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By the end of 2024 at the earliest [With biomedical industry investment and financing]

Recently, the 42nd annual J.P. Morgan Healthcare Conference (JPM) concluded in San Francisco, USA. At this year's conference, "Where should biomedicine go in 2024 and beyond?" Become one of the focus issues. This year's conference attracted nearly 30 Chinese pharmaceutical companies to participate, including Beigene, Legendary Biology, Aseng Pharmaceutical, Pharming Biological, Zaiding Pharmaceutical and so on.


In this regard, JP Morgan Chase Greater China healthcare industry research head Huang Yang said that from the overall situation of the industry, at the just-concluded JPM Global Healthcare Industry Annual meeting, some overseas CXO companies also pointed out that although biotechnology investment and financing tend to be stable, but have not yet felt the full recovery of the biomedical industry. Especially in the previous two consecutive years of investment and financing cooling environment, from the industry's full recovery may still take time.


Huang Yang further said that the recovery of the biomedical industry is definitely a strong correlation between the improvement of the environment, interest rate cuts, and the improvement of the economic environment, and from the existing situation, "spring" may not yet come. Huang Yang believes that investment and financing to reflect the income end of the enterprise, the profit end, whether the company from the primary market to obtain funds, or listed companies from the secondary market to obtain funds, into income or profit takes a certain amount of time, generally speaking, the average cycle takes 2 to 4 quarters. This also means that a full recovery in the performance of the biomedical industry may not be seen until the end of 2024 at the earliest, and as late as 2025. However, he also pointed out that it is expected that in the second half of 2024, the industry will be able to see a pick-up in market sentiment.


Look back at the investment and financing situation of the biomedical industry from the focus topics of this conference:


-- Slowing investment and financing in the biomedical industry


According to the IT Orange database, investment and financing in China's biomedical industry will reach its peak in 2021, with a total of 1009 investment and financing events, and a total of 256.38 billion yuan of investment and financing. After 2021, China's biological industry is cold, and investment and financing events and financing amounts show a "cliff" decline. In 2022, there were 779 financing events in China's biomedical industry, down 22.8% from the previous year; The amount of financing was 178.137 billion yuan, down 30.5% from the previous year. In the first half of 2023, there were only 251 financing events in China's biomedical industry, with a financing amount of 50.809 billion yuan.


-- Investment and financing in the biomedical industry is still at an early stage


From the analysis of investment rounds in the biomedical industry, the current financing rounds in the biomedical industry are mainly concentrated in the A round, and the B round events have gradually increased in recent years. Still in the early stages, the total number of Series C and beyond and strategic investments accounted for about 16%.


From the distribution of investment and financing events in the biomedical industry in the past five years, the number of A round of investment and financing events accounted for about 38%; The number of Series B financing events accounted for 20%; The number of strategic investment events accounted for more than 12%. Combined with the above analysis of the amount of A single financing, China's biomedicine industry is currently in the growth stage, and the future investment and financing methods will be dominated by equity financing, the investment body will still be dominated by third-party investment institutions, and the financing rounds will be more concentrated between the A-IPO.


-- Investment and financing in the biomedical industry are concentrated in Shanghai, Jiangsu, Beijing and Guangdong


From the perspective of corporate financing areas in the biomedical industry, Shanghai currently has the most financing enterprises, with a total of 744 cases from 2015 to 2023, including 176 cases in 2021 and 120 cases in 2022.


-- Investors in the biomedical industry are mainly investment enterprises


According to the summary of the investment subjects in the biomedicine industry, the investment subjects in the biomedicine industry in China are mainly investment types, and the representative investment subjects are Sequoia Capital, Lead Venture Capital, PWC Capital and so on. Industrial investment subjects include Fosun Pharmaceutical, Huashen Xingrui, Haixiang Pharmaceutical and so on.


Zheshang Securities Research Institute biomedicine industry analyst Guo Shuangxi said that with China's biomedicine on the track of high-quality development, is from imitation innovation to original innovation transformation, a large number of innovative pharmaceutical companies have opened the official volume cycle, some pharmaceutical companies are expected to start making profits in the next three years, so the current is very likely to be the bottom of the business cycle of innovative pharmaceutical companies. The beta effect of innovative drug industry will continue to rise.


Guo Shuangxi believes that the next three years will be the peak of domestic innovative drug commercialization, the medical insurance payment price of the products that have been listed in the early stage is gradually clear under the simple renewal rules of medical insurance negotiations, and good innovative drug products are expected to enter a stable or even rapid volume period, further promoting the profitability of local innovative drug companies. At the same time, many domestic innovative drug products have international competitiveness, and internationalization will continue to break through.


The Forward-looking Economist APP Information Group


For more research and analysis of this industry, please refer to the "China Biomedical Industry Development Prospect Forecast and Investment Strategic Planning Analysis Report" of Prospective Industry Research Institute.


At the same time, the Prospective Industry Research Institute also provides industrial big data, industrial research reports, industrial planning, park planning, industrial investment promotion, industrial map, intelligent investment promotion system, industry status certification, IPO consultation/research, IPO working paper consultation and other solutions. To cite the content of this article in any public information disclosure such as the prospectus, the company's annual report, etc., requires the formal authorization of the Prospective Industry Research Institute.
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Over $17 billion! 2024 medical BD deal can not look back
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2024-01-17

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