016 in June 24, the general office of the State Council issued "to promote and regulate the large health care data application development guidance", put forward to accelerate the construction of a unified authority, interconnection of population health information platform, cultivate large health care data application Xinye state etc. 14 key tasks and projects. "Opinions" to further clarify, standardize and promote the "Internet plus health care services, medical wisdom, telemedicine and medical information and other industry segments will be supported by the state, the relevant industry chain of listed companies is expected to accelerate the sharing of large health care data feast.

As the "45" planning to start the year, and the "healthy China related pharmaceutical biotechnology industry policy will continue to fall to the ground industry which will usher in a historic opportunity for development. From the perspective of the overall development of the industry, the current proportion of China's health industry accounted for less than 5% of GDP, compared with more than 10% of the developed countries, the gap is still large. Industry insiders estimate that by 2020, the health of China's investment in the health industry is expected to reach 10 trillion yuan level.

Healthcare VC/PE funding steady development of medical equipment industry thriving

According to the hit information on its financial data products cvsource statistics show that 2016 second quarter healthcare industry in the field of VC / PE financing case 28, compared to the first quarter of 2016 the 47 chain decreased by 40.4%; financing scale 1.506 billion US dollars, an increase of 23.9%; average transaction amount of $0.54 million, compared to the first quarter of 2016 0.26 billion QoQ increased 107.69 percent. Phase compared to the second quarter of 2015 trading situation, the quarter compared to the same period of the number of transactions to reduce 67.06%, the total amount of the transaction is essentially the same, so the average transaction amount rose roughly twice as much; compared to the second quarter of 2014 transaction situation, the quarter the number of transactions compared to the same period changed little, reduced by 12.5%, trading volume rose sharply, or about 253.52%. As can be seen from the chart, regardless of the chain or year on year, the number of financing cases in the two quarter, although the current decline in the trend, but the average size of the transaction is a substantial increase.

Combined with the distribution of health care segments of the field of financing, the same will be found, far ahead of the field of medical equipment financing amounted to $1 billion 115 million 300 thousand. Corresponding to the above up the chain analysis is not difficult to find that second quarter healthcare industry financing case, segments of the medical equipment enterprises, Bai Sheng International won the from CITIC industrial fund financing of $10.5 billion, far beyond the scale of the industry average financing. This is the important reason for the substantial growth in an annulus comparing average transaction size, average transaction size of medical equipment in the field of a branch outshines others in the second quarter. The average transaction size Kyo, but also reflects the good market environment, contributed to the industry investors a good state of mind, to create a centralized and effective investment. (see Figure 1, figure 2)

Figure 1 2014Q2-2016Q2 China health industry VC/PE financing situation

Figure 2 2016Q2 China health industry segments VC/PE financing distribution

From the specific VC / PE financing case to analysis, medical equipment industry, Singapore listed company, the world's fourth heart stent makers Bai Sheng International Group Co., Ltd. SGX-ST.B20 won the transaction total price of $10.5 billion in financing, by CITIC Industrial Investment Fund Management Co., Ltd. through its management of the fund to privatize the acquisition. Pharmaceutical industry: Jilin purple Xin Pharmaceutical Limited by Share Ltd (002118.SZ) non-public offering of stock, red cherry assets to subscribe for 31847133 shares, the subscription amount of 400 million yuan, integrated Fidelity Investment Management Fund of Foshan science and technology incubator partnership (limited partnership) to subscribe for 15923566 shares, the subscription amount of 200 million yuan, the total transaction price of $91 million on the Beijing Gu Sheng Tang; Chinese medical health Polytron Technologies Inc Starr Chinese Peace Fund collar vote, with a $70 million investment and financing; Hualing medical technology (Shanghai) Co. Ltd. won the harvest investment partners, and capital with a $50 million investment and financing; Kang Sheng Investment for Jiangsu Yuyue medical equipment Limited by Share Ltd (002223.SZ) non-public offering of 8420365 shares of stock. The subscription price of 30.64 yuan / share, totaling $39 million, accounting for the total number of shares issued after the medical treatment in Shanghai 1.26%; cell engineering Technology Research Center Co., Ltd. get Jun Lian capital brought $0.28 billion investment and financing; completed investment led by InfoTech, Tsing capital 26 million U. s.dollars a new round of financing RayVio Corp. The seven major financing case, three listed companies, and received the amount of financing accounted for a larger proportion, especially Bai Sheng International received $10.5 billion from CITIC Industrial Fund, occupy a quarter of the 69% of the total size of the financing.

