Conba and Consun Pharmaceuticals, two well-known pharmaceutical companies, have reached cooperation

01 Official announcement of all-round cooperation

01 Official announcement of all-round cooperation

Recently, Conba issued an announcement announcing the signing of a strategic cooperation framework agreement with Consun Pharmaceutical.
According to the announcement, the two parties will cooperate on equity, marketing, research and development, assets and business
.

In terms of equity cooperation, according to the agreement, Conba intends to invest in the equity of Consun Pharmaceutical and hold it for a long time, so as to promote Consun Pharmaceutical to further improve its governance level and efficiency, and create favorable conditions for the two parties to carry out strategic cooperation in business fields
.

In this regard, Kangchen Pharmaceutical is willing to provide appropriate and necessary assistance under the premise of complying with relevant laws, regulations and rules

In terms of business cooperation, considering that Kangenbei has strong OTC marketing advantages, and has many large varieties of traditional Chinese medicines such as Qianliekang, and Kangchen Pharmaceutical has a strong position in the field of urology, especially in the field of traditional Chinese medicine in nephrology.
Advantages, the two sides complement each other in three aspects: marketing cooperation, R&D cooperation and asset integration, and carry out cooperation
.

Conba intends to entrust the sales team of Consun Pharmaceutical Group to the sales team of Consun Pharmaceutical Group for the varieties of related specialty fields owned by its subsidiaries (including exclusive innovative medical insurance traditional Chinese medicine varieties) in the domestic hospital market; Consun Pharmaceutical is willing to sell its OTC products Products (including OTC products from Guangxi Yulin Pharmaceutical Group Co.
, Ltd.
) are fully cooperating with Conba in branding and marketing
.

In addition, Conba will give full play to its experience and advantages in the transformation and development of digital marketing to assist Consun Pharmaceutical Group in establishing a digital drug and health product marketing platform and business development; in the Yangtze River Delta, where Conba has advantages in marketing resources In the region, the two parties actively carried out and formed in-depth cooperation in market terminals, and further increased the sales scale and market share of Consun Pharmaceutical's prescription drug varieties
.

In terms of R&D cooperation, the two parties will carry out exchanges and cooperation in R&D technologies, projects, products and related rights and interests, and share cooperation resources and achievements
.

Kangchen Bei will transfer the existing and under-development projects and related rights and interests of chronic nephritis, renal insufficiency, diabetic nephropathy, etc.
to Kangchen Pharmaceutical Group; Kangchen Pharmaceutical will choose the opportunity to transfer its existing and research projects to Kangchen Bei The projects and related rights and interests in the core advantageous areas were transferred to Conba
.

The cooperation agreement clearly states that the two parties will jointly promote the introduction of innovative drug pipelines for the urinary system (mainly nephrology) to Consun Pharmaceutical Group
.

Conba is willing to actively assist Consun Pharmaceutical Group to obtain the relevant rights and interests of innovative drugs for diabetic nephropathy whose innovative drug R&D platform invested and cooperated by Conba is already in the clinical research stage

In terms of asset and business integration, the document pointed out that when the two parties believe that the conditions are ripe, they will choose an appropriate way to integrate necessary business and assets, including but not limited to: joint ventures to establish innovative research and development institutions, (digital) marketing platform enterprises, and according to the existing conditions.
It is conducive to the injection or replacement of assets and businesses based on the principles of significantly enhancing the core advantages and competitiveness of both parties
.

02 Learn from each other's strengths and complement each other's weaknesses

02 Learn from each other's strengths and complement each other's weaknesses

According to the cooperation agreement, it can be seen that Kangenbei and Kangchen Pharmaceutical will carry out in-depth cooperation in marketing network and business integration, and the basis of the cooperation between the two parties is that they have deep accumulation in products and sales channels and have their own strengths.

.

Kangenbei has obvious brand advantages in the subdivided drug markets such as urinary, cardiovascular, digestive, respiratory, and eye health, and has created many well-known brands and products such as Qianliekang, Tianbaoning, Changyanning, and Zhenshiming
.

Among them, Qianliekangpulean Tablet, a large variety of traditional Chinese medicine in the category of invigorating the kidney and strengthening the body, is used for the treatment of benign prostatic hyperplasia and chronic prostatitis.

