New changes in medicine: pharma to the left, commercialization platform to the right

Which is more important, research and development or commercialization capability? Three years ago, most people would have answered, without thinking, research and development. But now the answer is changing.

As the commercialization of most biotech companies fell short of expectations, it became clear that commercialization was just as important to pharmaceutical companies, perhaps even more important than R&D.

Strong commercialisation means that it is possible to "monetise" drugs. In the early days, some companies may not have outstanding pipelines, but over time, because of their superior commercialization capabilities, they may gather more and more pipelines and make the leap.

It is in this context, China's biopharmaceutical, Hengrui Pharmaceutical and other enterprises with commercialization capabilities, began to attract market attention.

At the same time, people found that in addition to the traditional pharmaceutical companies, the pharmaceutical market also has a class of companies can not be ignored:

Third party commercialization platform.

This kind of platform enterprises with strong commercialization ability are also taking advantage of their own advantages and constantly racing to circle the land, becoming an important pole in the field of medicine.

A new situation is brewing.

01
Let the value of quality medicine be seen

Pharmaceutical industry chain is long and complex, based on the goal of maximizing efficiency, the emergence of different division of labor enterprises.

This is where the CXO industry chain comes in. From molecular discovery, to human clinical, to back-end commercialization, pharmaceutical research and development has a clear division of labor, and there are many strong players emerging.

As far as industry trends are concerned, the pursuit of efficiency will not change. Therefore, each link head enterprise, with their own advantages continue to accumulate, will become more and more indispensable.

As mentioned above, the value of third-party commercialization platforms in the industrial chain is self-evident.

Different from traditional commercial companies that simply pursue the ability to distribute goods, third-party commercialization platforms pay more attention to brand operation while building channel capacity:

In other words, it will comprehensively shape consumers' or patients' cognition of pharmaceutical brands and products, and finally push high-quality pharmaceutical products to target groups.

More simply, the difference between the two is:

The core ability of traditional commercial companies is channel shaping, so that people who want to buy can buy;

The core ability of the third-party commercialization platform is brand + channel shaping. First of all, it needs to let people who don't know know it, and let those who don't want to buy it want to buy it, and finally let all those who want to buy it get it.

In contrast, the latter's value to pharmaceutical companies is undoubtedly more prominent. The former is the icing on the cake, magnifying the original brand recognition, drug value; And the latter in the role of icing on the cake at the same time, but also can help:

In a competitive market, let the value of quality pharmaceutical products be seen.

In what is known as the "calcium supplement" market, such a story has been played out, with the protagonist, Diqiao, known to mothers today.

For a long time, the calcium market has many similar products, fierce competition, new products to stand out from the crowd. In the initial period when it was introduced by Baiyang Pharmaceutical, the sales revenue scale of DiQiao was less than 100 million yuan.

But soon, Baiyang medicine tore a hole.

Change starts with differentiated branding. In the calcium supplement market with severe homogenous competition, Baiyang Pharmaceutical did not choose a direct confrontation, but based on the category insight, created a new category for DiQiao among the middle-aged and elderly calcium supplement products, and DiQiao became the synonym of maternal and infant calcium supplement brand, with the brand leading category.

With the change of external environment and the trend of consumption upgrading, Dicqiao upgraded its brand. Baiyang Pharmaceutical built Dicqiao into a leading brand of imported calcium according to consumers' different demands for domestic and imported calcium supplements, avoiding the homogeneous competition with rival products and becoming an irreplaceable existence.

Based on the differentiated brand positioning, the appropriate marketing strategy to assist.

Baiyang Pharmaceutical uses digital marketing to accurately release market resources, shaping and deepening the brand image of DiQiao. In addition, with the cooperation of the brand operation team, it realizes that all the people who want to buy can buy it in new channels such as hospital terminals, retail terminals and e-commerce.

Today's DicKat has already become a blockbuster product with annual sales of more than 1 billion yuan, and is expected to break the 2 billion yuan mark in the future.

In the case of DiQiao, Baiyang Pharmaceutical's professional ability as a third-party commercialization platform has been incisively and vividly reflected, which can be summarized into three aspects: category insight and brand building ability, digital marketing ability, and professional team collaboration ability.

