China to Abolish 'Two Designations' Review by Year-End; Guangzhou Baiyunshan Successfully Raises RMB 8.3 Billion in Private Placement
Today's Highlights:
MOHRSS: All regions to fully abolish qualification reviews for designated medical institutions and pharmacies before the end of the year
Magic Leap Raises Another $827 Million Before Product Launch
Guangyao BaiyunShan$8.3 Billion Private Placement Successfully Completed; Fund Under Jack Ma’s Umbrella Subscribes $500 Million
In 2014, the total health-related consumer spending on Alibaba’s retail platforms reached RMB 65.02 billion.
Medtronic Acquires Lazarus Effect for $100 Million
Zhangshang Pharmacy Completes Tens of Millions of Dollars in Series A Financing
MOHRSS: All localities to fully abolish qualification reviews for designated medical institutions and pharmacies before the end of the year
Recently, the Ministry of Human Resources and Social Security issued the “Guiding Opinions on Improving the Agreement-Based Management of Designated Medical Institutions and Pharmacies under Basic Medical Insurance,” specifying that by the end of 2015, all localities must fully abolish the qualification review process for designated institutions implemented by social insurance administrative departments, replacing it with direct agreement-based management.
“Designated Entity Qualification Review” refers to the “Qualification Review for Designated Medical Institutions under Basic Medical Insurance” and the “Qualification Review for Designated Retail Pharmacies under Basic Medical Insurance.” Following the implementation of agreement-based management, the process for medical and pharmaceutical institutions to become designated entities is as follows:
First, the human resources and social security departments of the pooling regions shall promptly disclose the conditions that medical institutions must meet, and formulate rules and procedures for evaluating such institutions. All types of medical institutions may apply to the handling agencies in their respective pooling regions on a voluntary basis, submitting truthful materials regarding their scope of services, service capacity, service quality, distinctive features, and pricing, while cooperating with the handling agencies during the evaluation process.
Then, the handling agencies should prioritize soliciting opinions from insured individuals, experts, industry associations, and other stakeholders when conducting evaluations, explore the use of third-party assessments, and ensure that the procedures are open and transparent.
Finally, the handling agencies shall negotiate with healthcare providers based on the evaluation results and sign service agreements. Healthcare providers are encouraged to compete in terms of quality, price, and costs.
Furthermore, the “Opinions” reemphasize the importance of controlling healthcare insurance expenditures, stating that agreements should align with policy and management requirements related to budget management, payment method reforms, pharmaceutical price reforms, supervision of medical practices under healthcare insurance, and cross-regional medical expense settlement. The document further refines content such as global budget control indicators, specific payment methods, payment standards, cost review and control, management of drugs, diagnostic and therapeutic items, and medical materials, supervisory inspections, management of healthcare-insurance-designated physicians, and data transmission standards, with timely supplements and improvements made in accordance with evolving healthcare insurance policies and management needs.
Magic Leap Raises Another $827 Million Before Product Launch
According to Forbes, virtual reality startup Magic Leap has secured $827 million in Series C financing, valuing the company at $3.7 billion. The tech news site Re/code reported that Alibaba Group also participated in this round of funding, investing $200 million.
The previous round of financing took place in October 2014, when Magic Leap secured $542 million in Series B funding led by Google, with participation from Qualcomm Ventures, Kleiner Perkins, and the private equity firm Kohlberg Kravis Roberts (KKR). With this latest round, Magic Leap has raised a cumulative total of $1.4 billion, becoming one of the most highly valued startup companies globally.
However, Magic Leap has yet to release any products, and even its R&D technologies remain under wraps. It was not until October of this year that Magic Leap released its first video. The video showcased the technology Magic Leap is developing, which enables users to see holographic images in the real world and interact with virtual objects within them without wearing special glasses. Magic Leap also explicitly stated that its augmented reality technology differs from the technology used in Facebook’s VR Oculus Rift headset. As for what exactly constitutes this “world-shocking” product, we will have to wait and see.
GPHL Baiyunshan Successfully Completes RMB 8.3 Billion Private Placement; Alibaba-Linked Fund Subscribes RMB 500 Million
On December 9, Guangzhou Baiyunshan Pharmaceutical Holdings Co., Ltd. (“Baiyunshan”), a listed company under Guangzhou Pharmaceutical Group, announced that its application for a non-public offering of shares worth RMB 8.3 billion had been approved by the China Securities Regulatory Commission (CSRC). This marks Baiyunshan’s first refinancing since its listing in 1993 and represents the largest private placement financing ever undertaken by an A-share pharmaceutical company.
The private placement, which spanned one year, was priced at RMB 23.56 per share. The total funds raised did not exceed RMB 8.3 billion, with Yunfeng Capital, affiliated with Jack Ma, subscribing to RMB 500 million worth of shares.