Kangchen Pharmaceutical owns well-known brands such as Kangchen and Yulin.
The drugs it produces and sells are mainly used for the treatment of diseases such as kidney disease, skin disease, bone injury, liver and gallbladder digestion, and imaging diagnosis.
The field of urology is its dominant field
.

The leading product of its kidney disease series, Niaoduqing Granules, is the first modern Chinese patent medicine for the treatment of chronic renal failure in China
.

According to data from Minet.

In addition to products in the field of nephropathy, Consun Pharmaceutical's main product in the imaging series, gadopentetate meglumine injection, has consistently ranked among the top three in the market segment
.

According to the cooperation agreement, it is expected that Conba's Qianliekang series products will become the focus of cooperation between the two parties in the future
.

In terms of specific marketing network, Conba is relatively mature in brand marketing and digital marketing

Conba's mid-2021 financial report shows that it will give full play to its advantages in brand and product resources, and focus on promoting the planning of large-brand and large-variety marketing networks, sales terminal expansion and marketing team building.
Regionally cooperative multi-level drug distribution and sales customers have formed a nationwide sales channel and terminal network, of which more than 300,000 retail pharmacy terminals and hospital terminals have basically achieved full coverage
.

In addition, Conba has established in-depth strategic partnerships with third-party platforms such as "Ali Health", "JD.
com" and "Meituan", "Ele.
me", built a digital marketing system, and further expanded with pharmaceutical commercial chains and retail pharmacies It will continue to expand the development and construction of the terminal network of grassroots community medical care and private hospitals, and accelerate the layout and development of the new retail business of the pharmaceutical industry based on online and offline collaboration
.

Correspondingly, Kangchen Pharmaceutical has a strong advantage in the marketing system of urological drugs
.

If the two parties can reach cooperation in accordance with the agreement, it will further stimulate their own resources and bring broader development space for their products

03 Take multiple measures to get out of trouble

03 Take multiple measures to get out of trouble

In the second half of 2021, Conba continued to make great moves, successively announcing the transfer of 100% equity of Guizhou Beit Company, 25% equity of Dier Pharmaceutical, and 42% equity of Zhenshiming Company.
After being "excluded" from the medical insurance catalog, the company's performance was greatly affected
.

While selling assets to collect funds, Conba chose to continue to adjust and optimize its business structure, expand its product business in non-medical insurance and hospital-dependent markets, and deploy its self-care product business, including over-the-counter drugs and health consumer goods, and achieved good results.

.

According to Conba's 2021 semi-annual report, its self-care product business revenue reached 1.
586 billion, accounting for 51.
01% of its main business revenue, making it the largest core business segment
.

This strategic cooperation with Consun Pharmaceutical may be another move for it to get out of the predicament
.

However, some people in the industry believe that Kangenbei was greatly affected by Salvia miltiorrhiza injection.

In the first three quarters of 2021, Conba’s research and development expenses were about 136 million yuan, and the sales expenses in the same period were about 1.
868 billion yuan, which was more than 13 times the research and development expenses
.

In fact, the phenomenon of emphasizing marketing and ignoring R&D is common in the traditional Chinese medicine industry
.

According to statistics from the WeChat public account "Pharmaceutical Affairs", in the first three quarters of 2021, there are 12 pharmaceutical companies with R&D expenses of more than 100 million yuan in the A-share traditional Chinese medicine sector.

Although under the guidance of national policies, the R&D awareness of traditional Chinese medicine companies has been increasing in recent years, but there is still a big gap compared with the R&D investment of chemical drug companies
.

Recently, policies favorable to the development of traditional Chinese medicine have continued.
At the end of 2021, the State Administration of Traditional Chinese Medicine and other departments will hold the National Traditional Chinese Medicine Comprehensive Reform Demonstration Zone Promotion Conference.
The meeting announced Shanghai, Zhejiang, Jiangxi, Shandong, Hunan, Guangdong, Sichuan, etc.
The first batch of 7 provinces to be approved to build national demonstration zones for comprehensive reform of traditional Chinese medicine
.

It is worth noting that on July 1, 2020, 20% equity of Conba was transferred from Conba Group to Zhejiang Traditional Chinese Medicine Health Industry Group, and Conba became the only pharmaceutical manufacturing enterprise among state-owned holding enterprises in Zhejiang Province.
, is currently in the stage of mixed ownership reform
.

However, despite state funding and favorable policies, Conba has to address the issue of products that limit development, a common dilemma for such companies
.