Yuandong Biological Co., Ltd., A "Returning Examinee", Is Going To Be Listed At A Higher Speed And Wants To Make A Breakthrough With Capital In Order To Transform "Imitative Innovation"

A new board of pharmaceutical manufacturing is added.

On the evening of July 29, the CSRC approved the IPO registration of Chengdu Yuandong biopharmaceutical Co., Ltd.

The identity of Yuandong biology is somewhat special. This is the second returned examinee after Titan technology. It withdrew its listing application on the basis of four rounds of inquiries in August last year, and restarted its IPO in April this year. At present, the company has been approved prior to the IPO of Titan technology and is the first to enter the IPO process.

As far as the industry is concerned, Yuandong biology also has its own special features. Its main business is the research and development and production of chemical drugs, and it is the first purified medicine enterprise on the science and technology innovation board. Industry insiders believe that the successful listing of Yuandong biological has a certain demonstration significance and driving role in driving chemical and pharmaceutical industry companies to enter the science and technology innovation board.

Back to the company itself, can not help but let the outside world on the Yuan Dong biological reasons for the previous cancellation. By comparing the two listing applications submitted by Yuandong bio, we can see from the details of the differences that Yuandong biological has put forward in its strategic adjustment and its determination to break through the industry risk with the help of this listing.

First customs clearance

The audit process of Yuandong biology is representative. On the basis of the previous four rounds of inquiry, the audit was accelerated after returning to the science and technology innovation board examination room.

In April 2019, Yuandong bio started the IPO road of the science and technology innovation board, belonging to a group of enterprises that were accepted earlier. However, in August of that year, the progress of the project showed that it was terminated, and the company took the initiative to cancel the order. As for the reason for withdrawing the application, Yuandong biology once explained to the media that "the company's strategy has been adjusted".

On April 22, 2020, the science and Technology Innovation Park launched a new challenge to the East. With the basis of the previous audit, Yuandong biology passed the review of the municipal Party Committee on the science and technology innovation board on June 10 after only one round of inquiry, and the audit time was only 49 days. From the audit results, the company has no audit opinions that need to be implemented and has passed the meeting unconditionally.

At that time, this audit timeliness was also at the forefront of the context, which was regarded as a typical case of the speed-up of the scientific and technological innovation board.

However, since Yuandong biology has launched IPO twice, it is still unavoidable for the outside world to compare differences. The company's listing in the 21st century is actually based on the report of the company's strategy.

The company has been engaged in the production and sales of pharmaceutical raw materials, pharmaceutical preparations, injections and chemical products.

However, Yuandong bio's main source of income is generic products. From 2017 to 2019, the sales revenue of generic pharmaceutical products accounted for 97.39%, 96.15% and 96.31% of revenue, respectively. Biopharmaceutical products have not yet contributed to the company's revenue.

Therefore, in the previous IPO, Yuandong bio positioned the company as "R & D and production of high-end chemicals". However, in the second IPO, the project of "biopharmaceuticals" was written in its positioning and changed to "R & D and production of high-end chemical and biological drugs". Correspondingly, the fund-raising projects have also been adjusted. Yuandong biological has increased the raised funds by 48 million yuan, increased the biological drug research projects, and planned to invest 130 million yuan in the raised funds; at the same time, it has reduced the investment in the construction of innovative drug industrialization base in the field of major diseases, and increased the amount of fund raised for drug clinical research projects.

It is not difficult to see the intention of strategic adjustment of the company by increasing the research projects of biological drugs and broadening the business boundary.

According to the prospectus, the company has formed reserves of ep-9001a mAb injection and d0011 long-acting fusion protein injection as two new drug projects under development.

Transformation to "imitation and innovation" integrated enterprise

On the one hand, it is increasing the research on biological drugs; on the other hand, in the latest prospectus, Yuandong biological said that it is transforming from a generic drug enterprise to a "generic innovation" integrated enterprise.

From the income source of Yuandong biological, it is not difficult to see the dilemma of generic pharmaceutical enterprises.

In the previous IPO application draft, Yuandong biological mentioned in the risk prompt that the main products had the risk of being further copied. According to the prospectus, the revenue of the seven major products accounts for about 80% of the total revenue. At present, these products may be further imitated by other pharmaceutical enterprises. If the main pharmaceutical companies succeed, it may affect the market share of other companies.

This is not groundless worry. According to the prospectus, the company's caffeine citrate injection is the first generic product, which was launched in 2016. The price of the product is lower than that of the imported product. After the listing, it continuously seizes the market space of the imported product, and the market share continues to increase. The domestic market share of the product is the second, which can realize import substitution.

Or aware of the risks of generic drugs, Yuandong bio put forward the combination of "imitation and innovation" in the second IPO.

However, the company admits that it is still in the early stage of the combination of "imitation and innovation". At present, as a generic pharmaceutical enterprise, the company also needs to invest some funds for marketing and other sales activities.

This has also responded to the high sales cost problem widely questioned by the market.

During the reporting period, the sales expenses of Yuandong biology were about 224 million yuan, 412 million yuan and 535 million yuan respectively, of which the promotion service fees accounted for 90.2%, 93.4% and 91.5% of the sales expenses respectively, accounting for a very high proportion.

In this regard, the company also explained that it was the high cost of sales, and the implementation of the "two ticket system" policy also had an impact. The company's distributors gradually changed from the original promotion and distribution distributors to distribution distributors. The former undertakes the functions of regional and localized product promotion and distribution, so the sales cost rate of the company's products is relatively low, and the mode of cooperation with distribution dealers is relatively low It only undertakes the function of product distribution, and the marketing of products is carried out by professional marketing service providers, so the sales cost rate is relatively high.

A securities trader familiar with the pharmaceutical industry analyzed to the reporter, "under the background of the two ticket system, the sales expenses of drugs were originally invoiced by multi-level distributors in the whole circulation link, but now only" two tickets "can be issued. This kind of cost is more transferred to the pharmaceutical manufacturing enterprises themselves, or at most one dealer can share them. The high selling cost of Yuandong biology is a typical influence brought by the two vote system, but the high selling cost does not necessarily constitute an obstacle to IPO. "

In terms of sales expenses, the supervision pays more attention to the problem that the company's marketing is outsourced to professional pharmaceutical marketing service providers, and how to ensure the compliance during the process. Whether in the inquiry letter or at the meeting of the listing committee, this question has been asked. But Yuandong biological finally got through the customs, which must have proved itself.

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