From January 30, 2015, when Obama proposed the American Precision Medicine Plan, until now, the major fields of precision medicine have been almost occupied by start-up companies. Of course, listed companies will not miss the dividends of precision medicine. In addition to participating in startup companies, mergers and acquisitions are another main way for listed companies to get involved in precision medicine.
"The combination of the field of medicine and precision medicine, for listed companies, given that precision medicine is still in the infancy stage of technology, mergers and acquisitions are more convenient, and the foot is inserted first, but it is still difficult to judge whether it can come out in the end." Zhou Rui, the "first brother of medicine" of Fu Fund, said in an interview with a reporter from China Business News at the Bio4P, 2016 Precision Medicine Innovation Forum held recently.
"In the next two to three years, there will be many mergers and acquisitions in the field of precision medicine." Zhou Rui said. Today, Gene Taolue will sort out the mergers and acquisitions cases and characteristics in the field of precision medicine.
Small company research and development + large company mergers and acquisitions become the mainstream model
In 2016, there was no more merger and acquisition case in the field of precision medicine than Berry and Kang’s backdoor listing of Tianxing Instruments in the A-share market, which is currently awaiting review. On the evening of August 29, Tianxing Instrument, which had been suspended for two and a half months, disclosed a major asset restructuring progress announcement, and planned to sell all its current assets, liabilities, business, personnel and other stock business assets to Chengdu Tianxing Instrument (Group) Co., Ltd. or its designated third parties. At the same time, it issued shares to all shareholders of Berry Hekang to purchase 100% of the shares of Berry Hekang held by them.
Established for six years, Berry Hekang has been riding on the marketization of non-invasive prenatal genetic testing since its inception. In 2011, it received US$17.8 million in Series A financing from Legend Capital, and in mid-2013, it received another 25 million. The USD Series B financing was led by Qiming Venture Partners. Subsequently, Berry seized the opportunity of commercialization of non-invasive prenatal genetic testing from 2014 to 2015, and became another leader after BGI in the field of non-invasive prenatal genetic testing. In 2016, Berry's new development was the backdoor landing of A shares.
In the future, from a global perspective, "small company R&D + large company mergers and acquisitions" may become the mainstream business model of precision medicine.
On May 31, 2016, the Wall Street Journal reported that Irish biopharmaceutical company Jazz Pharmaceuticals (JAZZ) will acquire Celator Pharmaceuticals (CPXX) for $1.5 billion, a price roughly twice the market value of Celator Pharmaceuticals.
Celator Pharmaceuticals is a well-deserved star of the US stock market in 2016. After the company suspended trading on March 14, the company announced that the company's new drug VYXEOS has been clinically proven in Phase III to significantly improve the overall survival rate of high-risk patients with acute myeloid leukemia (AML). . The company resumed trading the next day, and the stock price soared 400% in a single day, and then continued to rise. As of May 31, the closing price was $17.53. It has risen nearly 10 times in 3 months, leading the entire Nasdaq market.
Medical mergers and acquisitions have gradually become the main way of capital exit globally. Take Israel, where entrepreneurship in the medical field is booming, as an example. After the start-up companies have grown to a certain level, there are many cases of choosing to exit through mergers and acquisitions. Wu Han, an investment manager who shares investment, enjoys investment and invests, introduced to the first financial reporter that from 2005 to 2014, a total of 62 companies in the Israeli medical and health industry were acquired, and the average operation time of the acquisition of medical and health industry companies was 12.3 years. It takes an average of 8.68 years from first financing to M&A exit. However, this is mainly because the sub-sectors such as biomedicine and biotechnology have lengthened the capital return period, and the investment cycle of ordinary medical enterprises is relatively short.
In China's capital market, cases of listed companies' mergers and acquisitions into precision medicine already exist, and mergers and acquisitions also increase the space for listed companies to tell stories. In October 2015, Xinri Hengli announced that it would acquire 80% shares of Boya Stem Cell for 1.566 billion yuan, and Boya Stem Cell became a holding subsidiary of Xinri Hengli. On November 23, 2015, the shareholders' meeting passed this resolution, Rihengli took this opportunity to enter the field of biomedicine.
