How many more IPOs can run in the pharmaceutical industry?

Mondo Finance Updated on 2024-02-28

Although the number of IPOs has declined significantly, some cities have been active.

Text |Zhao Tianyu.

EdWang Xiao.

From February 18 to 19, 2024, at the beginning of the Spring Festival, the CSRC held more than ten symposiums in two days.

At the symposium, the participants suggested that the IPO (initial public offering) should be strictly controlled, the whole process of supervision of listed companies should be strengthened, and unqualified listed companies should be resolutely cleared, so as to fundamentally improve the quality of listed companies and increase investment returns.

TightenThe IPO rhythm has been the main thread of the past year.

In 2023, A-share pharmaceuticals will be newly listedHealthy businessA total of 22, plus 13 Hong Kong stocks and U.S. stocksChina Concept Stocks3, a total of 38 successful IPOs throughout the year.

Compared with previous years, this is an inconspicuous number, and the number of successful IPOs has dropped significantly compared to previous years. However, the financial and health authorities have observed that some cities are still quite active.

In 2024, what kind of companies can successfully raise funds through the IPO mark? Which segments and sectors may still have opportunities? This article tries to find some consensus by sorting out the listing path of enterprises.

According to the Wind platform, A-share pharmaceuticals will be newly listed in 2023Healthy businessA total of 22, compared to 49 in the previous year. This is in line with industry-wide performance over the past year.

From the perspective of IPO acceptance, in July, August and October 2023, only six new A-share companies will be accepted by the Beijing Stock Exchange, and zero will be accepted by the Shanghai and Shenzhen Stock Exchanges; On the listing side, IPO listings have declined significantly since September. According to a report released by EY, global IPO activity in 2023 is also continuing to slow, with the number of IPOs and fundraising falling by 12% and 35%, respectively, compared to the same period in 2022.

However, in terms of the specific situation in various places, Finance and Health found that some areas still resisted the pressure and performed well.

In terms of geographical distribution, Shanghai isNewly listed pharmaceuticals in 2023Healthy businessThe most places, there are eight; Zhejiang Province and Beijing City each have five.

Four of the five companies in Zhejiang Province are from Hangzhou.

As the capital city of Zhejiang Province, Hangzhou has given a lot of support to the development of the biomedical industry, and has made many plans for the future development of the biomedical industry in terms of finance, finance and talents.

A medical and health practitioner in Hangzhou told Caijing Health that he can clearly feel that the local acceptance of new models and new ideas of enterprises is generally high, and the inclusiveness is also great, and there is an overall atmosphere of willingness to accept new technologies. While other regions were still communicating and waiting, the local area had already run first.

Hangzhou's overall strength in the pharmaceutical and health industry is very strong.

In the field of medicine, Betta Pharmaceutical, Ascletis, Huadong Pharmaceutical, Sanofi and other enterprises have settled in HangzhouIn the field of medical devices, there are Qiming Medical, Nuohui Health, etc.;In the field of pharmaceutical outsourcing services, Tigermed's headquarters is located in Binjiang District, HangzhouIn the field of digital healthcare, WeDoctor is headquartered in Xiaoshan District, and WeDoctor is located in Yuhang District.

From the perspective of industrial layout, Hangzhou's biomedical industry has a pattern of "one core, four parks and multiple points": the core area is Hangzhou Medical Port in Qiantang District, Binjiang, Xiaoshan, Yuhang, and Linping constitute "four parks", and Jiande and other places are "multi-point".

Each district has its own focus. Qiantang District is the "core", laying out the whole biomedical industry chain;The high-tech zone (Binjiang) is engaged in smart health, high-end medical devices, innovative drugs and other characteristic fields;Xiaoshan District focuses on the development of innovative drugs, modern Chinese medicine, high-end CRO CDMO (R&D and production outsourcing services), digital medicine, etcYuhang District develops innovative drugs, Internet + health services, etc.;Linping District focuses on the development of biotechnology drugs, small molecule innovative drugs, high-end medical devices, etc.

"The density of biomedical parks in Hangzhou is very high. In Hangzhou, the entrepreneurial atmosphere in the field of biomedicine and health is relatively strong, and many enterprises also have local characteristics to innovate, and try to develop new businesses on the basis of the Internet and digital economy. The above-mentioned pharmaceutical practitioner said.

On August 29, 2023, the Qianwan Bioport, a life science industrial park in Xiaoshan District, was officially opened, and three years ago, the China (Hangzhou) Digital Health Town in Yuhang District was opened.

Hangzhou will hold some investment and financing conferences related to the field of medicine and health every year, which are generally led by the management committee of the first level or each park to negotiate investment and financing. Among them, there are many start-ups and new projects in biopharmaceuticals, medical devices, pension and other fields. For example, the intelligent guide dogs used in the torch relay of the 4th Asian Para Games in Hangzhou are from local enterprises.