A single thread is not a line, a single tree is not a forest. Any of the above capabilities alone can hardly constitute a commercial moat. Only by completely breaking through the three chains can categories be transformed into brands, occupying the minds of consumers and bringing competition barriers.

Traditional medicine commercial enterprises mainly earn price difference, the profit space is relatively limited; The revenue of the third-party commercial platform is mainly brand service fee and sales milestone, which has high profitability.

According to the latest financial statement released by Baiyang Pharmaceutical, in 2022, the revenue of the company's core business brand operation business is 4.843 billion yuan (based on the two-cent reduction system), the gross profit is 1.707 billion yuan, and the gross profit rate is 46.12%. Thanks to the outstanding performance of brand operation business, the net profit of Baiyang Pharmaceutical in 2022 reached 502 million yuan, with a year-on-year growth of 19.08%.

In the past, domestic pharmaceutical companies focused on generic drug business and started innovation late, so the demand for third-party commercialization platforms was not obvious.

Nowadays, with the innovation and reform of the pharmaceutical industry increasingly entering the deep water zone, the division of labor of the industry is increasingly clear, and the position of the third-party commercialization platform with the ability of brand operation is increasingly prominent.

02
On the commercial platform before the platform

The truly professional commercialization capability is different from the "crowd tactics" of some traditional pharmaceutical companies, which rely on space to exchange market share.

First of all, we should be able to gain insight into clinical application scenarios and select products that can truly optimize medical scenarios. Secondly, knowing how to allocate resources according to the product lifecycle, market map, so as to bring the product to market, improve clinical treatment options, and benefit patients; Most importantly, of course, you need professionals who really understand how business works to unlock value.

For overseas big pharmaceutical companies, the reason why they can introduce many pipelines lies in the mature commercialization ability.

At present, no matter the new generation of pharmaceutical companies, or most of the traditional pharmaceutical companies, it is difficult to say that they have professional commercialization ability.

Sure, they can catch up, but building and perfecting capabilities is not a matter of time.

In contrast, third-party commercial platforms have obvious professional advantages, and the creation of successful brands has created their ability to survive.

While most innovative pharmaceutical companies are still struggling with how to expand their departments, the head third-party commercialization platform has already achieved cross-field combat capabilities. Take Baiyang Pharmaceutical as an example. At present, the company has formed a matrix layout in four tracks, including OTC health, prescription drugs, oncology and medical devices, and more than ten disease fields, such as bone health, digestion, liver disease, urology and cancer.

More importantly, the formation of commercialization ability is a process of continuous accumulation of experience, the advantage of the leader will become more and more obvious, the strong will always be strong.

This is where the biggest certainty of the first third-party commercialization platforms lies: their ability to continually "broaden" and "deepen" their businesses based on replicable capabilities.

Do wide refers to the layout of multiple areas. The measure of success, of course, is not the size of the layout, but the ability to play the hard game: the ability to succeed in multiple areas.

It will not be easy, but the performance of the leading companies tells us that it can be achieved.

Baiyang Pharmaceutical mentioned above has a number of successful cases in the prescription drug market in addition to its big health and OTC business, among which the most representative case is the series of products of "Mote", a prescription drug for indigestion.

At the beginning of the cooperation, Mote series products also faced the same dilemma as DiKat, whose value could not be fully seen by the market, resulting in low brand influence and sales.

Baiyang Pharmaceutical has once again adapted to the case, starting with product positioning and academic promotion, to "replicate" its professional brand operation.

Category insight level, based on the efficacy of special products, Baiyang Pharmaceutical takes the lead in the industry to further subdivide "dyspepsia" into physical dyspepsia and chemical dyspepsia.

It is widely known that mobutyl is a kind of physical dyspepsia, which can solve the problem of insufficient gastric motility, while motin is a kind of chemical dyspepsia, which can solve the dyspepsia caused by insufficient secretion of digestive enzymes.

As a prescription drug, branding is also extremely important. The so-called "brand" refers to the occupation of the mind of secrete in the physician and patient community. In this regard, Baiyang Pharmaceutical has successfully made Mote enter many authoritative medical guidelines and consensus through the accumulation of medical evidence, and gained the recognition of doctors in clinical practice through targeted academic education.

