红杉中国抄底拜复乐，指派辉瑞金肖东复兴老牌抗生素？

On February 2nd, the pharmaceutical industry was stirred up by an apparently "abnormal" acquisition case.

Sequoia China, a top - tier VC well - known for investing in "high - end and cutting - edge" innovative drugs and frontier biotech, suddenly changed its course and announced the completion of a global acquisition of the business related to moxifloxacin (trade name: Avelox), a classic antibiotic.

To take over this huge global asset, Sequoia simultaneously established a new biopharmaceutical platform, Hangzhou Shanze Biopharmaceutical Co., Ltd. (hereinafter referred to as "Shanze Biotech") and its parent company, Ascenda Pte. Ltd.

The subject of this transaction is a once "blockbuster" drug under the German pharmaceutical giant Bayer, a broad - spectrum antibiotic that treats over 240 million patients globally each year. According to the agreement, Shanze Biotech acquired the core assets of Avelox, including drug registration certificates, intellectual property rights, and business contracts worldwide, making it a global pharmaceutical asset 100% controlled by an investment institution.

When a VC starts doing what a PE does and acquires a mature drug that has seen better days, it's obviously not just a simple financial investment behind this. Sequoia acted quickly and precisely, inviting Jin Xiaodong, a heavy - weight figure, to steer this new platform.

This senior executive, with a resume spanning multiple multinational pharmaceutical companies and local biopharmaceutical enterprises, last worked at Pfizer China, holding core positions such as the head of the vaccine and basic business and the general manager of the strategic alliance department.

A top - tier VC, a classic old drug whose patent has expired, and an experienced MNC veteran. The combination of these three elements forms a business story full of imagination and challenges.

Is Sequoia China "bottom - fishing" a cash - cow business divested by a giant, or is it playing a much bigger game? Can Avelox, known as the "miracle drug for respiratory diseases", have a "second spring" in the hands of Jin Xiaodong?

01 The "Abnormal" Sequoia and the "Declining" Aristocrat

Sequoia China's investment portfolio has always been synonymous with innovation and the frontier. Since it systematically entered the healthcare field in 2006, its investment portfolio has been star - studded, including well - known companies like Betta Pharmaceuticals, Innovent Biologics, Zai Lab, and BGI Genomics.

Its investment logic clearly points to innovative companies with core technology platforms that can address unmet clinical needs, especially favoring future - oriented fields such as gene therapy, cell therapy, and AI - powered healthcare.

However, this acquisition of moxifloxacin seems to be a sudden change in style.

Moxifloxacin, developed by Bayer, is a representative of the fourth - generation quinolone antibacterial drugs. Since its launch, it has established a solid academic status and market reputation in areas such as respiratory tract infections and skin and soft - tissue infections, thanks to its broad - spectrum and high - efficiency characteristics.

At its peak, it was one of Bayer's cash - cows. In 2012, its global sales were close to $1.2 billion, making it a true "blockbuster" drug.

But all heroes have their twilight years. As the core patent expired and global generic drug market competition intensified, this former "aristocrat" began to face growth bottlenecks. Data shows that its global sales had dropped to about $900 million in 2016, and by 2019, the global sales of Bayer's moxifloxacin products had further declined to about $420 million.

In the Chinese market, although Avelox still holds a leading position, its market share is constantly being eroded by domestic generic drug manufacturers. According to Yaodu data, in 2022, Bayer's market share in the domestic moxifloxacin market was about 34.75%, while local manufacturers such as Aike Pharmaceutical and Hongri Pharmaceutical together accounted for more than 25% of the share.

For a multinational giant like Bayer, when a product's growth curve flattens or declines and requires a large amount of resources to maintain its market share, divesting it and focusing resources on more promising innovative drug pipelines becomes a rational strategic choice.

This is exactly where Sequoia's "abnormality" lies. While others see a "declining aristocrat", Sequoia may see an undervalued "value depression".