According to the Hangzhou Municipal Bureau of Statistics,From January to July 2023, Hangzhou's investment in pharmaceutical manufacturing increased by 24% year-on-year6%。

The development of the local pharmaceutical and health industry also relies on talents. Zhejiang University, Westlake University, plus the First Affiliated Hospital, the Second Hospital, and Sir Run Run Shaw Hospital of Zhejiang University School of Medicine, etc., have relatively complete local industry-university-research capabilities. There are also foreign "monks", such as in October 2018, the Hangzhou Innovation Research Institute of Beijing University of Aeronautics and Astronautics was launched in Hangzhou High-tech Zone (Binjiang).

The first listed company in Hangzhou was a pharmaceutical company. In 1993, Tianmu Pharmaceutical was listed on the Shanghai Stock Exchange and was also the first listed company in China to prepare traditional Chinese medicines. As of December 31, 2023, Hangzhou has a total of 302 domestic and foreign listed companies, making it the fourth city to achieve 300 listings after Beijing, Shanghai and Shenzhen.

Shanghai and Beijing are traditional advantageous areas. According to the Qingke Research Centerdata,In 2023, a total of 399 Chinese enterprises will be newly listed at home and abroad, including 44 in Shanghai and 34 in Beijing, ranking among the top five in the country.

Among the eight newly listed pharmaceutical and health companies in Shanghai in 2023, four are biological product companies, namely Laikai Pharmaceutical, Kedi, Shuodi Biotech, and Yiming Angke.

Finance & Health has found that paying close attention to and tracking national needs also increases the likelihood of corporate success.

An operator of Zhangjiang Hi-Tech Park in Shanghai told Caijing Health that he is now focusing on medical materials. At the end of 2022, the Ministry of Industry and Information Technology and the State Food and Drug Administration issued a notice to unveil the task of biomedical material innovation.

This time, the list of talents, including polymer materials, metal materials, inorganic non-metallic materials, solicited and selected a number of iconic biomedical materials, whose performance meets the requirements of clinical application, forms a stable and reliable large-scale production capacity, and accelerates the application in the field of related downstream medical device products. And, through the first batch of new materialsapplicationsinsurance compensation and other policies, and increase support for application and promotion.

In September 2023, the first batch of medical materials and teams will be announced, with the participation of enterprises, universities, hospitals, and research institutes. Among them, the shortlisted units of the medical polymer material poly4-methyl-1-pentene include an innovative company headquartered in Zhangjiang Modern Medical Device Park, Shanghai.

In 2023, the companies with the most IPOs in the pharmaceutical and health industry will come from the biological products industry.

Shared13 bio-tech companies have successfully IPOed, covering A-shares, Hong Kong stocks and U.S. stocks.

Zhixiang Jintai is the highest fundraising in the field of biological products, and as an unprofitable company in the IPO of the Science and Technology Innovation Board, it raised 347.3 billion yuan. The company's product pipeline is a monoclonal antibody drug and a bispecific antibody drug, and a drug for moderate to severe plaque psoriasis has submitted a new drug application.

After the IPO, Zhixiang Jintai's losses further expanded than before the listing. The company's preliminary estimate is that the scale of the loss in 2023 will be 7$2.7 billion to $87.1 billion yuan. At the same time, R&D expenses have increased, and the company said that a number of products have entered the clinical research and clinical trial stage, and it needs to continue to maintain a high R&D investment.

In Hong Kong stocks and U.S. stocks, two bioproduct companies have successfully IPOs. Structure Therapeutics was the highest in the initial offering at 124.8 billion yuan. The company has its own drug discovery and development platform, which translates biologics and peptide drugs into oral small molecule drugs for a variety of diseases such as cardiovascular, pulmonary, and metabolic. However, the R&D products of Structure Therapeutics are still in their early stages.

In the pharmaceutical industry,In 2023, a total of eight companies will have successful IPOs, of which five are API companies and three are formulation companies. All of these eight companies have landed on A-shares.

API is a pharmaceutical active ingredient that directly plays a pharmacological role on the human body, and is finally made into a variety of dosage forms such as tablets, capsules, and injections through the preparation and production of various excipients.

Five API companies were intensively listed in less than two months. Among them, the highest initial financing amount is Hongyuan Pharmaceutical, Da23.6.3 billion yuan.

According to the prospectus, Hongyuan Pharmaceutical Co., Ltd. has been operating since 2002 as early as 2002 and is currently engaged in the research and development, production and sales of organic chemical raw materials, pharmaceutical intermediates, APIs and pharmaceutical preparations. Hongyuan Pharmaceutical is also one of the world's leading suppliers of nitroimidazole antibacterial APIs, antiherpes virus APIs, and penicillin antibacterial drug intermediates.

Quite a few APIsEnterprises haveExport capacity. According to the China Chamber of Commerce for Import and Export of Medicines and Health Products, China's API production capacity is dominated by bulk APIs, taking into account some characteristic APIs, and is in the patented API marketfield aspectis also evolving, not only fullIt meets the needs of the domestic pharmaceutical industry, and exports are close to the world200 countries and regions, occupying an important position in the global pharmaceutical industry chain.

