2013, the global pharmaceutical investment harvest

2014-01-06 source: pharmaceutical economic news 2013 is a harvest year for the capital market of biomedical industry, with remarkable performance from IPO, secondary market, private placement, M & A, cooperation to new drug approval and marketing According to Steven bole, CEO of bole, "by any standard, 2013 is a landmark year, with stock prices generally rising, a record IPO market, and important new products approved for listing." After the gradual recovery of the global economy, biomedicine has become the industry with the most growth and performance highlights The stock price has soared several times of its annual income, which was only seen in the field of network and it in the past, but now it is not uncommon in the field of biomedicine Because it can bring huge investment returns to investors, biotechnology companies in different stages can arouse the interest of investment institutions Bole expects 2014 to be another strong year for the biomedical industry In view of the rising cost of health care and the pressure of the increasing cost of medical and health investment around the world, the focus of drug and diagnostic reagent developers is changing - to control costs, not just focus on innovative drugs and diagnostic functions, but also need to make efforts to improve the quality of life and nursing quality [soaring stock price] in 2013, the biotechnology stock index performed very well As of the end of November, Bole biotechnology selection index rose 61.7% year on year By comparison, the Dow Jones industrial average rose just 22.8%, while the S & P 500 rose 26.6% Even the high-tech Nasdaq composite index gained only 34.5% In terms of industry segments, the selected bio stock index of Bole increased by 60.1%, the large bio tech stock index of Bole increased by 62.1%, the medium bio tech enterprise stock index of Bole increased by 68.6%, the small bio tech stock index of Bole increased by 30.9%, the diagnostic enterprise stock index of Bole increased by 11.5%, and the personalized medical enterprise stock index of Bole increased by 24.4% Most of the top gainers are therapeutic drug development companies, most of which have not yet listed products, nor sales or profits to speak of Stock price hikers also include mature biotech companies, with market value soaring: Biogen IC's market value has exceeded $66 billion, celgene's market value has exceeded $69 billion, and Gilead's market value has exceeded $111 billion Generally speaking, the performance of traditional pharmaceutical companies is significantly inferior to that of biotechnology companies, the main reason is that the growth momentum is not enough, and the pace of new product listing can not catch up with the performance decline speed brought by the patent cliff On the contrary, the products of large and medium-sized biotechnology companies are not threatened by patent expiration New products are relatively frequently listed, and some enterprises start to turn losses into profits through cooperation with large pharmaceutical companies [IPO blowout] the biggest bright spot in 2013 may be the IPO blowout market There are 65 life science companies in the world publicly listed, raising a total of $7.5 billion Compared with the total amount of US $1.2 billion raised by 38 companies in 2012, the number of new listed companies almost doubled, and the raised funds increased five times By the end of November, newly listed companies had generated an average return of 34.6% Therapeutic drug R & D companies performed the best, with an average increase of 39.7% in the first three quarters In terms of IPO price of newly listed companies, most of them are not only issued at a high price, but also oversubscribed By the fourth quarter, the pace of IPO has slowed down It is expected that the pace of new share issuance in life science will slow down in 2014, with the number of new shares issued in the whole year around 30, and the number of funds will also drop compared with 2013 Bole forecasts that 2014 valuation will focus more on the company's existing value, but more on its prospects [financing 100 billion US dollars] in 2013, Bole predicted that the global life science industry would raise 100 billion US dollars By the end of November, the global life science industry had raised a total of 90.9 billion US dollars Among them, debt financing is about US $52.6 billion, accounting for a decrease from 65.7% in 2012 to 52.6% in 2013, which is due to the strong IPO market and strong stock price Private financing did not reach the growth forecast of 20% In the first 11 months of 2013, private financing raised US $11.5 billion, only 2.1% higher than US $11.2 billion in the same period of 2012 Part of the reason is that many companies have moved to the IPO market, rather than to maintain the operation and growth of enterprises through the raising of venture capital in the later stage In 2013, the amount of IPO Financing increased by 241.8% It is estimated that such a good momentum will be difficult to reproduce in 2014 It is expected that the global life science industry financing will grow moderately in 2014, with the amount of financing about US $111 billion, most of which comes from outside the United States [venture capital returns to vitality] in 2013, the biotechnology venture capital became active By the end of November, the global biotechnology venture capital amounted to US $11.5 billion, an increase of 2.1% year on year, including US $8.85 billion, an increase of 4.5% year on year Driven by the IPO boom, venture capital has a new market Many venture investors have made money in this IPO market, and are expanding financing and additional investment in new projects In the past, due to the consideration of long investment cycle and high risk, many venture capitalists were reluctant to participate