VCs usually pursue high - risk, high - return opportunities from 0 to 1 and from 1 to 10. This time, Sequoia chose an asset that has declined from 100 to 80 but still has a solid foundation.

Behind this is a typical PE approach: optimizing and integrating mature businesses through capital operations to obtain stable cash flows and value appreciation.

02 The PE - like Calculation of a VC: "Cash - Cow" + "Incubator"

Sequoia China clearly isn't satisfied with just being a "rent - collector". The transaction is expected to be in the range of 160 million to 260 million euros, with Shanghai Pufa Bank providing financing support for Sequoia, which itself has the characteristics of a leveraged buyout. Its real goal is to use moxifloxacin as a strategic fulcrum to leverage a new biopharmaceutical platform.

According to official disclosures, Shanze Biotech will adopt a unique business model of "operating mature products + introducing innovative R & D projects". This combination can be broken down into two levels.

The first level uses the mature product moxifloxacin as a "cash - cow" and "infrastructure".

Although its sales have declined, moxifloxacin is still a large - scale product. In the Chinese market alone, the total sales volume in 2022 reached as high as 1.881 billion yuan. This means that from the very first day of its establishment, Shanze Biotech doesn't have to worry about survival and cash flow. This stable income will be the "ballast stone" for the company's operation and future development.

More importantly, moxifloxacin's global business network is an invaluable intangible asset. It has mature sales channels, a complete supply - chain system, and experience in drug registration and market access in more than 100 countries and regions around the world.

This complete commercial infrastructure is a dream come true for any biopharmaceutical company aiming for global expansion. Through this acquisition, Sequoia has directly paved a "highway" for Shanze Biotech to go global.

The second level uses Shanze Biotech as a platform to continuously introduce innovative pipelines and build an "incubator".

This is the "winning move" in Sequoia's big game. Shanze Biotech's mission is far more than just operating moxifloxacin well. Its long - term goal is to use the stable cash flow and commercial platform brought by moxifloxacin to continuously search for and introduce late - stage clinical innovative products from around the world.

The ingenuity of this model lies in that it solves two major pain points faced by many innovative pharmaceutical companies.

One is the financial anxiety. The R & D of innovative drugs has a long cycle, large investment, and high risks. Many Biotech companies are in a continuous "cash - burning" state before their products are launched. However, Shanze Biotech has the "cash - cow" business to provide funds, allowing it to conduct R & D and introductions more calmly.

The other is the commercialization short - board. Many Biotech companies good at R & D often lack the experience and resources to build an efficient commercialization team and network after their products are approved for marketing. However, Shanze Biotech is born with a global commercial platform, which can help the introduced innovative products quickly realize value transformation.

Through this "dual - engine" model, Sequoia is trying to create a new species: it has the stability and commercialization ability of a mature pharmaceutical company, as well as the vitality and growth potential of an innovative pharmaceutical company.

If successful, Shanze Biotech will become an efficient "asset incubator", continuously loading promising innovative drug pipelines into the platform and using the existing system to promote them to the global market.

Of course, this model isn't an original idea of Sequoia. Internationally, some large PE funds have already started to integrate pharmaceutical assets and build leading companies in specialized fields through a similar "Buy - and - Build" strategy. But for a VC known for growth - oriented investments, this is undoubtedly a bold cross - border move.

However, the perfect strategic vision requires a top - notch operator to execute. That person is Jin Xiaodong.

03 An Experienced Veteran Steps In: Can Pfizer's Experience Be Replicated?

Selecting Jin Xiaodong to lead Shanze Biotech is a crucial step in Sequoia's game and best reflects its careful consideration. Jin Xiaodong's nearly 30 - year career perfectly matches Shanze Biotech's "dual - engine" strategic needs.

Looking through his resume, two main lines can be clearly seen.

One is his proficiency in the commercial operation of mature products. Jin Xiaodong has held core management positions in multiple MNCs such as Novartis, Abbott, and Sanofi.

In his most recent experience at Pfizer, he served as the head of the vaccine and basic business. Pfizer's vaccine business, especially the 13 - valent pneumococcal conjugate vaccine (Prevnar 13), is a typical "mature blockbuster product".