Another API company, Keyuan Pharmaceutical, will successfully IPO on the GEM in 2023, raising 85.5 billion yuan. This is also an old pharmaceutical company, established for 20 years, mainly engaged in APIs and preparation products. The products cover the fields of hypoglycemia, anesthesia, cardiovascular and psychiatric diseases, and concurrently operate some intermediates, the latter of which are mainly sold to the international market.

Judging from the performance of the third quarter report of 2023, most of the five newly listed API companies have announced a decline in profitability, and only one company in New Ganzhou can achieve an increase in revenue and net profit compared with the same period last year. At present, Hongyuan Pharmaceutical has disclosed preliminary financial calculation data for the whole year of 2023, showing that the net profit has declined as a whole compared with the previous year.

These enterprises with the advantage of production and manufacturing, through the accumulation of cooperation over the past years, are very familiar with production, research and development, and environmental protection. According to industry analysis, the future opportunity lies in expanding new disease fields, developing chemical API products with high technical barriers and high added value, and also expanding to the direction of CDMO, that is, providing R&D and production outsourcing services.

The capital cold wave in 2023 also makes some companies hope to take the export route, open up high-end markets such as the United States and the European Union, expand market share, and gain a glimmer of vitality.

A total of six medical device companies have been successfulIPOs, five of which are A-shares and one is a U.S. stock company. The highest amount of financing was AGS, which was listed on the Science and Technology Innovation Board and raised 18200 million yuan.

AGS mainly makes endoscopic minimally invasive diagnosis and treatment instruments, which are used in the clinical diagnosis and treatment of digestive tract diseases. The company's products are used in more than 1,000 hospitals and sold to more than 40 countries and regions such as the United States, Germany, South Korea, Australia, and Japan.

In 2023, the highest amount of financing for newly listed companies in the pharmaceutical and health field will be under the leading CRO (pharmaceutical outsourcing) "WuXi Systems".WuXi XDC, raised 374.5 billion yuan, landed in Hong Kong stocks. This is the "WuXi system".Following WuXi MedicineImmanuel Kant,WuXi BiologicsJW Therapeuticsafter the fourth listed company.

WuXi XDC continues to play the role of a "water seller" on the road to new drug discovery, development, and manufacturing outsourcing services in the global ADC (antibody drug conjugate) and broader bioconjugate drug conjugate (CRDMO).

ADC is mainly used for tumors** and is a hot track at the moment.

According to Tiger SniffStatistics, last yearThe number and value of ADC drug-related transactions hit a new high - 22 transactions with a total size of more than US$20 billion, accounting for more than 60% of the total transaction value of all domestic new drug foreign licenses in the year.

The performance of the water seller has risen as a result. On February 1, 2024, WuXi XDC disclosed a positive profit forecast, and the financial data after the preliminary assessment showed that the sales revenue increased by more than 100% and the net profit increased by more than 80% in 2023. This growth is due to the continued dynamic development and competitive advantage of the antibody drug conjugate industry.

Following WuXi XDC, Hong Kong's capital market will continue to be valued by companies in 2024. Just two months into the year, at least seven biopharmaceutical companies have already submitted their statements on the Hong Kong Stock Exchange.

Among them, there is no shortA-share companies listed on the Hong Kong stock market. For example, Huahao Zhongtian, a synthetic biology technology-driven biopharmaceutical company that mainly develops innovative oncology drugs, and Taimei Medical Technology, which is engaged in digital marketing of life sciences, have both sought IPOs on the Science and Technology Innovation Board.

After two rounds of inquiry, Huahao Zhongtian withdrew its listing materials in May 2023, while Taimei Medical was rejected in March 2023 during the review of the listing committee. On January 29, 2024, the two companies submitted their submissions to the Hong Kong Stock Exchange on the same day to seek IPO opportunities.

On February 18, the first day of work after the Spring Festival, various localities have released new plans for this year. As one of the main carriers of the biomedical industry in the central and western regions, Wenjiang District of Chengdu said that it would do better and better in the pharmaceutical and health industry this year, and its operating income increased by more than 20%. As early as 2019, Chengdu clearly stated that by 2025, the operating income of the biomedical industry will reach 1 trillion yuan.

The China Securities Regulatory Commission (CSRC) aims to appropriately limit the financing interval and financing scale, and "highlight the support for the good and limit the inferior".IPO channel narrowing order,It is difficult for many investors to be optimistic about 2024. But just like the skyPeak CapitalTang Hao, Managing Partner, said, "The proportion of China's urban population and the proportion of people over 55 years old determine that the medical field must be a long-term demand track. ”

The medical and health industry in 2024 is still in the adjustment period from high heat to reasonable heat, but it is about to pass through the cold winter, and spring is ahead.

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