Baiyunshan stated that the RMB 8.3 billion will be primarily used to develop its four major industrial segments during the “13th Five-Year Plan” period: Great Southern Medicine, Great Health, Great Commerce, and Great Healthcare. Specifically, RMB 2.5 billion is allocated to the “Great Southern Medicine” segment, comprising RMB 1.5 billion for the construction of an R&D platform and RMB 1.0 billion for Phase I of the production base. RMB 2.4 billion will be invested in the “Great Health” segment to support channel development and brand building for Guangzhou Wanglaoji Great Health Industry Co., Ltd., aiming to increase the market share of Wanglaoji’s health products. For the “Great Commerce” segment, RMB 1.0 billion is planned to be raised to establish an extended modern pharmaceutical logistics service system, providing hospitals with integrated smart logistics management solutions for pharmaceuticals. Additionally, the company intends to use RMB 2.2 billion of the raised funds to supplement working capital, mainly to bolster operational liquidity and strengthen financial capacity in support of external M&A-driven expansion, particularly in laying out and developing new business segments. The remaining RMB 200 million will be used for information technology infrastructure development.
Guangzhou Baiyunshan Pharmaceutical Holdings Co., Ltd. stated that during the 13th Five-Year Plan period, it would accelerate its transformation and upgrading by making substantial efforts in two key areas: “capitalization” and “going global,” thereby shifting its focus from operational management to capital management. Meanwhile, leveraging the policy opportunities presented by the Belt and Road Initiative, the company aims to establish Wang Lao Ji as China’s “Coca-Cola” and expand into international markets.
In 2014, the total health-related consumer spending on Alibaba’s retail platforms reached RMB 65.02 billion.
On December 10, Alibaba Research Institute and AliHealth jointly released the “Alibaba Retail Platform Health Consumption Report” for the first time.
Data shows that in 2014, the total health-related consumption on Alibaba’s retail platforms (Taobao and Tmall), including pharmaceutical products, health products, and medical and healthcare services, reached RMB 65.02 billion, a year-on-year increase of 62.5%. Meanwhile, the number of health consumers grew from 68.2 million in 2013 to 111 million in 2014, representing a 63.5% increase.
On Alibaba’s retail platform, the primary consumers of health-related products are individuals aged 29 to 35, accounting for over 30.7% of the total. Guangdong, Zhejiang, and Jiangsu provinces lead in total health consumption. Beijing ranks first nationwide in mask spending, representing more than one-sixth of the national total, while Heilongjiang Province has witnessed the fastest growth in mask consumption, with an increase exceeding 200%.
The report suggests that Chinese consumers’ health spending mindset is shifting from “treating illness” to “preventing disease.” In 2014, online purchases of medical checkups in China rose by 31.3% compared with 2013. The top three regions for checkup spending were Shanghai, Beijing, and Guangdong. Moreover, consumer spending on medical and health services increased by 189% in 2014, with health care services up 205% and health and accident insurance up 432%.
Medtronic Acquires Lazarus Effect for $100 Million
Recently, Medtronic announced that it has acquired Lazarus Effect for $100 million in an all-cash transaction. Headquartered in California, USA, Lazarus Effect specializes in embolus capture and removal products for the treatment of acute ischemic stroke.
Medtronic stated that Lazarus Effect’s “stent retriever” technology complements Medtronic’s portfolio for ischemic stroke and will further enhance the capability of Medtronic’s Neurovascular business to deliver next-generation technologies.
The “mesh cover” technology is designed to address clinical needs through a novel nitinol “mesh cover” that attaches to the exterior of the thrombectomy stent, enveloping both the stent and the thrombus like “candy wrapper” during thrombus removal.
Among the 695,000 patients with acute ischemic stroke in the United States, approximately 240,000 are eligible for treatment using thrombectomy stents such as Medtronic’s Solitaire. The “stent retriever assist device” is an adjunctive device used in stent retriever thrombectomy procedures and received CE marking from the European Union in November 2014. Following this acquisition, Lazarus Effect’s product portfolio will become part of the Neurovascular division within Medtronic’s Restorative Therapies Group.
Zhangshang Pharmacy Completes Tens of Millions of US Dollars in Series A Financing
Recently, Wang Junhai, founder of Zhangshang Yaodian (Pocket Pharmacy), revealed that the company had recently completed a Series A financing round worth tens of millions of U.S. dollars, and its operating cash flow is relatively abundant.
Wang Junhai stated, “The reason for choosing U.S. dollar investors is that, amid the current capital winter, they are more willing to support the company’s long-term commitment to its business philosophy of promoting rational medication use among Chinese users.”
Earlier this year, Yibai Pharmaceutical invested RMB 20 million to jointly build a pharmaceutical O2O platform with Zhangshang Yaodian (Pocket Pharmacy). A key feature of Pocket Pharmacy is its provision of online pharmaceutical care services. Since the launch of its pharmacist consultation service in September, it has served hundreds of thousands of users, and this service remains free of charge to users at present.
Wang Junhai stated that the Palm Pharmacy will launch a “Nearby Purchase” service next year. In the future, users will be able to access one-stop pharmaceutical services through the Palm Pharmacy, including medication search, consultation, purchase, pickup, and medication management. Furthermore, the future development of Palm Pharmacy will focus on data aggregation to enhance user experience.