Financing M&A Forum- Successful Experience on Investment and M&A for Biomedical Enterprises

2020-11-16 11:29

On the afternoon of September 29, Financing M&A Forum (hereinafter referred to as "Forum") was successfully held on the 2020 China BioMed Innovation and Investment Conference (2020 CBIIC). The Forum consisted of four keynote speeches and one panel discussion. The speakers discussed on biotechnology, innovative drug investment and M & A transactions from a global perspective, also the biomedical investment under the new-issued medical policy and SSE STAR.

Ms. Tina Li, Assurance Senior Manager of Ernst & Young Hua Ming LLP (special general partnership), was the moderator of the Forum.

 

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Moderator: Ms. Tina Li, Assurance Senior Manager of Ernst & Young Hua Ming LLP (Special general partnership)

 

The first speech “Investment in Biomedicine from a Global Perspective” was delivered by Dr. Li Mingxi, Partner of GT Healthcare Capital & Co-founder of GT Apeiron Therapeutics. In 2020, the outbreak of COVID-19 posted a positive impact on the biomedical industry. Dr. Li Mingxi expressed that, in both the NASDAQ and the Hong Kong stock market, the index of the entire biomedical industry was higher than the market movements, particularly, the IPO market in Hong Kong stocks had seen an extreme active performance in this year. The number of projects issued and the amount of financing in the first half of the year have exceeded that of the whole year of 2019. Meanwhile, many foreign biomedical enterprises were attracted to list in Hong Kong. In addition, Dr. Li also illustrated examples for the China’s VC (Venture Capital) investment into the US and US’s VC investment into China. After 2017, the overall investment amount decreased, but the China’s VC investment remain relatively active. By license in and independent innovation, Chinese Biopharmaceutical enterprises have enriched their product pipeline. However, the market is relatively crowded given that most innovative enterprises focus on certain popular targets. How to make different product become a major task for all biotech companies in China.

 

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Li Mingxi, Partner of GT Healthcare Capital & Co-founder of GT Apeiron Therapeutics

 

The second keynote speech “How to Break out the Challenging Situation for the Biotech or Conventional Pharmaceutical Companies in China” was given by Ms. Wang Yueyue, Partner of T-Capital. Ms. Wang pointed out that, fundraising challenges posted a downturn period on all investment institutions, which made it even more difficult for start-ups to obtain investment. Similar to the pharmaceutical industry, the total amount and number of investments into pharmaceutical sectors also declined. According to Ms. Wang, capital plays a decisive factor for the development of biotechnology companies, for the sufficient amount and the timing of the capital determines the fate of an enterprise. The transactions in the domestic pharmaceutical field is characterized as small number of extreme high block trade, namely Matthew Effect. Small molecule drugs are taking the largest number and amount of transactions. At present, incubation, joint development, licensing, joint venture, equity investment, M & A and other transactions play key roles for biotech and traditional pharmaceutical enterprises. Besides, Ms. Wang highlighted that, “survival of the fittest” was a forever golden rule for capital market. In the future, biotech will rely on its core technology, while the various BD cooperation will be a major helper for traditional pharmaceutical enterprises.

 

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Keynote Speaker: Ms. Wang Yueyue, Partner of T-Capital

 

Mr. Chen Feng, Partner of Youchoose Capital, presented “Several Insights on Biotech Investment” with data from Cambridge Associates. During the period of 2007-2016, looking at the y-axis (cumulative distribution of transactions), the ROI (Return on Investment) in the biomedical industry was always higher than that in IT / software industry; during 2000-2016, the biomedical ROI ranked first and second for 7 and 2 times respectively. Mr. Chen also shared his and his team’s experience on biomedicine investment and innovative drug projects selecting. The commercial value and risks of patent medicines should be taken into account in investment and initiation of innovative drug project. For the risk of patent medicine, Mr. Chen proposed a concept of barrier value, which referred to not only the pharmaceutical properties of molecules, but also has more important factors, such as the complexity of the disease itself, clinical endpoint, preclinical improvement, etc. The commercial value should be reflected in the clinical value and whether the drug can meet the clinical needs. Moreover, the differentiation lies in preclinical and clinical stages. Specifically, how much of the pre-clinical differentiation can be transformed into clinical differentiation, and whether the objective clinical differentiation solves the clinical unmet needs. The key point of setting up a product project is the coordination of the three aspects: unmet clinical needs, barrier and enterprise ability.