On May 11, 2015, Xinkaiyuan announced that the company intends to acquire 100% equity of Sanji Bio, Heer Medical and Jingneng Bio through the non-public issuance of shares to specific objects, and pay 13.20 yuan per share to 3 specific objects. An additional 13.71 million shares of supporting funds of RMB 154.6 million were used for the integration of target assets and the arrangement of operating funds. Xinkaiyuan also entered the field of in vitro diagnostic services such as early tumor diagnosis, molecular diagnosis, and gene sequencing through this acquisition.
At the same time, listed companies will also choose to set up M&A funds to enter into precision medicine and choose investment targets on a global scale. In February 2016, Lepu Medical announced that it planned to use self-raised funds of US$95 million to jointly invest with Yantai Minhe Deyuan Equity Investment Management Center (Limited Partnership) to establish a global precision medicine innovation investment fund with a total scale of no more than US$100 million. At present, the fund has invested in the US Quanterix company in the field of liquid biopsy, investing 11 million US dollars, participating in its D round of financing in the form of capital increase, and obtaining 5.35% of its equity.
Mergers and acquisitions among startups
Wang Yang, investment director of Songhe Capital, who has been paying attention to the investment in the primary market of precision medicine, told the First Financial Reporter that in 2017-2018, there is a possibility of industry reshuffle in the precision medicine industry. Mergers and acquisitions do not only happen in public companies, but also between these startups. This coincides with Zhou Rui's prediction.
Wang Yang believes that there are currently more than 600 domestic genetic testing companies. Most companies have obtained angel or Series A financing in the capital boom in the past two years, but the follow-up investment and financing process is obviously tight, because on the one hand, the performance growth and profits are lower than expected, and the ideal is greater than the actual; on the other hand, the company's valuation is generally On the high side, the strength of receiving orders is weak, and financing cannot form an effective connection. Therefore, in the future, some companies may continue to grow into large companies through financing, and some may complete asset reorganization through mergers and acquisitions.
After experiencing the market explosion of non-invasive prenatal genetic testing, the development of domestic precision medicine is more focused on the field of oncology. However, at present, several leading (gene sequencing) companies in the domestic (oncology field) have tested tens of thousands of patients in the past few years. There are 4.3 million new cancer patients in the country every year. The total market share of all companies is extremely high. Low. The industry is still in the education market stage, policymakers, investors, corporate practitioners, doctors and patients all need education.
The popularity of the capital market in the previous stage does not match the development speed of the industry itself, and there will be a certain process of squeezing the "bubble". And some companies with good prospects are also "buying, buying and buying" on a global scale to rapidly enhance their own strength.
iCarbonX, founded by the team led by Wang Jun, the former CEO of BGI, raised nearly RMB 1 billion in Series A financing in April 2016 and was led by Tencent. Later, iCarbonX also began to use mergers and acquisitions to "conquer cities and conquer territories" in the field of precision medicine. ". On September 15, 2016, iCarbonX announced the establishment of an Israeli R&D center and the acquisition of Imagu Vision Technologies, a private Israeli image understanding and artificial intelligence company.
Another company worthy of the industry's attention is WuXi AppTec, which has been delisted from the US stock market. In recent years, through mergers and acquisitions and investment, it has gradually formed the layout of the whole industry chain such as genetic testing, cellular immunotherapy, and drug CRO. The clear layout may generate greater value in the future.
In short, whether it is the establishment of wholly-owned subsidiaries or equity participation or mergers and acquisitions, it will be the main way for listed companies to develop in the field of precision medicine, and how much revenue these new fields can contribute to listed companies, the harvest period may depend on the further reduction of sequencing costs. , the technical sensitivity will be further developed and then judged.
