Text: Hu Xiangyun.
Edited by Hai Ruojing.
We were very optimistic at the beginning of the year, but the results were not as good as we thought;We are not very optimistic about next year, because we don't expect it to be so good next year. At the end of the year, some investors jokingly expressed their outlook for the medical market in 2024 in the first half of an industry sharing.
In 2023, the description of "chill" has been going on in the medical industry for a whole year. What significant changes have the healthcare industry experienced?What impact have these changes had on the trend and logic of investment and financing?
Recently, at the 8th China Health Industry Upgrading Summit and Investment Value Theme Forum 2023, which was guided by the China Association for the Promotion of Industrial Development and hosted by Yiou Health, practitioners from investment institutions, enterprises and third-party service providers brought their own thoughts on these issues.
Probe Capital statistics show that since the new crown epidemic, the number of investment events and amounts in the medical primary market has increased from more than 400 per quarter at the beginning, reached a peak of 743 in the second quarter of 2020, and then continued to decline to about 350 today, and this number is expected to continue to decline next year, falling to the level of about 250.
In terms of investment amount, the investment volume in the first quarter of 2020 at the beginning of the new crown epidemic reached more than 26 billion yuan, and increased to about 81 billion yuan in the fourth quarter of that year, but then began to decline, and until the third quarter of this year, most of them were at the level of more than 20 billion yuan.
In this context, Zhu Pai, CEO of Yifeng Capital, mentioned that this year, the market is returning from high heat to reasonable heat. Five years ago, it was very common for B round to be 1-2 times more than round A**, but this year it is almost impossible to see it. Many new start-ups "may no longer be rushing for IPOs, which is a very healthy logic". "If we choose between IPO and M&A, we prefer more companies to be acquired, and the capital and start-up market in the United States is also such a stage of integration, and IPO is not the mainstream direction. ”
On the other hand, in the case of difficult survival, the easiest way is to sell their own products, which also explains to a certain extent the phenomenon of domestic new drugs gathering in the sea this year, especially in the second half of the year. "This is a surprising phenomenon in the whole industry. For enterprises, it may have been a small fight in the past few years, but now everyone is starting to have real technical products to gain the trust of overseas big pharmaceutical companies, which is a very pleasant surprise;In terms of the demand of investment institutions, we also need to pay attention to what more companies are doing overseas when the domestic market hits the ceiling. ”
Some practitioners of FA institutions believe that it is precisely because of the changes in the capital market in the past year that many entrepreneurs will readjust their business content from the outbreak at the beginning of the year, reduce valuation expectations, and adjust the strategic actions of the entire enterprise to the next 3-5 years, when the market is still in a state of winter under greater challenges, so this stage is suitable for institutions to shoot.
Deng Tingting, a new partner of Probe, mentioned that in the daily research, it can be found that the current financing rhythm and scale of many enterprises are relatively chaotic, "probably because the company did not match the speed and financing cycle of its own money burning before."
So, what should companies that are in the financing stage do at this stage?
The first is the choice of time. In the current market environment, if the company's reserve funds are sufficient for 18-20 months, there is no need to rush to start a new round of financingIf you have a reserve fund between 12 and 18 months, it is best to start updating your due diligence package to "plan ahead".However, if you can't survive even 12 months, it is best to start financing immediately, but you need to have a detailed assessment of the cost and R&D investment in the next two years.
In the selection of institutions, we should try to cooperate with state-owned assets and industrial capital. For example, in the past, the resources in the industry were not strong, but the start-up enterprises that are ready to start commercialization cooperate with industrial capital for equity financing, which is not a process of complementary resources;However, in terms of valuation, you must be cautious of overvaluation, "which may directly lead to half of the 60 investment institutions you contacted in the early stage to quickly turn around."
In addition, "at this stage, it is still necessary to actively embrace reinvestment". Some guests at the scene mentioned that under the circumstance that the new crown epidemic has consumed most of the country's fiscal and tax revenues, both state-owned assets and market-oriented funds are actually decreasing. Especially since the beginning of this year, due to the transfer of attention at the national level to some technologies involving safety and "stuck necks", the investment promotion in many places is actually readjusting and layout, and the frequency of state-owned assets in the medical field has shown a downward trend as a whole. "At this time, we may be able to choose the best of the best in the return investment area, and choose the area that fits the industrial chain and talents. ”
Looking at 2024, I think everyone should still maintain a cautious attitude. The medical track, and indeed the entire macro environment, may not recover as quickly as imagined. Which ** dominates the market, according to the direction of the trend, and at the same time to see whether there is a change in foreign capital, if it comes back, it is a good sign. Some investors said.