reelpennbattle3| What are the must-answer questions for innovative pharmaceutical companies to "go out to sea"?

Zhang Min

With the increase of cases of innovative drugs "going out to sea"Reelpennbattle3Its model is also evolving.

Recently, Hengrui Pharmaceutical announced that it will license the GLP-1 product portfolio with independent intellectual property rights to Hercules Company of the United States for a fee.

At present, most innovative pharmaceutical companies adopt the mode of "borrowing ships to go to sea", that is, to expand the market with the help of the resource advantages of partners. Hengrui Pharmaceutical has chosen the "joint venture" mode, that is, in addition to obtaining the license fee for the GLP-1 product portfolio from Hercules, the company will also obtain Hercules 19.Reelpennbattle3.9% equity. Under this model, Hengrui Pharmaceutical will participate in Hercules's decision-making through shareholding voting rights.Reelpennbattle3If Hercules achieves income in the future, in addition to the income at the product level of the licensing agreement, Hengrui Pharmaceutical can also participate in the profit distribution of Hercules to shareholders.

At present, "going out to sea" has become an important way for innovative pharmaceutical companies to open up the market and get higher returns. The author believes that enterprises need to choose the mode of "going out to sea" according to their own resource endowments, and before "going out to sea", innovative pharmaceutical companies should evaluate three major elements, namely, international development experience, financial strength and product technology level.

First of all, for Chinese innovative pharmaceutical companies in the early stage of development, "going out to sea" will not be smooth all the way, and even face multi-dimensional challenges such as legal supervision, clinical development and design, market expansion and so on. Only teams with rich international experience can take on the responsibility of communicating with local regulators and speed up the local registration, listing and commercialization of products. Innovative pharmaceutical companies should consider their own international ability, team-building ability and so on, and choose the appropriate way of "going out to sea".

Secondly, innovative drug research and development requires a long period and high investment, so "going out to sea" needs to consider financial strength. Under the "ship out to sea" mode, the partner is responsible for conducting clinical trials and market sales in overseas markets, while Chinese innovative pharmaceutical companies can receive an one-time down payment, subsequent milestone payment and sales share. Through "borrowing ships to go to sea", enterprises can obtain financial support to promote drug research and development and daily operations.

Under the mode of "joint going out to sea", Chinese innovative pharmaceutical companies and overseas pharmaceutical companies jointly develop innovative drug products, make joint decisions and share costs, which also requires enterprises to have the resources and ability to expand overseas markets, as well as considerable financial strength. Take Hengrui Pharmaceutical, which chose "United to go to sea" as an example, the company has laid out international development for many years, and its monetary capital in the first quarter of this year was 21.3 billion yuan, ranking second among A-share pharmaceutical and biological listed companies.

Finally, from the perspective of product technology, innovative pharmaceutical companies need to evaluate whether the technological level of drugs in research has a differentiated competitive advantage, and at the same time, whether the R & D progress is in a leading position. If the competition in the industry is fierce and the R & D progress is lagging behind, the future commercialization space of the product will be greatly reduced.

Domestic pharmaceutical companies need to make detailed planning and full preparations for "going out to sea". In the future, the mode of "going out to sea" of Chinese innovative drugs will continue to change. It is believed that after accumulating rich international experience, Chinese innovative pharmaceutical companies will have the ability to independently face risks and challenges in overseas markets, thus opening a new model of "going out to sea independently".