As the lead investor, from the initial minority equity investment to the active investment model of "incubation + investment + operation", Kangqiao Capital, which focuses on the incubation, investment and operation of the life and health industry, has obvious competitive advantages among a number of investment institutions.
Kangqiao Capital has rich experience in creating medical enterprises and cross-border mergers and acquisitions, and at the same time has a deep understanding of the health industry and the ability to integrate resources. Kangqiao's unique "investment + operation" strategy has built a strong global healthcare ecosystem in the past 7 years, and Kangqiao Capital told E-drug managers that Kangqiao Capital has helped its portfolio companies complete 9 initial public offerings and successfully incubated 12 life and health companies.
By the end of 2021, the total assets of its controlled biological companies and medical device companies have exceeded $30 billion. Fu Wei, CEO of Kangqiao Capital, was interviewed by E-drug managers before, and today's Kangqiao Capital is no longer a simple venture capital fund or private equity fund, or a holding investment fund, but can already complete the process of a company from 0 to 10 to 100, and can provide them with corresponding funds, talents, resources and information support at any stage of the enterprise.
Hefei Production and Investment believes that Kangqiao Capital has successful experience in post-investment operation and industrial integration, and Hefei will work with Kangqiao Capital to promote the development of Haisen and build Haisen into the industrial base of Hefei biomedicine. Kangqiao Capital's association with the Hefei Municipal Government because of the Haisen Project coincided with the concept of the two sides, and in the process of close cooperation and efficient collaboration, which also promoted the smooth completion of the transaction.
Where will The entry of Cambridge Capital lead Heysen to? In an interview with the manager of E-drug, Kangqiao Capital revealed that it will build Heysen into a core sales platform in the fields of cardiovascular, general medicine and degenerative diseases according to the advantages of Heysen.
Heyssen's strengths are outstanding. "We have acquired a very good combination of cardiovascular and metabolic drugs through this acquisition, and we also highly recognize the professional team of Takeda China Internal Medicine Division, welcome them and look forward to working with them." Kangqiao Capital revealed that it hopes to take Haisen as the basis to fully integrate and consolidate commercialization capabilities, expand product portfolio, and introduce innovation pipelines, so that Haisen will become a leading pharmaceutical enterprise in China with both commercialization capabilities and innovative product pipelines.
At the same time, "This acquisition of Haisen will help Kangqiao Capital further build a first-class basic disease drug platform in Asia." Kangqiao Capital said that Haisen is a member of Kangqiao Capital's medical and healthcare ecosystem, and like other invested companies, Kangqiao Capital will provide strategic and operational support to further accelerate The growth of Heysen.
03 What happened to the assets sold by MNC?
Divesting some products or businesses is nothing new in the strategic adjustment of multinational pharmaceutical companies in China.
After 2016, with the licensor holding system for listed drugs, the transfer of product rights of multinational pharmaceutical companies in China has occurred frequently. Its purpose is to achieve cost reduction and transformation and upgrading by divesting their respective non-core businesses and cutting out a large team; or under some pressure, "tearing down the east wall to make up for the west wall" to save itself.
Affected by the expiration of patents, the impact of generic drugs, and the impact of volume procurement, the impact on the performance in China has forced multinational pharmaceutical companies to "break away" can be seen as the first major reason. With the reform of the mainland drug review and approval system and the continuous advancement of consistency evaluation, the "dividend period" of original research drugs in the Chinese market is in the past, and it is a better choice to split mature products or directly sell mature original drugs and focus on new drug research and development in disease areas with higher returns.
This can be seen from the recent sale of the first and third total businesses in China. On April 1, 2022, 133 (China) signed an equity transfer agreement with Chongqing Yaoyou Pharmaceutical Co., Ltd., an important holding subsidiary of Fosun Pharma.
According to the information released, the first and third communists (China) transferred the production and sales rights of the colabitol preparation in the mainland region and the full equity of the production company that produced the preparation to Chongqing Yaoyou, and it is expected to complete the transfer at the end of August this year, and the transfer price of this transaction has not been disclosed.
Divesting non-core businesses and placing a strong bet on ADC drugs in the oncology field are seen as the starting point for the strategic adjustment of the first and third totals. Previously, the first three have been reported to merge cardiovascular, anti-infection, respiratory analgesic lines and the corresponding product line layoffs. In addition, the production and sales rights of 11 mature drugs in Japan, including the antihypertensive drug Acecol and the antibacterial drug Banan, were transferred to Alfresa Pharmaceuticals, a holding subsidiary of Alfresa.
