What is the adjustment logic of the global TOP10 pharmaceutical companies for spin-off, divestiture and sale, and structural adjustment?

Multinational pharmaceutical companies are completing a new round of adjustment and transition
.
Sanofi listed its drug production business independently, and Novartis announced a number of structural adjustments.
In the past two years, the world's top 10 pharmaceutical companies have made major or minor adjustments almost without exception
.
What is the logic behind these adjustments? And what new development directions are multinational pharmaceutical companies focusing on? 01.
Sanofi and Novartis adjusted one after another.
As soon as April arrived, MNC had a new strategic move
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The first is that Sanofi's move to split its API business is coming to an end
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Sanofi announced that the French securities market regulator AMF has approved the listing prospectus of its API company EUROAPI.
Once approved by the general meeting of shareholders, it is expected to be split and listed on Euronext Paris on May 6
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According to the announcement, the original shareholders of Sanofi will get 58% of EUROAPI shares in exchange for every 23 shares, the French government investment fund Epic Bpifrance will get 12% at a price of 150 million euros, and Sanofi itself will continue to retain 30% of the shares.
% of the shares
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This split has a long history.
Sanofi announced its plan to divest its API business two years ago
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In February 2020, Sanofi announced plans to combine six API manufacturing sites in Europe to create an API company that manufactures and sells active pharmaceutical ingredients to third parties, forming the world's second-largest API manufacturing business
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In January 2021, Sanofi officially named the new company focused on APIs EUROAPI, appointing Karl Rotthier, former CEO of Dutch drugmaker Centrient Pharmaceuticals, as CEO
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At that time, Sanofi announced that the new company headquartered in France will employ more than 3,000 technical employees and will become the largest European API company, with sales expected to reach 1 billion euros by 2022, and mentioned that it will consider List EUROAPI on Euronext Paris in 2022
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Once the listing is successful, it also announces that the split that lasted more than two years has officially come to an end
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Regarding the splitting of the API business, Sanofi has explained that this move will help alleviate the problem of drug shortages and improve Europe's over-reliance on APIs in Asia, especially China and India
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On the other hand, the split is the need for Sanofi's own strategic adjustment
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After the diabetes business represented by insulin fell into weakness, Sanofi has been working hard to find new products as a business growth point in recent years
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According to the 2021 annual report, Sanofi's Dupixent (duprilumab) achieved sales revenue of 5.
249 billion euros, a year-on-year increase of 52.
7%
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In December 2019, Sanofi CEO Paul Hudson announced a new strategic framework, adjusting the business to specialty medicines (immunization, rare diseases, hematology, neurology, oncology), vaccines and general medicines (diabetes, cardiovascular and Mature drugs) three core units, and the establishment of three global business units of generic drugs, specialty drugs and vaccines, as well as an independent consumer healthcare business unit, will lead Sanofi into the next cycle
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In addition to structural adjustment and increasing the layout of new pipelines, splitting and "slimming down" is naturally an important means for Sanofi to increase revenue and reduce expenditure
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Philippe Luscan, executive vice president of global industrial affairs at Sanofi, said in a statement: "As an independent company, the new entity will be agile and able to unlock growth potential quickly, especially at a time when the market is growing at a rate of 6%.
International
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” Sanofi expects operating margins to increase slightly in 2022 after the divestiture of EUROAPI
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Coincidentally, Novartis has made similar adjustments
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In April, Novartis CEO Vas Narasimhan announced a new organizational structure and operating model to support the company's innovation, growth and productivity goals over the next decade
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Novartis announced that it will merge the two business divisions of pharmaceuticals and oncology into one Innovative Medicines Division (IM, Innovative Medicines), and divide it into two separate business organizations based on geographic regions to create two independent business organizations in the United States and international, with independent operations, independent accounting, Overall responsibility for all therapeutic areas
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According to the 2021 financial report, Novartis' annual sales revenue reached US$51.
626 billion, a year-on-year increase of 6%, of which the innovative pharmaceutical business sales revenue, which is divided into two business units of Novartis Oncology and Novartis Pharmaceuticals, was US$42 billion, an increase of 8% year-on-year
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Novartis believes that this move will better improve focus, enhance competitiveness and drive synergies.
The new model will help Novartis focus on core therapeutic areas such as cardiovascular, hematology, solid tumors, immunology and neuroscience
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The new U.
S.
innovative medicines division will help it achieve its top-five U.
