As an important part of the pharmaceutical industry chain, CRO/CDMO has been highly sought after by capital in recent years because it is on a high-quality track. Wuxi Apptec, Pharmaron Beijing Co., Ltd.* and Tigermed have successively become star "A shares" companies that have listed A shares and Hong Kong stocks, with a total market capitalization of more than 400 billion yuan.

The successful operation of the above-mentioned companies in the capital market has also attracted more and more players to participate in it, mainly in two aspects: on the one hand, the newly established CRO/CDMO company in China in the past two years is still growing at a high speed, including vein creature, Huafang Tianshi, Kangri Baiao, Jianxin Force, Youdao creature, Baiyinuo …... The new companies are dazzling.

On the other hand, small and medium-sized CRO/CDMO companies are coming to the fore with IPO. For example, the crystal cloud organism, which focuses on the development of crystalline drugs, the Sunshine Nuohe, which focuses on the early development and research of imitation drugs, and the Haoyuan organism, which is characterized by molecular blocks and tool compounds. IPO applications have been submitted one after another.

This also leads to a question: if the "cake" of the pharmaceutical industry can not catch up with the growth rate of the people who come to "divide the cake", how can CRO/CDMO keep its own country or even expand its territory? Combing the industry trend, we can find that domestic CRO/CDMO companies can break through from the following directions.

Expand business and improve services

Only by further broadening the industrial chain, can CXO continue to promote the sustained and steady growth of its business performance. "an industry source told the Rubik's Cube. Take CRO enterprises as an example, the main ways for them to become bigger and stronger include setting up their own or merging related CMO and CSO enterprises, opening up R & D, production and sales, establishing services from laboratory services to real-world research and commercial consulting services, and building the service capability of full-process integration. For example, Wuxi Apptec passed the fixed increment code CDMO business not long ago. "

Because innovative drug research and development has the characteristics of high investment, high return, high risk and long cycle, CDMO does not bear the risk of failure in innovative drug research and development, but can share the growth dividend brought by innovative drugs on the market. "generally speaking, when innovative drugs enter the late clinical and commercial stage, innovative drug companies are not inclined to change cGMP product suppliers because of regulatory, cost and supply chain stability considerations," the person added. Therefore, in order to increase customer stickiness, CRO, which is engaged in early development, adding code CDMO business is natural. "

In fact, it is not only CRO that needs to build the service capability of full process integration, but also CDMO. Just recently, Kelliying, a leading CDMO company in China, announced that it plans to invest 30 million yuan to acquire 100% equity in Guanqin Pharmaceutical, a comprehensive CRO company that provides preclinical and clinical services.

According to Kellein, the background of this acquisition is based on the establishment of Tianjin Pharmaceutical Clinical Research Technology Innovation Center (TICCR) in Tianjin in June 2019. The clinical research service is Kellein's "improving the depth and breadth of service to customers and extending the service chain of new drug research and development", that is, to further strengthen the "stickiness" of cooperation between the company and many partners in the field of innovative drug research and development by providing integrated CDMO+CRO services.

Invest in others and be yourself.

"I have found that Wuxi Apptec and Tigermed have become more like investment companies in recent years. "A secondary investor told me. Although the CRO industry has had a particularly large turnover in recent years, some have gone to other CRO, some have gone to Biotech, and it turns out that the big boss behind it is the same person. "

Take Wuxi Apptec as an example, its investment model is a typical VIC (that is, VC+IP+CRO) model, that is, first set up an investment fund, find the investment target, and provide financial support for it, while providing Wuxi Apptec's R & D platform. Hua Medicine and Cornerstone Pharmaceutical are typical examples.

Tigermed also disclosed in its financial report that it provided financial support to start-ups and comprehensive R & D solutions for its ongoing projects through minority investments in innovative biopharmaceutical and medical device start-ups. Past successful strategic acquisitions and investments not only drive its long-term growth, but also have access to emerging technologies, potential customers, and more business opportunities.

Self-revolution, complete transformation

Apart from expanding the business chain and investing in expanding the ecosystem, is there any other way for CRO/CDMO to break through? The latest big move by Bai Oseatu tells the third possibility.

Following the announcement of the merger of Suke and Pharmaceuticals in August, Bai Oseatu recently announced the completion of 970 million yuan of D+ round financing. This huge amount of money will mainly be used to support the rapid implementation of the "thousands of mice" program, promote its cooperation with many pharmaceutical R & D enterprises at home and abroad, and speed up the process of innovative drug research and development.

After 12 years of development, Biosaitu is constantly running for transformation, and has completed two transformations and upgrades, from the original gene targeting supplier to pharmacological and pharmacological CRO service provider, and then to the transformation and development into a biotechnology company. Will it become a trend of CRO/CDMO transformation from outsourced service companies to innovation-driven Biotech? The Rubik's Cube has also consulted relevant people on this topic.

Some interviewees believe that not all CRO/CDMO have the ability and qualification to transform Biotech, and it is rare in the industry to have not only the ability to establish an early "drug sieve", but also a professional antibody drug research and development team.

However, since Bai Oseatu has made it clear that it wants to transform into Biotech, it is bound to have a certain impact on its traditional CRO business. Shen Yuelei, founder and CEO of Bishop, also said in an interview with the media, "the company's CRO service will also be retained, keeping its own gene editing and animal model team serving old customers, but will not deliberately expand." Thus it can be seen that if CRO/CDMO has the ambition to be a 'new drug', it should go all out like a strong man with a broken wrist.

Through the vertical expansion of the business chain, or horizontal investment to expand the ecological circle, or the complete transformation of self-revolution, the CRO/CDMO industry breakthrough is in progress.