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Card neck or be stuck neck? The "domestic substitution" of the biopharmaceutical industry supply chain already needs to race against the clock!

 Last Update: 2022-10-14
 Source: Internet
 Author: User

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The earliest provenance of the term "card neck" is unverifiable, but it has become a hot topic in 2018, after the start of the trade war, "Huawei singled out the United States" incident
.
Although Huawei, which has excellent strategic awareness, has made full preparations as early as more than a decade ago, and sacrificed the Kirin chip to almost make the United States return home, the Trump administration has "put its hands up and down" and still touched Huawei's "neck"
.
This has directly promoted the chip to become China's most important scientific and technological research project in recent years, or even one of them
.

Time has passed, and the regime has been handed over to the Biden administration, but the behavior of "pinching the neck" has not decreased but increased, but the situation has become more complicated
.
A few days ago, Biden signed the "National Biotechnology and Biomanufacturing Plan", referred to as the "Biden Administration Biology Act", which directly refers to the biological industry
.
Pharmaceutical Times has published opinion articles arguing that the bill is useless and cannot affect the existing pattern
of the biomedical industry.
[Related reading: Biden administration wants to crack down on Chinese CXOs? It seems that the typhoon blows, but it can only move slightly.

But behind the bill, the US hope to get rid of the industrial chain of China's dependence on the attitude is real
.
In the global biomedical service chain, China's CXO has played an important role, while the upstream life science supplier is still the only one in the
United States.

In the supply links belonging to the upstream and downstream, the two sides show a state of checks and balances of "pinching each other's necks", and the two benefits are two, and the fight is two injuries
.
Once one party is freed from the shackles and achieves self-sufficiency, there is no longer any scruples, and "independence" becomes a deterrent
in another sense.

The two sides present a state of checks and balances of "pinching each other's necks"

The United States has set its sword on the Chinese CXOs, and whether they succeed or not, we should understand that securing supply chains is on the
line.

Securing the supply chain is on the
line.

Ten years of tree "chain", water mill work

If high-end manufacturing industries such as biopharmaceuticals are likened to simple "making wooden benches", China's role in the industrial chain has gone through several stages
.

In the beginning, others handed over the wood to us, helped us train workers to do assembly work, the profits were thin, the fungibility was strong, and we would starve to death at any time, but we accumulated a large number of technicians, and "Made in China" swept the world
.
Subsequently, innovation has become a trend, on the one hand, we independently developed the "Taishi chair", on the other hand, with the engineer dividend to take over the work of "log processing", in the important link of "stool-making" has become an irreplaceable link
.

At this time, the original manufacturers quarreled with us and wanted to remove our stools, and they could empty our "stool-making industry"
overnight with the right to develop the forest.
And when we spent a lot of energy planting a forest, we found that the axes, saws, and nails in our hands were all from the other side's house
.

Fortunately, years of subcontracting, so that their family stool workers have a fault, no one dares to move
.
Therefore, when the other side announces a "large-scale recruitment", it is also telling us that the countdown to establishing a complete supply chain has been
launched.

In an interview with employees, Guo Ping, Huawei's rotating chairman, once said that the place where Huawei's neck was stuck was not a problem that needed Einstein to solve, but a problem of time, process and cost
.
”

The same is true
for China's biopharmaceutical supply chain.

The entire pharmaceutical industry upstream and downstream involves dozens of links, thousands of products, from the reactor to a small tube, each technological breakthrough may not need to spend too much time and money investment, and the results of the transformation is extremely rapid, but there are too many
projects.

Different from the original innovative drugs, the development of basic research needs to be "hard solution", and after the breakthrough, it will be smooth all the way; The supply chain should be replaced by domestic production, more is the work of water milling, one "item" a year, ten years a "chain"
.

The supply chain should be replaced by domestic production, more is the work of water milling, one "item" a year, ten years a "chain"
.

In fact, there are already many domestic suppliers doing this, and it has been doing it for a long time
.
Founded in 2005, after 17 years of development, DONING Biologics has grown into a major supplier in the field of serum-free media, disposable products and bioreactors in the domestic biomedical industry, providing biomedical customers with a package of solutions for upstream and downstream biotechnology
.

Yesterday, Doning launched the listing declaration of the Hong Kong Stock Exchange, and also announced that they who once stood behind the scenes will come to the front of the stage and become the wrestlers
in the spotlight.

