Recently, INNOVATION (CSPC Pharmaceutical Group) announced that it will acquire a 100% stock equity in CSPC Baike from WEISHENG Pharmaceutical, CSPC Shanghai, and Enbipu Pharmaceutical for a total consideration of up to RMB 7.6 billion. Among this, 10% will be paid in cash, while the remaining 90% will be paid through the issuance of additional shares. This is the second transfer of innovative drug assets by CSPC Pharmaceutical Group Co., Ltd this year, following Megalith Biopharmaceuticals.
Currently, facing the dual pressure of involution and centralized procurement, the transformation of major local pharmaceutical companies into innovative pharmaceutical companies has become an inevitable trend, with Xinnuowei serving as the innovation carrier for CSPC Pharmaceutical Group Co., Ltd. In addition, several other pharmaceutical companies have recently undergone innovation and transformation through asset integration. Can these operations raise the banner of innovation and upgrading?
Multiple Asset Integrations Mark a New Era for CSPC Pharmaceutical Group Co., Ltd
CSPC Pharmaceutical Group Co., Ltd is an established domestic pharmaceutical company. At its inception, it rapidly became one of the "Four Great Families" of bulk drugs in China with vitamin C and β-lactam antibiotics as its two strategic products. Later, as the API market began to show signs of decline, CSPC Pharmaceutical Group Co., Ltd embarked on an industrial restructuring.
In 1999, CSPC Pharmaceutical Group Co., Ltd acquired the patent for Butylphthalide Soft Capsules, a first-in-class in China, from the Institute of Materia Medica, Chinese Academy of Medical Sciences. After 6 years of R&D, Butylphthalide was officially launched in 2005 (brand name: Enbipu), becoming the first new pharmaceutical chemicals in China for the treatment of ischemic stroke and the third first-in-class in the country. The dividends of Enbipu have continued to this day, making it a super blockbuster with sales of RMB 7 billion.
During this period, innovative products of CSPC Pharmaceutical Group Co., Ltd continued to increase. Besides Enbipu, it also launched multiple innovative drugs such as Mingfule, Duoenyi, Jinlitai, Haiyitan, Duoenda, and Ouyuexin. With the support of these drugs, many products of CSPC Pharmaceutical Group Co., Ltd reached their historical peak in 2020-2021.
However, with the advent of centralized procurement and the expiration of core product patents, CSPC Pharmaceutical Group Co., Ltd urgently needed to formulate effective transformation strategies. INNOVATION, a subsidiary established in 2006, became the carrier of CSPC Pharmaceutical Group's dream of innovative transformation.
INNOVATION's original main business was the production and sales of synthetic caffeine, making it one of the largest chemical synthesis caffeine production bases in the world and a first-tier player in China's health food industry. In 2019, INNOVATION was spun off and listed, becoming the listing platform of CSPC Pharmaceutical Group Co., Ltd on the A-share market.
In 2023, INNOVATION executed a capital increase of RMB 1.871 billion in cash to acquire a 51% stock equity in Megalith Biopharmaceuticals, another subsidiary of CSPC Pharmaceutical Group, thereby achieving control over Megalith Biopharmaceuticals.
Founded in 2019, Megalith Biopharmaceuticals is one of the core assets of CSPC Pharmaceutical Group Co., Ltd in biological innovative drugs. The company has more than 20 research projects under development covering cutting-edge fields such as antibody drugs, ADC drugs, and mRNA vaccines. Among these, two products are in the phase declared for marketing, three are in clinical phases II/III, and five are in clinical phase I.
Currently, the main revenue source of Megalith Biopharmaceuticals is licensing fees. In 2022, the company licensed the overseas rights of its ADC drug SYSA1801 targeting the Claudin18.2 antigen to Elevation Oncology, ear...
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