Just in the second half of the year, when the”retaliatory” medical IPO was restarted, the giants also began to buy madly.In the past week, nearly 20billion yuan has been flowing into the field of life science tools。
Recently,According to Bloomberg news, Sinopharm, a domestic pharmaceutical giant, is preparing to spend $1billion to acquire BBI life science, a life science tool company.BBI is headquartered in Shanghai, and its more well-known name is biologics.
Since 1995, biologics has provided DNA synthesis products and services to domestic biological laboratories and scientific research institutions. In 2002, BBI was established, and the equity and business of biotechnology were integrated. In 2014, in the last round of IPO wave of life sciences, BBI briefly landed on the Hong Kong stock exchange. Six years later, the founding team privatized BBI with HK $845million.
Since then, although the news that BBI will apply for listing on the science and technology innovation board has been spread frequently, what people are finally waiting for is a possible grand industrial merger and acquisition.
“Sinopharm group has communicated with the founding team of BBI about the possibility of M & A transactions. At the same time, the founding team of BBI is also contacting other potential acquirers.” Bloomberg wrote in the news. In other words, even if Sinopharm group offered a price nearly 10 times the delisting valuation of BBI two years ago, it is still not fully sure that it will be included.
In fact, on the day after the news that BBI may be merged came out, Madian, another leading IVD raw material manufacturer, announced that it would be offered $1.53 billion for merger. The acquirer was SD Company, a Korean diagnostic company that OEM POCT covid reagent for Roche Diagnostics. These two successive heavy acquisitions also pushed the gold rush of life science tools to a high point again.
Neither Sinopharm nor BBI responded to this acquisition.So what kind of company is BBI? What is the logic behind this transaction? Will Sinopharm group also develop life science tools?We tryanswer.
Upstream Trump –—BBI
Although the volume in the capital market is not large, from the perspective of business quality, BBI was at least once regarded as the upstream ace enterprise of life science tools.
In the prospectus more than 8 years ago, BBI positioned itself as a well-known supplier of life science research products and services in China. Until the last financial report before delisting, self positioning is still the same, which is quite rare in the volatile biotechnology industry.
Specifically, BBI provides various products and customized services for life science experiments through self-development and agency,Including all kinds of reagents and consumables, such as biochemical reagents, molecular biological reagents, protein science reagents, as well as antibodies, experimental consumables, instruments and equipmentEtc. In a sense, for researchers, what BBI can provide is a one-stop service related to experiments. Of course, customized services are the most basic and characteristic services of BBI, including DNA synthesis, RNA synthesis, gene sequencing, nucleic acid protein interaction analysis, etc.
In China, the enterprises closest to the BBI business line includeNorwizan, Kang Weishi, Hanhai new enzymeAnd other molecular biological reagent manufacturers. Earlier, BBI was on a par with Kingsley in the DNA synthesis business.
along withKingsleyThe competitive relationship between cell therapy and cdmo will gradually weaken as they continue to expand their boundaries to complex businesses such as cell therapy and cdmo. From the perspective of business volume, the business scale of BBI is much larger than that of kangweishiji and Hanhai new enzyme, but not as large as that of nuovizan, which has begun to expand its downstream IVD and biomedical businesses.
The core tool field of life science where BBI is located is a track where it is difficult to produce large single products, involving a wide variety of products and technologies. Major manufacturers often rely on their strong industrialization ability in specific technologies to continuously expand SKUs, so as to establish brand influence. For example,Novozan, Hanhai new enzymeHe is good at enzyme technology, andYiqiao Shenzhou, nearshore proteinBased on the recombinant protein stronger and bigger.
BBI’s housekeeping skill is oligonucleotide synthesis, especially in the synthesis of complex and rare oligonucleotides.
Since there is no authoritative data to be updated later, we can only speculate on the position of BBI in the oligonucleotide synthesis Market Based on the data in 2013.In 2013, BBI was the largest supplier of DNA synthesis products in China. Its oligonucleic acid sales revenue was 63.7 million yuan, accounting for 26%of the market, more than the sum of the four manufacturers ranking second to fifth.
An objective fact is that oligonucleotide synthesis is based on the principle of nucleic acid chemistry. The technology itself is very mature, but it still relies on technology, experience accumulation, channel and reputation establishment. The first mover advantage of BBI may help it maintain its market leading position to a certain extent.
At this stage, the demand for artificial oligonucleotides in the life science community continues to rise. This is because it is the key raw material of gene synthesis, which is the starting point of gene therapy.
Artificial oligonucleotides, synthesized from nucleic acid monomers and DNA, are the key basic materials in most biotechnology experiments. The products of DNA synthesis include oligonucleotides and gene sequences, and the difference lies in the length of the synthesized nucleic acid molecules.
Among them, oligonucleotide synthesis is relatively simple. It is a short, single stranded nucleic acid that chemically synthesizes the required sequence. It is the key basis for nucleic acid amplification, detection and analysis. For example, oligonucleotides are used as primers in DNA sequencing and amplification, or as probes in DNA and RNA detection. Another example is gene fragments used to synthesize specific sequences.
Gene synthesis requires oligonucleotides as raw materials, involving a number of complex operations and enzyme reactions, including amplification, cloning, purification, error correction, etc., to form long and double stranded nucleic acids with specific sequences. Relatively speaking, synthetic genes have a wider range of applications, including genetic research, regulation of gene expression, gene and drug discovery.
For example, in the process of gene therapy drug production, the first step is to synthesize the target gene sequence, wrap it to form a plasmid, which is used to transfect adeno-associated virus (AAV), adenovirus, lentivirus and other vectors to obtain the recombinant virus, and then culture, purify, quality control in vitro, and output the stock solution for clinical injection.