Domestic substitution, the need for "big and complete"

Domestic substitution of supply chain requires technological breakthroughs, but it cannot only be technological breakthroughs, and scale effects are very important
.
Just like no one will run three vegetable farms to make a meal, no manufacturer will want to buy media from A and then run to B to buy filters
.
There are many ways for pharmaceutical companies to survive, there are Novo Nordisk-style specialized diabetes, there are also Pfizer-style "everything", but the field of consumables is not the same, no manufacturer can only rely on "selling membranes for a living", unless it is selling masks
.

Real suppliers need to be "supermarkets", so that customers can buy all the ingredients and spices in one trip, which needs to be "big and complete"
.

This requires deep technical accumulation in many fields, but the cost is too high, so mergers and acquisitions become the best strategy
.
At present, the largest and top suppliers in the field of life sciences have all started with mergers and acquisitions
.

Thermo Fisher has evolved from "old thermopower" to become the world's largest provider of life sciences services; Danaher has been established for more than 30 years, with more than 400 mergers and acquisitions, ranking second in the world, and can be called "consumables snake"
.

"M&A" is also an important means
for Doning Bio to move towards a domestic supplier giant.
The acquisition of Guangzhou Qizhi Bio in 2019 and the acquisition of Lianghei Technology in 2020 have become milestones for Doning Biologics
.

"M&A" is also an important means
for Doning Bio to move towards a domestic supplier giant.

Image source: Prospectus

Founded in 2008, Qi Zhi Bio is one of the few comprehensive suppliers of bioreactors in China that integrates R&D, production, sales and process technology services, and has a large number of independent intellectual property rights, which can compete with imported similar products
.
Lianghei Technology has focused on serving the biopharmaceutical industry for more than 10 years, providing professional and personalized technical solutions for fluid management consumables and equipment, and providing GMP-level pharmaceutical hoses, pipeline assembly, and supporting disposable joints, sensors and other products
for research and development, small test, pilot and scale-up production.

Two mergers and acquisitions allowed Donin to integrate
key steps upstream of the bioprocess on the basis of serum-free cell media.
Taking disposable bioprocess bags as an example, since the single-use technology entered the domestic biopharmaceutical market, the raw material film of the disposable bioprocess bag mainly relies on imports, the price is high, and it is vulnerable to foreign technology blockade
.

Two mergers and acquisitions allowed Donin to integrate
key steps upstream of the bioprocess on the basis of serum-free cell media.

The DuoFilm 001 membrane material developed by the R&D team of Lianghei Technology, as a 7-layer polymer biofilm, has better performance than the 5-layer structural film on the market, showing the characteristics
of high strength, good flexibility, easy welding and so on.

The successful research and development of DuoFilm 001 membrane has made the big hand on the "neck" of China's biopharmaceutical supply chain weaken by one point
.

After "Big and Complete"

If the consumables and instruments required for production are compared to pieces of building blocks, consumables such as biofilms, sealing rings, and culture media belong to the lowest layer of "building blocks", and the completion of technological breakthroughs can be plugged and played
.

There are also some more complex devices that belong to the "building blocks" of the higher layer, which are the products of integrated disciplines and need to complete the accumulation of underlying technology before they can be overcome
.
This is also the merger and acquisition can bring excess benefits to the company, quickly make up for the need for the bottom "building blocks", or even the second layer of "building blocks", these technologies if only rely on independent research and development, may take several years to complete
.

If these technologies are developed in-house, they may take years to complete
.

The most typical high-rise "building block" is a disposable bioreactor, how high is it? Bioreactor hardware controllers and some filters are export control products in the United States, and disposable bioreactors occupy an important position in today's macromolecular biopharmaceutical production, which makes its supply problem like the "Damocles sword" hanging over the head of Chinese macromolecule CXO, which is a great
deterrent.

Once the situation changes, the macromolecule CXO may be cut off at any time, and at the beginning of this year, it caused a small-scale industry turmoil, although it can be solved by importing from the European Union and Japan, but such a "high building block" still makes the CXO who chokes its neck feel suffocated, and it is urgent to solve the "reactor dilemma"
.

Image source: Donin Biologics official website

The successful development of the disposable reactor is the product
of the accumulation of control logic of Qizhi bioreactor for many years, the combination of Lianghei's independent development of disposable process vessel and the long-term cell culture process of Donin.

Such "high building blocks" are the most important projects to overcome to ensure the security of
the supply chain.

