GBI report | innovative open source, downsizing, non-core product sales... 12 MNC first-half results and strategic inventory

A number of multinational companies have recently released their financial reports for the period from January to June 2022 and held a performance call; GBI collected details and key information on the performance of multinational companies in China from earnings reports and conference calls
.

In addition, the deteriorating global macroeconomic and geopolitical situation has also created certain obstacles
to the business development of multinational enterprises.

Table 1.

Source: Company Annual Report, GBI Analysis

China Market: From important growth poles to performance limits

Various multinational companies have pointed to the COVID-19 outbreak and the continued lockdown in central cities such as Shanghai that have had a negative impact on their business in the first half of 2022 and throughout the year, with some companies saying it has also had an impact on
global performance.

A new round of shock: the implementation of the new version of the medical insurance catalogue and the special collection of insulin

The impact of national health insurance negotiations on the pricing of innovative drugs, and the impact of volume procurement on generic products and generic drugs, remain challenges
that multinational pharmaceutical companies have to face.

Eli Lilly's performance in China was particularly sluggish in the first half of 2022, with its China market revenue plummeting 32% year-on-year to $352 million in the second quarter and falling 15% to $759 million throughout the first half of the
year.

Authorized transactions: The popularity of innovative product trading has not decreased, and non-core products have changed hands to find a way out

In the first half of 2022, multinational pharmaceutical companies are still actively seeking cooperation opportunities in China, including participating in the research and development, overseas and globalization of pipeline products of Chinese biopharmaceutical companies, as well as licensing their own research or mature products
to local companies.

Source: GBI SOURCE transaction page

Sanofi and Tianyan Pharmaceutical reached a research cooperation and exclusive technology licensing agreement in March, Tianyan Pharmaceutical will use its unique SAFEbody technology to develop precision masking safety antibodies, and Sanofi will be responsible for the future further research and development, product development and commercialization of the two candidate products, and has the right to choose two additional candidate antibodies
.

In addition to focusing on the innovative products of Chinese biopharmaceutical companies, multinational pharmaceutical companies are also actively seeking ways
out for their own products.

Since 2021, the first three parties have begun to adjust their product lineups and sales teams, and gradually shift the focus of the treatment field to cope with the pressure of national procurement
.

Win-win cooperation: E-commerce platforms and retail channels drive performance growth

In the first half of 2022, multinational pharmaceutical companies participated in relatively few cooperative transactions, including pharmaceuticals and devices, involving digital health, hospital cooperation and other cooperation transactions in all medical and health fields, only 88, compared with 150 in the same period last year
.

Among the many partners, e-commerce platforms and retail channels have attracted much attention
.

Market strategy under the cold winter of capital: innovation and open source, reduction and throttling

At present, whether it is the global economic situation, the geopolitical situation, or the new crown epidemic that has not abated, it has put invisible pressure
on the entire pharmaceutical industry.

All in all, the pricing restrictions brought about by volume procurement and medical insurance policies may still affect revenue in the next 2-3 years, and the impact of the epidemic will be difficult to eliminate
in the short term.
However, with the completion of industry integration and restructuring, as well as the gradual maturity of emerging technologies and pipeline products, there will always be more possibilities
for growth.