At present, gene therapy is in the accelerated period of commercialization.According to frost Sullivan, from 2021 to 2025, the domestic gene therapy market will grow from 268million yuan to 17.9 billion yuan, with a compound annual growth rate of 276%.
It can be seen that at present and in the future, oligonucleotides are standard in most life science laboratories around the world. For Sinopharm group, the acquisition of BBI is almost equivalent to winning an important ticket to the life science tool industry.
An important background for Sinopharm group to acquire BBI is that the field of life science tools in which the latter is located is the hottest medical innovation track in China in the past two years.
Over the past two years, tens of billions of funds have poured into the innovation of life science tools. Since the second half of 2020, a large number of well-known domestic brands have been established in the fields of antigen/antibody, enzyme, bioreactor, cell culture medium and so on, and have entered the fast track of business expansion and external financing.
According to incomplete statistics of arterial orange database,Since March 2020, at least 20 life science tool enterprises have completed two or more rounds of financingThe transaction amount is also constantly standing on a higher new threshold.
For example, auscon biology, a leading domestic cell culture medium enterprise, completed four rounds of financing within two years, raising more than 2.5 billion yuan. Jinyi Shengshi, which provides a one-time overall solution for biotechnology such as kangxinuo biology, has completed three rounds of financing of hundreds of millions of yuan in just one year, breaking the record of financing speed of life science tool enterprises.
Not to mention in this process,PepsiCo, nanotechnology, Yiqiao Shenzhou, novozanCompleted IPO successively,Feipeng biology, kangweishi, inshore protein, Lianchuan biologyAnd others are ready to start at any time.
Interestingly, in addition to business expansion and valuation,Some star enterprises of life science tools even started LP。 Earlier, PepsiCo announced that it plans to subscribe for the share of a US dollar fund with its own funds of no more than US $2million, mainly in the fields of biotechnology, life sciences and general health. Coincidentally, novozan and Feipeng biology have also laid out professional equity investment funds in a low-key way. This may also be a sign of the maturity of the domestic life science tool industry.
Behind this is the rapid expansion of the life science service market itself.
On the one hand, in the past few years, the global biomedical innovation industry, as the downstream of life science tools, has become the largest gold attraction, with more than trillion dollars of funds injected in the short term.According to frost Sullivan statistics, in 2020, the R & D expenses of global pharmaceutical enterprises were $187.8 billion, and the R & D expenses of domestic enterprises above Designated Size in the biomedical industry were 78.5 billion yuan, an increase of 28.7%year-on-year.This has led to the continuous growth of the demand for bioscience services. People have spent a lot of money on the exploration in the fields of mRNA vaccine, cell and gene therapy, which has brought additional increment to the expansion of this industry. According to Soochow securities, if laboratory equipment is not considered, the overall market size of domestic life science tools will exceed 60billion yuan in 2020. From 2020 to 2024, this market will continue to grow at a compound annual growth rate of 20%.
On the other hand, after the COVID-19, tested domestic life science tool manufacturers began to accelerate the replacement of imported brands with high-quality products and services.Because life science tools are a comprehensive system based on interdisciplinary innovation, they have been monopolized by imported brands in the past. However, under the COVID-19, logistics, freight transportation, epidemic prevention and control and other factors have forced midstream users to find suppliers in China.
In China, after years of technology accumulation, some enterprises have been able to compete with imported brands in the performance of mainstream products, such as enzymes provided by nuovizan, antigens provided by Feipeng biology, synthetic DNA products provided by BBI, etc. they respond quickly at a price of 50-80%discount, gradually grabbing back the market, and ushered in explosive growth in their revenue. For example,Nuovizan’s revenue in 2020 was 5.83 times that of the previous year, while Feipeng biology also achieved a revenue of 3.69 times。
If consideringLife science services account for more than 60%of the costs of most biotechnology enterprisesIn the context of controlling medical insurance expenses in the future, the follow-up growth potential of domestic life science tool enterprises is still considerable.
In previous exchanges with some investment institutions, many investors fed back to arteria that they had taken life science tools as the key direction of mining targets. Some investment institutions even regularly learn relevant knowledge of life science tools within the team,”it’s not a question of whether to invest, but how to invest.” Some investors said.
What is the odds of Sinopharm group winning?
Finally, the homecoming Pharmaceutical Group. As mentioned earlier, the cooperation between Sinopharm group and BBI was not deep before the idea of M & A came out. But asThe only two domestic pharmaceutical enterprises among the global top 500 enterprises, there are not many points in the industrial map of Sinopharm group that are consistent with the business and future of BBI. In the view of arterial network, the two sides may achieve resource collaboration in three directions.
The first is the cooperative research and development of vaccines.Sinopharm group is the largest vaccine manufacturer in China.Sinopharm group has six major domestic biological products research institutes under its jurisdiction, including Beijing, Lanzhou, Chengdu, Shanghai, Changchun and Wuhan. It is a national team for vaccine research and development and production, such as今年产人用疫苗7亿剂次，能提供80%的国家免疫规划用疫苗。新冠期间，国内最早上市的灭活疫苗之一，便出自国药集团旗下的北京生物制品研究所。
在国药资本的投资生态中，不乏与BBI同属生命科学工具赛道的企业，比如赛分科技，也包括潜在的用户群体, such as复诺健生物、康立明生物等，由此形成的业务协同，无疑可以帮助被并购后的BBI迅速建立起更强的竞争能力。