Moving to the cutting edge

Supply chain crises cannot be completely cured because life sciences are constantly evolving
.

The advent of new technologies sometimes facilitates the emergence of a new supply chain, and before the advent of the digital age, memory cards were niche commodities, and before the rise of biopharmaceuticals, there was no large-scale demand for
bioreactors.

The century-old store in the pharmaceutical industry supply chain may be able to count on one hand, but if you want to count the century-old pharmaceutical companies, plus the toes may not be enough
.

Therefore, keeping up with the trend of the times, moving towards the frontier field, timely layout of the supply chain of new technologies, and maintaining crisis awareness are the long-term ways to ensure the security of
the supply chain.

Our nearest supply chain crisis event at the forefront is the mRNA technology
that has brought fire to the COVID-19 pandemic.
Gloves, masks, vials and other products are not mentioned, domestic mRNA vaccine companies in the procurement of equipment, has been due to the U.
S.
Department of Commerce card main key components do not release, resulting in a large number of purchased equipment vacant
.
In the first year of the outbreak, plasmid DNA shortages were present worldwide, and lipid nanoparticles (LNPs) encapsulating mRNAs are now one of
the hottest research projects.

LNP is now one of the most mainstream delivery technologies for mRNA, Moderna and BioNTech vaccines are wrapped in LNP, there are now a number of enterprises in China to carry out mRNA-related drugs and vaccine research and development, around the key technologies and raw materials of mRNA to establish a stable domestic supply chain, which is crucial
to China's new drug research and development industry.

Atos has been focusing on the development and process development of nanoscale homogenization, emulsification and crushing equipment for many years
.
In the past 20 years, it has provided homogeneous emulsification equipment for more than 2,000 customers, and is one of the few high-quality suppliers in China
.

On July 26, 2021, DONING Biologics announced the wholly-owned acquisition of Antos, based on DORNIN's understanding of the process in the field of mRNA, combined with the accumulation of ATS in the complex preparation industry, successfully introduced LNP to the market, continued to expand the "vegetable market", and moved towards
"large supermarket".

For pharmaceutical companies, chasing hot spots is gambling; For the supply chain, chasing hot spots is a guarantee, and each additional chase will provide an extra layer of insurance
for the company itself, innovative pharmaceutical companies and even China's biopharmaceutical industry.

For the supply chain, chasing hot spots is a guarantee

epilogue

Establishing a complete supply chain is not a day's work, China's biopharmaceutical industry is full of talents, and many "strategists" have been making preparations
.

As early as November 2017, WuXi Biologics, together with Donin Biologics and Lisui Technology, established the "Antibody Production Raw Materials and Equipment Localization Alliance" to seek domestic alternatives
in the supply chain.
The "14th Five-Year Plan for the Development of the Pharmaceutical Industry" released this year mentions the supply chain 16 times in its entirety, focusing on "achieving a stable and controllable
supply chain.
" ”

International events such as trade wars, unverified lists, and biopharmaceutical bills will greatly accelerate the process of localization and substitution, and there are many high-quality domestic suppliers with no reputation before can take this opportunity to seize the market
.
I believe that downstream CXOs and pharmaceutical companies will find a lot of "treasures" in this, and the use of convenient and cheap is estimated to be no longer changed
later.

Domestic suppliers have obtained a large number of orders, and after earning profits, they can continue to "stack building blocks" upwards, form a virtuous cycle, develop more cheap domestic high-quality goods, feed back downstream customers, reduce the production costs of pharmaceutical companies, make CXO companies more internationally competitive, and then form a big virtuous circle
.

The best suppliers will even go international and compete with those giants, and Donning completed the merger and acquisition of SALUS in March this year to expand the layout of the European and American markets and accelerate the promotion of
overseas markets.

In the process of seeking domestic substitution, the industry will have pains and turmoil, but the ending will be beautiful, and the core competitiveness of the industry will never be the glory of the past, but a full preparation
for the future.

The core competitiveness of the industry has never been the glory of the past, but the full preparation
for the future.

Resources:

1, "addicted" mergers and acquisitions can not extricate themselves, the global life science giant cultivation technique!

2.
WuXi incident warns supply chain safety

3.
Interview with Wang Meng, | of Donin Biologics Committed to promoting the localization of products in the biopharmaceutical industry

4.
The WuXi incident is the beginning of the "awakening era" of the biomedical supply chain

5.
The official website and official micro of each company

6.
Other public information

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