Recently, Kangchen Pharmaceutical (603590) launched a fixed capital increase plan to enter the orthopedic drug market through mergers and acquisitions.
On the evening of April 21, Kangchen Pharmaceutical issued an announcement that it intends to raise no more than 400 million yuan for the acquisition of Migai interest assets, and the object of issuance is Wang Xijuan, one of the actual controllers of Kangchen Pharmaceutical, and the company's first phase of employee stock ownership plan; after the completion of the transaction, Migai interest assets will be included in the scope of Kangchen Pharmaceutical's consolidated statements.
Kangchen Pharmaceutical said that Migai interest assets are mature and stable orthopedic drug assets, with good profitability and great growth potential, and the operating income and net profit scale of listed companies are expected to be improved by a certain extent.
The actual controller intends to subscribe for more than $300 million
According to Kangchen Pharmaceutical's pre-increase plan, the issue price of the non-public offering of shares is 31.54 yuan per share, which is not less than 80% of the company's stock price in the 20 trading days before the pricing benchmark date.
Kangchen Pharmaceutical said that if the actual net amount of funds raised is less than the total amount of funds raised that are planned to be invested in the above-mentioned fund-raising investment projects, the insufficient part will be solved by the listed company with its own funds or through other financing methods.
From the perspective of subscription objects, Wang Xijuan, one of the actual controllers of Kangchen Pharmaceutical, intends to subscribe for 10.3043 million shares with a subscription amount of 325 million yuan, and the employee stock ownership plan intends to subscribe for 2.378 million shares, with a total subscription amount of 75 million yuan, and the large cash subscription of the actual controller highlights the confidence in the development of listed companies.
Up to now, Liu Jianhua, as the largest shareholder, holds a total of 37.74% of the shares, which is the controlling shareholder of Kangchen Pharmaceutical; Wang Xijuan indirectly holds 10.15% of the shares of Kangchen Pharmaceutical, and the two hold a total of 47.9% of the shares of the company, which is the actual controller of the listed company.
It is worth mentioning that the total number of employees participating in the employee stock ownership plan does not exceed 305. Among them, a total of 5 directors and supervisors participated in the employee stock ownership plan, 2 directors and 2 senior managers all contributed 2.4 million yuan, accounting for 3.2% respectively; employee supervisors contributed 700,000 yuan, and other employees of Kangchen Pharmaceutical contributed 64.7 million yuan, accounting for 86.27%.
In this regard, Kangchen Pharmaceutical said that the listed company intends to introduce the first phase of the employee stock ownership plan as a strategic investor, exert synergy effects, improve the benefit sharing and risk sharing mechanism between employees and all shareholders, and enhance the company's internal cohesion and market competitiveness.
Entered the orthopedic drug market
In August 2018, Kangchen Pharmaceutical officially landed on the capital market, which is an innovative pharmaceutical enterprise with innovative drug research and development as the core, clinical demand as the orientation, and research and development, production and sales as one.
It is worth mentioning that Kangchen Pharmaceutical's product "Su Ling" is currently the only national first-class innovative drug in the domestic hemothrombin preparation market. In 2018, Kangchen Pharmaceutical's "Su Ling" product achieved revenue of 971 million yuan and net profit of 264 million yuan, with steady profitability.
In addition to independent research and development, Kangchen Pharmaceutical actively looks for investment and mergers and acquisitions in areas with greater market potential or characteristics to achieve the supplementary enrichment of the company's existing product line, and it is in this context that Kangchen Pharmaceutical chooses to enter the field of orthopedic drugs through epitaxial mergers and acquisitions.
On the evening of April 21, Kangchen Pharmaceutical issued an announcement that the listed company, subsidiaries and relevant entities signed an agreement on the payment of cash for the purchase of assets. The agreement stipulates that Kangchen Biologics, a wholly-owned subsidiary of Kangchen Pharmaceutical, will pay 900 million yuan in cash to acquire 100% of the equity of Tailing International after business restructuring to achieve the acquisition of Migai's assets; after the acquisition, Tailing Asia, a subsidiary of Tailing Pharmaceutical, will increase the capital of Kangchen Biologics by 360 million yuan and hold 40% of the equity of Kangchen Biologics.
At the same time, Kangchen Pharmaceutical, Kangchen Bio and other relevant entities such as pfenex and Tailing Pharmaceutical signed relevant agreements, that is, Kangchen Bio obtained the right to operate commercially in China, Hong Kong, Singapore, Malaysia and Thailand in the form of license-in.
Kangchen Pharmaceutical said that through the acquisition of Migai interest assets and the acquisition of Teriparatide commercial rights, it will enter the orthopedic drug market, and Migai interest assets will be included in the scope of the consolidated statements of listed companies to optimize the business layout.
According to the agreement, the counterparty undertakes that during the period from 2021 to 2023, the net profit of the Migai interest business within the scope of Kangchen Bio's consolidated statements will not be less than 0.8 billion yuan, 100 million yuan and 120 million yuan, respectively.
The market share of the assets to be acquired is relatively high
In fact, kangchen pharmaceutical's proposed acquisition target has obvious advantages in the field of orthopedic original research drugs, and its market share is relatively high.
According to the announcement, as the original research drug, Migaisi products have a strong competitive advantage, and after entering the Chinese market, they have maintained a continuous leading position in the subdivision of salmon calcitonin, and their market share has continued to exceed 50% in recent years. With the rapid growth of the market space of osteoporosis treatment drugs in the future, its market space and profitability have great potential for development.
As the only domestic listed bone formation promoter prescription drug, the market segment has grown rapidly, and there are fewer similar competitors in the domestic market, except for Eli Lilly forteo products, other competitors are biosimilar drugs developed by domestic manufacturers.
After Kangchen Bio obtains the commercial operation right of teriparaptide developed by pfenex and completes the registration of imported drugs, it will become the second imported drug of teriparatide in China, with a strong competitive advantage.
According to ims statistics, the global market size of teriparatide reached $1.929 billion in 2018, and the market space is large. As the only bone formation promoter prescription drug listed at home and abroad, the market segment has grown rapidly, and there are fewer similar competitors in the domestic market, except for Eli Lilly forteo products, other competitors are biosimilars developed by domestic manufacturers.
In the future, Kangchen Pharmaceutical will use Kangchen Biology as a platform to lay out a variety of drugs and medical devices in the orthopedic field through acquisition, license-in, independent research and development, etc., so as to build Kangchen Biology into a biomedical enterprise focusing on the orthopedic field.
This article originated from Securities Times E Corporation
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