The impact of the new version of GMP reform on the merger and reorganization of the industry gradually emerged

With the profound changes in industry standards and industry policies such as the new version of GMP, the process of mergers and reorganizations in the pharmaceutical industry has accelerated significantly. According to incomplete statistics, from the beginning of 2014 to the present, 16 listed pharmaceutical companies in the pharmaceutical industry have experienced a phenomenon of “concentrated suspension” and several companies have announced major reorganization issues.

16 listed pharmaceutical companies “concentrated suspension”

Some studies have pointed out that major changes in industrial policies and standards such as the new version of GMP reforms, changes in bidding policies, and the liberalization of private hospital policies are spurring a new wave of mergers and acquisitions with the aim of product (technical) mergers and acquisitions in the pharmaceutical industry. 16 listed pharmaceutical companies have experienced the phenomenon of suspension of major events, which is generally considered by the industry to be related to the industry's upcoming large-scale reorganization mergers and acquisitions.

As of March 19, many listed pharmaceutical companies such as China Resources Wandong, Qianshan Pharmaceutical Machinery, Tiger Pharmaceuticals, Connbay Pharmaceuticals, Fengyuan Pharmaceutical, Yuexiu Medical, and Haixiang Pharmaceuticals were still in the suspension phase. At the beginning of March, there were 14 pharmaceutical companies temporarily suspended trading. Take China Resources Wandong as an example, the company suspended its license because the actual controller China Resources General Corporation planned to strategically withdraw its medical device business, and Haixiang Pharmaceuticals had to start a self-help reorganization due to the sluggish cycle of APIs.

In addition, the impact of the new GMP reform on mergers and acquisitions in the industry is also emerging. Connehbe had to postpone the resumption of trading due to the impact of the new GMP reform on the target company. According to the information previously disclosed by Connbay, the major asset restructuring plan of the company was the purchase of equity assets of a domestic pharmaceutical company.

Changes in Policy Criteria Impact on Industry Expectations In the eyes of some companies in the industry, the introduction of major industry policies and the improvement of admission standards are changing the industry’s previous expectations of the pharmaceutical industry. This kind of expected change is the objective reason why the listed pharmaceutical companies currently have major problems.

As of December 31, 2013, there were a total of 1,319 aseptic pharmaceutical manufacturing companies in the country, and 60.3% had passed the new GMP certification. In other words, nearly 40% of aseptic drug manufacturers have not yet passed GMP certification, and in 2014 they have been put into production.

Other dosage forms of enterprises and production workshops are also required to meet the new GMP requirements by December 31, 2015. The results of this policy change show that the country intends to increase the concentration of aseptic drugs, and the increase in concentration will inevitably be conducive to the survival of high-quality enterprises, and the merger and reorganization opportunities among them are expected to show up at the end of 2014. .

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