How to maintain and increase the market share of such products in a highly competitive market, promote market access, and build a patient - service ecosystem is exactly Jin Xiaodong's specialty.

The challenges of managing Avelox are highly similar. In the face of the impact of generic drugs, through refined operations, academic promotions, and brand maintenance, it is necessary to stabilize and expand the market and maximize its commercial value. The experience Jin Xiaodong accumulated at Pfizer can be almost seamlessly applied to Shanze Biotech's "first growth curve".

The other is his rich experience in business development and strategic cooperation. In the later stage at Pfizer, Jin Xiaodong was transferred to be the general manager of the strategic alliance department.

The core work of this position is to seek external cooperation, conduct asset introductions, and form strategic alliances. This exactly corresponds to Shanze Biotech's second major task of "continuously introducing late - stage clinical innovative products".

A successful BD person needs sharp industry insight, strong project - evaluation ability, and excellent negotiation skills. Jin Xiaodong not only has a global perspective from working at an MNC like Pfizer but also once held an important position at the local innovative pharmaceutical company InnoCare, deeply understanding the domestic and international pharmaceutical innovation ecosystems.

This "combination of Chinese and Western" background makes him an ideal candidate to represent Shanze Biotech in searching for, screening, and introducing high - quality innovative assets globally.

It can be said that Jin Xiaodong is the key person selected by Sequoia, capable of both "preserving the existing" and "exploring new frontiers". His task is not only to make this old - fashioned antibiotic Avelox "bloom new flowers" but also to continuously introduce fresh blood for the new platform of Shanze Biotech and build a product portfolio with long - term competitiveness.

04 The Three Hurdles for Sequoia's "Innovative Drugs"

Sequoia's new paradigm of "VC capital + PE approach + MNC veteran" is a perfect logical closed - loop. However, for Shanze Biotech and Jin Xiaodong to turn the blueprint into reality, they still face three major challenges.

Firstly, reviving Avelox is no easy task. In China, the centralized drug procurement policy has profoundly changed the competition pattern between generic drugs and original - research drugs.

Although the antibiotic field is relatively less affected by centralized procurement, the general trend of price competition and domestic substitution is irreversible. Shanze Biotech needs to find a delicate balance between ensuring reasonable profits and maintaining brand value. How to re - activate the vitality of this classic brand through new marketing strategies and service models will be the first tough battle for Jin Xiaodong's team after taking office.

Secondly, finding high - quality late - stage innovative assets is a "black box". "Introducing late - stage clinical innovative products" is the core of the entire strategy but also the biggest unknown at present. Neither Sequoia nor Shanze Biotech has disclosed specific information about potential pipeline introductions.

Globally, high - quality late - stage clinical assets are scarce resources that major pharmaceutical companies compete for, and they come at a high price. As a newly established platform, how can Shanze Biotech stand out in the fierce competition and acquire potential "blockbuster" candidate drugs at a reasonable price? This tests Jin Xiaodong's team's BD ability and Sequoia's capital - operation ability.

Finally, building a team and culture from scratch. Although Shanze Biotech has inherited Avelox's global business, it is essentially a brand - new company.

Jin Xiaodong needs to quickly assemble an efficient and combat - capable core team and organically integrate the acquired global business system with the new company's strategic goals. This is not only about building an organizational structure but also about shaping corporate culture, and the difficulty is no less than winning any market battle.

In summary, through this textbook - like "David - and - Goliath" operation, Sequoia China has dropped a bombshell in the Chinese biopharmaceutical investment circle. It blurs the line between VC and PE and provides a highly imaginative example of how capital can intervene in and reshape mature pharmaceutical assets.

This is not only a bold bet by Sequoia but also an important experiment in exploring the capital - operation model of the Chinese pharmaceutical industry. The entire industry is watching with bated breath.

This article is from the WeChat official account "Super Focus foci", author: Fang Wensan. Republished by 36Kr with permission.