In such a domestic industry background, in addition to the transformation of the first and third totals, there are roche, Eli Lilly, GSK, Novartis and so on. Who is its "takeover party" in China has also attracted much attention.
It is reported that when multinational pharmaceutical companies choose partners in the Chinese market, they mainly take the international level of intellectual property protection capabilities, reputation and compliance levels as the first three key projects.
In March 2018, Roche Pharmaceutical China granted Yiteng Pharmaceutical the right to promote and distribute its recombinant human erythropoietin product (Rochmann) within the scope of Chinese mainland. With the goal of becoming a leading supplier of patents and branded drugs in China, YiTeng is a Pharmaceutical Company founded in Hong Kong in 2001, which has continuously cooperated with multinational pharmaceutical companies to reach more than 20 exclusive drug distribution agreements. With this acquisition, the latter will strengthen its core competencies in the treatment of critical illnesses such as nephrology and further enrich its product portfolio.
In addition to Roche, in April 2019, Yiteng Pharma also acquired the rights of Eli Lilly's antibiotic products "Hitelao" and "Stable trust" in Chinese mainland and the "Hitelao" production plant in Suzhou. As early as the end of 2016, it has obtained the promotion and distribution rights of these two products in mainland China.
In March 2021, Roche also granted baerheal Medicine the marketing rights of capecitabine tablets (siroda) and erlotinib hydrochloride tablets (trokai) in Chinese mainland, thereby promoting the market layout of oncology drugs.
In July 2019, GlaxoSmithKline Pharmaceuticals (Suzhou) resold 100% of the shares to Chongqing Yaoyou Pharmaceutical Co., Ltd. and obtained the drug registration approval and production facilities for the chronic hepatitis B drug Lamivudine tablets (specification: 0.1g). GSK (Suzhou) Lamif tablets (specification: 0.1g) in 2018 in China domestic sales of about 422 million yuan.
In September 2019, Novartis transferred 100% of the equity of Suzhou Novartis Pharmaceutical Technology Co., Ltd. after the divestiture of technology and drug development assets to Jiuzhou Pharmaceutical for 790 million yuan. Within 5 years from the closing date of the transaction, Jiuzhou Pharmaceutical will supply NOVARTIS Group's APIs or intermediates for three pharmaceutical products whose indications are anti-heart failure treatment, breast cancer treatment and leukemia treatment.
In addition to the above-mentioned "takeover case" of multinational pharmaceutical companies' business in China, there is also a transfer that has not yet yielded results.
Mundipharma International Ltd., which began selling its Chinese division in 2021, has so far seen no "takeover party". At the time, the price of the deal was reported to be expected to exceed $1 billion.
Mengti Pharmaceutical is a multinational pharmaceutical company engaged in the research and development, production and commercialization of analgesic drugs, and has the largest professional anesthesia and psychotropic drug production plant in China. In addition to Mengti Pharmaceutical, Purdue Pharmaceutical is also owned by the Sackler family, Mengti Pharmaceutical is responsible for the overseas agent sales of Purdue Pharmaceutical including Ausch Kangding, Merccontin and other products, and entered the Chinese market in 1993, the core products listed in China mainly include cancer pain, non-cancer pain, perioperative pain, consumer health care products 4 major areas of 9 products.
According to Tu Suoji, it is not difficult to find that Meng Ti's sale of China business this time is more like a self-help behavior of "demolishing the east wall to make up for the west wall".
Suspected of "playing a key role" in the serious opioid abuse crisis in the United States, the Sackler family is mired in sky-high compensation on Purdue Pharmaceuticals. In October 2020, the U.S. Department of Justice announced an agreement with Purdue Pharmaceuticals, which pleaded guilty to three felonies, including conspiracy to commit fraud, violations of the Federal Food, Drug, and Cosmetic Act, and complicity in violation of federal anti-kickback laws, and faced $8.3 billion, and the Sackler family had to relinquish ownership and control of the company and pay an additional $225 million to settle a civil lawsuit filed by the Department of Justice.
Therefore, this is also seen as the reason why the Sackler family had to sell another asset of its mengdi pharmaceutical business in China.
In the planned sale of Mondial China, the Sackler family also filed a $4.3 billion settlement with the acquirer to acquire another pharmaceutical company, Purdue Pharma, to resolve its ongoing opioid lawsuit in the United States. Previously, Purdue Pharmaceuticals filed for bankruptcy in 2019 due to nearly 3,000 lawsuits.