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Keynote Speaker: Mr. Chen Feng, Partner of Youchoose Capital

 

The last speech “Servier, Your Partner of Choice” was shared by Ms. Cynthia Wang, BD & Licensing Director of BioInnovation Asia, Les Laboratories Servier. According to Ms. Wang, Servier currently focuses on five treatment areas highly needed clinically, including tumor, cardiovascular, metabolic, immune and neuropsychiatric diseases. By July 2020, the company has 30 clinical development projects (including 16 new molecular entities) and 36 novel drug research projects, and focuses on cancer drug, as the key step for its strategic transformation, and also focuses on drugs for cardiovascular, metabolic and central nervous diseases. Its pipeline covers phase I to phase III studies, as well as pharmacokinetic studies, involving cancer, cardiovascular, diabetes, immune inflammation and neurodegenerative diseases. Meanwhile, Servier accelerates global innovation by focusing on high value-added projects that benefits patients, continuously building science and translational medicine, and making full use of the digital technology.

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Ms. Cynthia Wang, BD & Licensing Director of BioInnovation Asia, Les Laboratories Servier

 

The last panel “The Biotech Investment Under New Pharma Reformation Policy and SSE STAR Market” was chaired by Mr. Tan Wenlong, Partner of Beijing Everest Venture Capital Management. Mr. Ching Zhu, Partner of Creacion Ventures, believed that China's biomedical investment become increasingly active, and the industrial chain developed in a healthy trend. From the perspective of investment, more combination of RMB and US dollar funds brings more for the whole industry development in a flexible and active way. Mr. Albert Huang, Executive Director of Yunfeng Capital, shared some views on the future of the current active investment trend, which mainly reflected in three aspects: expansion, differentiation and value realization. Mr. Albert Huang believed that the hot spots of the market in the next three years would be M & A, integration and reorganization. Domestic enterprises should explore good license in products in Europe and Japan in addition to the United States. License in and independent innovation are both valuable models for pharmaceutical enterprises. Dr. Li Mingxi, Partner of GT Healthcare Capital & Co-founder of Apeiron Therapeutics, expressed that, many leading enterprises in China were conducting both license in and independent R&D jointly, because there were different corporate strategies for capital markets, and there are difference between China’s and the United States’s IPO markets. Investors should control their own risks while taking the opportunities. Mr. Bao Yanghuan, Partner of Bohe Angel Fund, talked about China's financing environment, who argued more financing for small companies and less financing for large companies, namely a pyramid structure, would be able to help the financing environment reach sustainable development. However, it will be more and more difficult for biotechnology to grow into biopharma.

 

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From left to right:

Moderator: Mr. Tan Wenlong, Partner of Beijing Everest Venture Capital Management

Panelists:

Mr. Ching Zhu, Partner of Creacion Ventures

Mr. Albert Huang, Executive Director of Yunfeng Capital

Dr. Li Mingxi, Partner of GT Healthcare Capital & Co-founder of Apeiron Therapeutics

Mr. Bao Yanghuan, Partner of Bohe Angel Fund

 

Financing M&A Forum was successfully concluded on 2020 CBIIC. In recent years, thanks to the healthcare reform and policies, China's pharmaceutical industry has ushered in an unprecedented opportunity for innovation and development, and has stepped into a period of “survival of the fittest”. Pharmaceutical investment and M & A developed rapidly, which further promoted the cooperation and development of China's pharmaceutical innovation.

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Financing M&A Forum

 

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Financing M&A Forum