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Under the background that the country encourages pharmaceutical innovation, the CXO (pharmaceutical outsourcing) industry has taken the lead.
In addition, the industry has no centralized procurement risk and has a relatively high boom.
This year, it has been favored by investors
.
However, since the second half of the year, Hillhouse continued to reduce its holdings in the CXO industry, which has attracted the attention of the industry
.
On August 25, Hillhouse withdrew from Tigermed’s top ten shareholders of tradable shares, and as of June 30, Hillhouse still held 7.
5 million shares, ranking the tenth largest shareholder of tradable shares
.
On September 24, Hillhouse continued to reduce its holdings of Fangda Holdings 21.
974 million shares, and its shareholding ratio dropped from 5.
57% to 4.
50%
.
It is understood that Hillhouse Investment Fangda Holdings and held the shares for 2 years
.
Then on September 30, Hillhouse again withdrew from the top ten shareholders of tradable shares of Kailai Ying, and is expected to reduce its holdings by at least 36% of the shares
.
As of June 30, Hillhouse still held at least 2.
2 million shares of Calais and ranked its sixth largest shareholder of tradable shares
.
It is understood that Hillhouse has always been very optimistic and has a strong presence in the CXO industry
.
For example, Hillhouse participated in a strategic investment of US$63 million before WuXi AppTec’s listing.
After the listing, it invested another 4.
8 billion yuan in shares on July 26, 2019.
As of the first quarter of this year, it held 25,356,700 shares; in June 2018, it was approved.
The transferee, Ye Xiaoping, invested in Tigermed in the form of equity; in October 2020, Hillhouse subscribed for 4,405,300 shares of Kailai Ying (with a capital of nearly 1 billion) through a fixed increase, accounting for 1.
82% of the total share capital, becoming the company's sixth Major shareholder; Fangda Holdings was listed on the Hong Kong Stock Exchange at the end of May 2019.
Hillhouse, as a cornerstone investor, has a subscription scale of up to US$50 million
.
So, what is the reason that Hillhouse began to frequently reduce its holdings in the CXO industry? Does this mean that capital's attitude towards the CXO industry has changed? Industry analysts believe that there are two main reasons
.
On the one hand, after two years of prosperous development, the share prices of companies in the CXO industry are generally high, so profit reduction is a normal phenomenon
.
Choice data shows that as of the close of October 29, WuXi Biologics, Kailai Ying, Kang Long Chemical, WuXi AppTec, Tigermed Pharma have P/E ratios of 145.
51 times, 105.
69 times, 103.
12 times, 101.
26 times, and 63.
28 times, respectively
.
The CRO index has risen by 384.
43% in the two years since 2019
.
On the other hand, despite the vigorous development of innovative drugs, the prospects of the CXO industry are still promising
.
According to a report released by Frost&Sullivan in June 2021, the global pharmaceutical industry's R&D investment will increase from US$224.
1 billion in 2021 to US$312.
9 billion in 2026, with a compound annual growth rate of approximately 6.
9%
.
The R&D investment in China's pharmaceutical industry will increase from US$29.
8 billion in 2021 to US$55.
1 billion in 2026, with a compound annual growth rate of approximately 13.
1%
.
But behind the positive outlook of the CXO industry, the industry is also facing stricter supervision
.
In early July 2021, the "Guiding Principles for Clinical Research and Development of Anti-tumor Drugs Oriented by Clinical Values" was released.
The document stated that "the development of new drugs should provide patients with better treatment options as the highest goal, and when non-optimal treatments are selected as controls Even if the clinical trial reaches the preset research goal, it cannot prove that the trial drug can meet the actual needs of patients in the clinic, or that the value of the drug to patients cannot be proved
.
” The industry believes that the release of this document means the development of anti-tumor drugs.
More stringent requirements on capital investment and clinical design will have a huge impact on the CXO industry
.
In addition, on June 28, the National Health Commission also formulated and issued the "Management Indicators for the Rational Application of Anti-tumor Drugs (2021 Edition)"; "Notice"
.
From the perspective of the industry, after the implementation of this series of policies, the development and commercialization of innovative drugs will be affected, and it will also indirectly affect the orders of the CXO industry
.