S.
sales target, while the international innovative medicines division will maintain and develop Novartis' leading position in the international market
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In addition, Novartis also announced the integration of strategy, R&D portfolio strategy and business development, the establishment of new strategy and growth functions; the merger of the original technology operations and customer and technology solutions departments to create new operations
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Comprehensive administrative functions such as finance, personnel, compliance, legal affairs, and communications will also be integrated at the global level
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Novartis said it expects to save at least $1 billion in selling and administrative expenses by 2024 with the introduction of the new organizational structure
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For the split plan, Novartis has already put it on the agenda
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In October 2021, Novartis announced its third quarterly report and announced that it would consider the spin-off or sale of its generic drug business unit Sandoz, which is expected to be completed within 2022
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Since then, Sweden's EQT Group and Germany's Struengmann family, as well as private equity institutions Blackstone Group and Carlyle Group, have all spread the news of their intention to acquire
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02.
The logic of structural adjustment of the global TOP10 pharmaceutical companies The split, reorganization and structural adjustment of multinational pharmaceutical companies are not new.
What needs to be focused on is the logic after the change and the new development direction
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2020 is a key node, and a very important reason is that the outbreak of the epidemic has changed the global market environment, thus affecting the layout of multinational pharmaceutical companies
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Almost all pharmaceutical companies need to adjust their strategies to get through this difficult period.
Whoever adjusts well will get more of the new cake
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If we summarize the top 10 global pharmaceutical companies, their models are nothing more than the following five: The first is to divest non-core businesses and some traditional mature business projects, integrate classification and layering, and carry out system optimization
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For example, GSK officially announced the spin-off of its consumer health business at the end of February 2022
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In the past seven or eight years, there have been news of divestitures, but they have been delayed
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The Consumer Health business at the time of the spin-off had sales of around £9.
6bn in 2021, with a 4% year-on-year CER growth
.
During the same period, the turnover of GSK's pharmaceutical division was 17.
729 billion pounds, and CER increased by 10% year-on-year, of which new drugs and new special drugs were 10 billion pounds, and CER increased by 26% year-on-year
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The new GSK, which is focused on vaccines and specialty medicines, will focus on infectious diseases, HIV, oncology and immunology in the GSK CEO's spin-off plan, and will reach sales of £33bn by 2031
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In addition to continuously strengthening existing pipelines, GSK also expands pipelines in various fields through "buy, buy, buy"
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First of all, in the hot mRNA field, GSK's bet is not only on the new crown vaccine, but also announced with CureVac that it has reached an agreement on the development and commercialization of up to five mRNA-based vaccines and monoclonal antibodies against infectious disease pathogens
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GSK has also spent a lot of money in the field of immunity and anti-tumor, such as cooperation around TIGIT, CD96, PVRIG and other targets
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The second is to optimize the layout of the system from the full cost model, including sales, procurement, research and development, raw materials, etc.
, systematically optimize the business chain, and improve the modular system operation system
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The third is to increase technology mergers and acquisitions and technology acquisitions for innovative product lines in the high-end field
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Almost all TOP10 multinational pharmaceutical companies are spending a lot of money to acquire new technology pipelines, such as the cooperation between AstraZeneca and Daiichi Sankyo on DS-8201.
Gilead, which has been the best in the field of anti-virus in the past, is particularly obvious.
Whether it is the acquisition of Immunomedics, which focuses on the development of ADC drugs, for $21 billion to acquire advanced ADC drug development technology and pipelines, or the acquisition of FortySeven for nearly $5 billion to obtain compounds such as CD 47 antibodies
.
The fourth is to streamline the business and optimize and reorganize the top and all levels of management for pipelines, optimize and streamline personnel
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For example, Sanofi merged six API production bases in Europe into an independent API company, Novartis streamlined the generic drug division Sandoz and finally decided to divest, and optimize talent and cost for generic drugs
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The fifth is to strengthen the strong cooperation model and resource complementation.
For the internal pharmaceutical enterprises, adopt an inward-generated endogenous "financing" model, and increase the planning and cash flow business
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Such as the combination of Takeda and Shire
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To sum up, the top ten multinational pharmaceutical companies have divested their pipelines to focus on the main business because of these five reasons, and their new directions are also obvious.
Tumor immunity will become the next cash flow, and the field of neuroscience has become the focus of everyone.
Looking forward to the potential areas of development, in addition to this mainstream direction, many pharmaceutical companies are also paying attention to the direction of rare disease therapy
.
These layouts are closely related to current technological progress.
For example, gene therapy is mainly used in the fields of rare diseases and genetic diseases
.
Of course, the global adjustment of multinational pharmaceutical companies has also appeared in China
.
Takeda is a good example of the series of divestitures Takeda made following the acquisition of Shire
.
Recently, the company merged its two product lines in the digestive field—pantoprazole sodium enteric-coated tablets and vonola fumarate raw tablets, mainly in response to the market environment, and did not involve too many personnel adjustments
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Merging product lines is generally regarded as a routine move by pharmaceutical companies to reduce costs
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Another example is AstraZeneca China's series of structural adjustments to streamline costs and improve efficiency
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