in early projects and companies' investment, which made the total plate of venture funds of early start-ups decline However, in recent years, several venture funds focusing on early projects of biotechnology have successively raised large amounts of funds, which ushered in a big IPO harvest in 2013 This is the successful return of venture capital fund in the past few years However, early projects are still short of funds, and investment in early biotechnology companies in the United States has shrunk in recent years In the first three quarters of 2013, there were only 102 start-ups that raised less than $5 million for the first time, the lowest number since 1996 If you deduct a $150 million large-scale project, only $467 million in early-stage VC funds will be invested As a supplement of insufficient funds, start-ups can only rely on non-profit organizations, charitable funds and venture capital to support early research and development and operation [enterprise venture capital increase investment] in the past few years, there is a gap of about 500 million US dollars in the early venture capital of biotechnology, which is mainly provided by the enterprise venture capital Department of large pharmaceutical companies It is not easy to count the amount of this part of capital, because most of them are internal plans of the enterprise, which are generally not published separately The reason why big pharmaceutical companies are more and more interested in this is that first, pharmaceutical companies need more innovative products and projects, and second, some of their foreign investment and merger funds must be invested in early projects In addition, large pharmaceutical companies continue to restructure and close many projects, and the support of early projects may attract foreign venture capital funds In recent years, the more popular practice of large pharmaceutical companies is to cut off many R & D projects, plus the separation of funds and personnel to establish new companies In 2013, Merck and Glaxo respectively increased their own venture capital investment, and also actively participated in LP participation of professional venture capital This approach is different from the past To participate in innovation and R & D in the form of investment is very practical, efficient and low risk in terms of return on investment and risk control However, after all, pharmaceutical companies are not investment companies, and innovation and R & D are still the core driving force for the growth of enterprises Therefore, this part of investment needs to have better strategies and models, rather than just an investment management team Big pharmaceutical companies should be different from professional investment companies, do what they are good at R & D and industrialization, leaving their main business will lose their brand and industry status [M & a trading out of the trough] in this year, M & a trading was active, with the trading volume rising to US $115.7 billion in the first 11 months of 2013, an increase of 15.8% over the previous year, which has clearly come out of the decline of M & a trading in the previous year Thermo Fisher Scientific spent $13.6 billion to acquire life technologies, and Amgen spent $10.4 billion to acquire Onyx pharmaceutical, which is a large-scale merger and acquisition deal in 2013 AstraZeneca is one of the most active buyers in 2013, because it has to have big moves to enrich the increasingly thin pipeline of new drugs It is estimated that in 2014, large biotech companies with strong financial strength will also play a more active role in the M & A of small and medium-sized enterprises like large pharmaceutical companies There are still many factors to keep M & a active in the field of biotechnology in 2014 In addition to R & D considerations, emerging markets are also factors that multinational pharmaceutical companies often consider in M & A The M & A transactions of pharmaceutical companies in China and other emerging markets will continue to promote resource integration and scale effect in the pharmaceutical field [close contact with partners] in 2013, pharmaceutical companies continued to expand open R & D and actively seek external R & D cooperation More and more partners in the early stage of R & D successively signed contracts with biotechnology companies and academic institutions According to the statistics of the data that has been disclosed to the outside world, in 2013, 35.4 billion US dollars of cooperative transactions were signed, of which 14.2 billion US dollars were involved in new drug discovery or preclinical research In the future, there will be closer trade relations between partners, because large pharmaceutical companies and biotechnology giants are eager to find new technology platforms that can produce innovative drugs [adjust emerging market strategy] although emerging market is still an important market for pharmaceutical enterprises to explore, events in 2013 make people feel that the transactions and M & A in emerging market may be too fast and optimistic, which needs to be adjusted Pharmaceutical giants are facing accusations of commercial corruption in China, runaway patent protection in India, increasing drug price control by governments of other emerging countries and regions, and multinational pharmaceutical companies are slowing down the expansion of emerging markets However, with the growing middle class, emerging markets still have more room for sales and performance growth than mature markets in Europe and the United States It is expected that in 2014, after rethinking and adjusting the strategies of emerging countries and markets, multinational pharmaceutical companies will increase their M & A activities in emerging markets and carry out more active business activities For more information, please refer to the medical economics Daily