In addition, the industry has no centralized procurement risk and has a relatively high boom.
This year, it has been favored by investors
.
However, since the second half of the year, Hillhouse continued to reduce its holdings in the CXO industry, which has attracted the attention of the industry
.
On August 25, Hillhouse withdrew from Tigermed’s top ten shareholders of tradable shares, and as of June 30, Hillhouse still held 7.
5 million shares, ranking the tenth largest shareholder of tradable shares
.
On September 24, Hillhouse continued to reduce its holdings of Fangda Holdings 21.
974 million shares, and its shareholding ratio dropped from 5.
57% to 4.
50%
.
It is understood that Hillhouse Investment Fangda Holdings and held the shares for 2 years
.
Then on September 30, Hillhouse again withdrew from the top ten shareholders of tradable shares of Kailai Ying, and is expected to reduce its holdings by at least 36% of the shares
.
As of June 30, Hillhouse still held at least 2.
2 million shares of Calais and ranked its sixth largest shareholder of tradable shares
.
It is understood that Hillhouse has always been very optimistic and has a strong presence in the CXO industry
.
For example, Hillhouse participated in a strategic investment of US$63 million before WuXi AppTec’s listing.
After the listing, it invested another 4.
8 billion yuan in shares on July 26, 2019.
As of the first quarter of this year, it held 25,356,700 shares; in June 2018, it was approved.
The transferee, Ye Xiaoping, invested in Tigermed in the form of equity; in October 2020, Hillhouse subscribed for 4,405,300 shares of Kailai Ying (with a capital of nearly 1 billion) through a fixed increase, accounting for 1.
82% of the total share capital, becoming the company's sixth Major shareholder; Fangda Holdings was listed on the Hong Kong Stock Exchange at the end of May 2019.
Hillhouse, as a cornerstone investor, has a subscription scale of up to US$50 million
.
So, what is the reason that Hillhouse began to frequently reduce its holdings in the CXO industry? Does this mean that capital's attitude towards the CXO industry has changed? Industry analysts believe that there are two main reasons
.
On the one hand, after two years of prosperous development, the share prices of companies in the CXO industry are generally high, so profit reduction is a normal phenomenon
.
Choice data shows that as of the close of October 29, WuXi Biologics, Kailai Ying, Kang Long Chemical, WuXi AppTec, Tigermed Pharma have P/E ratios of 145.
51 times, 105.
69 times, 103.
12 times, 101.
26 times, and 63.
28 times, respectively
.
The CRO index has risen by 384.
43% in the two years since 2019
.
On the other hand, despite the vigorous development of innovative drugs, the prospects of the CXO industry are still promising
.
According to a report released by Frost&Sullivan in June 2021, the global pharmaceutical industry's R&D investment will increase from US$224.
1 billion in 2021 to US$312.
9 billion in 2026, with a compound annual growth rate of approximately 6.
9%
.
The R&D investment in China's pharmaceutical industry will increase from US$29.
8 billion in 2021 to US$55.
1 billion in 2026, with a compound annual growth rate of approximately 13.
1%
.
But behind the positive outlook of the CXO industry, the industry is also facing stricter supervision
.
In early July 2021, the "Guiding Principles for Clinical Research and Development of Anti-tumor Drugs Oriented by Clinical Values" was released.
The document stated that "the development of new drugs should provide patients with better treatment options as the highest goal, and when non-optimal treatments are selected as controls Even if the clinical trial reaches the preset research goal, it cannot prove that the trial drug can meet the actual needs of patients in the clinic, or that the value of the drug to patients cannot be proved
.
” The industry believes that the release of this document means the development of anti-tumor drugs.
More stringent requirements on capital investment and clinical design will have a huge impact on the CXO industry
.
In addition, on June 28, the National Health Commission also formulated and issued the "Management Indicators for the Rational Application of Anti-tumor Drugs (2021 Edition)"; "Notice"
.
From the perspective of the industry, after the implementation of this series of policies, the development and commercialization of innovative drugs will be affected, and it will also indirectly affect the orders of the CXO industry
.