Finally, through the strong combat ability of its marketing team, Baiyang Pharmaceutical completed the product promotion in and out of the hospital, and successfully dominated the domestic chemical dyspepsia segment.

Petec's success also demonstrates the company's ability to incubate prescription drug brands. In addition, Biyang is also trying to broaden its scope and has also achieved success in the oncology drug market:

In 2022, the revenue of its oncology products cooperated with Roche reached 842 million yuan (calculated by the reduction-two-ticket system), up 50.73% year-on-year; The commercialization of paclitaxel micellar in cooperation with Shanghai Yizhong helped the product achieve profitability in the first full year of commercialization, and continued to increase in volume.

Multi - matrix success, once again proved that Baiyang medicine "spicy".

In fact, our success in OTC, prescription, and oncology is a testament to our value and ability as a third-party commercialization platform. In this long process and high demand commercialization competition, we need to do every link to the extreme. The whole is strong, because every point is a little stronger than others.

At the same time, Baiyang Medicine is also trying to do deep.

The so-called deep, means in the same subdivision field continuously deep. For example, Biyang Pharmaceutical in the field of urinary products, thanks to the success of Harle, makes Astellas cooperate with it in depth in 2021:

Astellas disbanded its own urological sales force and transferred the entire product line to Biyang Pharmaceutical operations. Harle's operation channel has been expanded from retail to omni-channel, and two new cooperative products including Weixikang and Betanli have been added.

Baiyang Pharmaceutical shows us that, driven by the word-of-mouth effect and head effect in the brand operation industry, the third-party commercialization platform can continue to deepen in the field of differentiated innovative drugs and medical devices, and its advantages are growing like a snowball.

03
The world of medicine is changing

Although pharmaceutical companies hope to become the top of the domestic pharmaceutical industry, it is not clear who will emerge from the top. For now, at least, it's not just pharmaceutical companies that are poised to take the top spot, but also third-party commercialization platforms.

The core is that third-party commercialization platforms are extending the industrial chain layout.

Pharmaceutical companies hope to strengthen the thickness of their pipelines and promote further industry innovation through research and development and introduction of two legs. To some extent, third-party commercialization platforms also aim at this:

It not only strengthens the cooperation of pipeline, but also goes into the front line of innovation.

Baiyang Pharmaceutical is trying to establish its position in the pharmaceutical market.

In 2022, Baiyang Pharma calls it a breakthrough year for innovation. Indeed, based on its proven brand operation and commercialization strength, it has established partnerships with many multinational pharmaceutical companies, including Roche, Astrazeneca and Novartis China.

At the same time, Biyang is also committed to fostering original innovations that can truly optimize the medical scene:

Through the form of equity investment, we establish joint ventures with national scientific research institutions to jointly promote the transformation of scientific research achievements, focusing on the three tracks of innovative medicine, high-end medical equipment and technology transformation platform.

It should be noted that the above playing method of Baiyang Pharmaceutical is different from the traditional "introduction" mode, but chooses to cooperate with the "national team", participate in innovation, and promote the transformation of scientific research achievements with practical actions.

The source of innovation must be based on a lot of basic research, and a lot of basic, exploratory research is done by the national team. However, when the research and development results have reached the stage of clinical verification and put into the market, enterprises with a better understanding of the market are needed to undertake.

In other words, the transformation of achievements from basic research to new drugs/devices cannot be achieved without the sustained support of policies and capital, as well as the long-term struggle of enterprises.

Although China's overall level of pharmaceutical innovation still lags behind the world's leading level, the good thing is that the policy level has been vigorously supporting the transformation of scientific research results to solve the problem of "bottleneck" in the fields of drugs, medical devices and vaccines. At the corporate level, companies such as Baiyang Pharmaceutical are also leading the rush into original innovation.

A single spark can start a prairie fire. In the past few years, with the joint efforts of policies, enterprises and capital, China's pharmaceutical industry has made remarkable progress, and the pattern is constantly changing.

Predictably, the industry will continue to evolve and change will occur. Let's see who comes out on top.