Yesterday, a pharmaceutical company announced that it will gradually divest the generic drug business whose performance did not meet expectations

[Pharmaceutical Network Industry News] On the evening of August 16, Sihuan Pharmaceutical announced on the Hong Kong Stock Exchange that it would gradually divest its generic drug business and other non-core big health businesses whose performance did not meet expectation.
According to the announcement, the Group intends to set the overall organizational structure as a dual organizational structure of the group headquarters and the business platform headquarters, and at the same time, the two biopharmaceutical sectors of Xuanzhu Biotechnology C.
, Lt.
and Jilin Huisheng Biopharmaceutical C.
, Lt.
will each establish a business platform headquarter.
.The company will continue to provide strategic guidance and exercise shareholder rights to the headquarters of the Biopharmaceutical Business Platfor.
In addition, the company will focus its management focus on business segments with higher growth potential, and optimize and integrate the generic drug business, including gradually divesting the generic drug business and other non-core big health businesses that did not meet expectations, so as to improve the Group's operational efficienc.
Analysts believe that Sihuan Pharmaceutical's divestiture of its generic drug business is because, on the one hand, its generic drug business is lower than expected due to the impact of policy changes in the pharmaceutical industry; on the other hand, the company's generic drug business is not in line with its long-term strategic pla.
The future growth strategy of the pharmaceutical industry is an integrated platform for the medical beauty business and the R&D, production and sales of innovative drug.
The company's divestiture of the generic drug segment can make its business more focused, the company's business can be more focused, increase the positive synergy of the company's internal cooperation, and improve the fourth ring Pharmaceutical business efficienc.
According to the industry, it is a kind of weight loss for companies to consider divesting the generic drug busines.
The management costs of related businesses outweigh the benefits, and divesting is more pros than con.
Other businesses can also bring synergies due to this divestitur.
It is reported that in addition to Sihuan Pharmaceutical, local companies such as Hengrui Pharmaceuticals, Chia Tai Tianqing, CSPC, Kelun Pharmaceuticals, Simcere Pharmaceuticals, et.
, have all carried out certain "cuts and separations" in the field of generic drug.
Among them, Hengrui announced at the end of 2019 that it would stop most generic drug projects and will focus on the research and development of innovative drugs to achieve differentiated competition and output of drug product.

In addition, Hengrui Medicine also said recently when answering questions from investors that the company continued to increase investment in research and development, and while ensuring new drug discovery and clinical development projects, a number of new technology platforms with independent intellectual property rights, such as proteolytic targets To chimera (PROTAC), molecular glue, antibody drug conjugate (ADC), bi/multispecific antibody, gene therapy, mRNA, bioinformatics, translational medicine,et.
The data shows that Hengrui Medicine's R&D investment is quite aggressiv.
In 2021, the cumulative R&D investment will increase by 234% year-on-year to 203 billion yuan, and the proportion of R&D investment in sales revenue will reach 295.
According to the 2021 financial report released by Kelun Pharmaceuticals, compared with 2020, the company's R&D personnel have decreased by 627, or nearly 20%, that is, from 3,215 in 2020 to 2,588 in 2021.It is understood that the reduced R&D personnel are mainly responsible for the pharmaceutical research of domestic generic drug.
Analysts pointed out that with the advancement of centralized procurement, the price of generic drugs will decreas.
By divesting the generic drug business, the company's valuation logic can be reshape.
Innovative drug business will become the main business driver in the future, and sustainable innovative drug business can increase investmen.
value proposition of the compan.
Ruxin Litai recently disclosed in the announcement that the normalization of centralized procurement will promote the return of the price of generic products to a reasonable level, and at the same time, it will also encourage pharmaceutical companies to devote more energy to innovative research and developmen.
In the future, innovative drugs and innovative medical devices may become the main growth drivers for the development of the pharmaceutical industr.
Based on this, innovative drugs + innovative medical devices have become the two axes for Xinlitai's transformatio.
Huadong Medicine has also continued to strengthen its transformation, and the transformation paths have become more diverse, mainly covering innovative drugs, medical beauty, industrial microbiology and other fields, and the transformation results are quite remarkabl.

Among them, in the field of pharmaceutical research and development, Huadong Medicine is deeply engaged in the fields of specialty, chronic disease medicine and special medicine, focusing on the research and development of innovative drugs and high-tech barrier generic drugs in the three core therapeutic areas of tumor, endocrine and autoimmunit.
Today, more and more pharmaceutical companies have begun to focus on innovation and transformatio.
Analysts said that under the sharp reduction in the space for generic drugs, whether it is Hengrui Medicine, Qilu Pharmaceutical, and Yangzijiang Pharmaceuticals, which started with generic drugs, or Yunnan Baiyao and Buchang Pharmaceuticals, which started with traditional Chinese medicine, they are all telling the outside worl.
How important is innovatio.