In addition, we can see that the proportion of the pharmaceutical industry is larger, the financing transaction situation is excellent, the relevant policies have been shown. On May 26, 2016, CFDA issued on the implementation of the general office of the State Council on carrying out the matters related to the consistency of generics quality and efficacy evaluation of opinions ", six aspects of evaluation object and implementation stage, the Senate than the selection and preparation, the consistency of the evaluation of the research content, consistency evaluation procedures, review inspection and verification, safeguard measures and other are described. (see Table 1)

Table 12016 Q2 health care enterprises to obtain key cases of VC/PE financing

Health care sector mergers and acquisitions in the pharmaceutical industry rebound in the size of a good momentum

According to database cvsource statistics, announced M & a market trading, trading volume in the second quarter of 2016 to 104, chain decreased 17.46%, compared with 2015 second quarter, an increase of 79.31%, compared with the second quarter of 2014, an increase of 67.74%; transactions to reduce the size of the chain 26.2%, compared with 2015 second quarter, an increase of 47.12%., compared with the second quarter of 2014, year-on-year increase of 90.5%. The completion of the transaction, the quarter of the number of transactions for 48, link to reduce 51.92%, compared with 2015 in the second quarter down 40%, with the second quarter of 2014 year unchanged; transaction size chain is increased by 53%, than in the second quarter of 2015 an increase of 41%, compared to the second quarter of 2014 and an increase of 190%. From the point of view of the size of the transaction, health care industry, for the second quarter of 2016 the merger and acquisition market compared to the previous decline in the trend of a slight rebound, and number of transactions showed a downward trend, so the average transaction size and significantly improved. (see Figure 3)

Figure 3 2014Q2-2016Q2 China Medical Health merger announcement and completion of the trend chart

From the specific analysis of major mergers and acquisitions in 2016, the health sector in the second quarter, Xinjiang hops Limited by Share Ltd (600090.SH) intends to purchase Hubei Tongjitang Klc Holdings Ltd to issue shares and to pay cash, $931 million; humanwell Pharmaceutical Group Corporation (600079.SH) a wholly owned subsidiary of Humanwell Healthcare USA, LLC intends to $529 million acquisition of Epic Pharma LLC100%, the stock price of $529 million; Zhendong pharmaceutical Limited by Share Ltd (300158.SZ) acquisition of Beijing Kangyuan Pharmaceutical Co., Ltd. 100% stake, the transaction price of $402 million; Harbin Gloria pharmaceutical Limited by Share Ltd (002437.SZ) Limited by Share Ltd Shanxi Pude pharmaceutical total 85.01% equity acquisition, the transaction price of $363 million; Fu'an Pharmaceutical (Group) Limited by Share Ltd (300194.SZ) wholly-owned acquisitions Yantai justaware Pharmaceutical Co. Ltd 10 0% stake, the transaction price of $228 million; Suzhou Tianma Fine Chemicals Co., Ltd. 002453.SZ will 118100000 shares shares (representing approximately 20.67% of the total share capital of the Pegasus refined) for sale at a price of $2.1 billion to Jinling Investment Holding Co., Ltd.; rivers created group shares acquired primary health care Limited16% equity Limited (601886.SH), at a price of 1.97 billion dollars. Similarly, major mergers and acquisitions in the case, the pharmaceutical industry is still a large proportion. (see Table 2).

Table 22016 major mergers and acquisitions in the medical and health industry in years

IPO financing freeze only three companies listed

According to cvsource statistics, 2016 second quarter IPO Financing case amount to 3, a decrease by half, and in the second quarter of 2015 down 82.35%, and the second quarter of 2014, an increase of half; transactions to reduce the size of the chain 87.71%, an dropped to the freezing point, a three years minimum. (see Figure 4)

Figure 4 2014Q2-2016Q2 China health industry IPO financing scale

IPO from specific cases to analyze and 2016 in the second quarter of the largest domestic healthcare industry in the field of IPO Financing Case for Zhejiang Xinguang Pharmaceutical Co., Ltd. 300519.SZ on the Shenzhen Stock Exchange GEM Listing and fund-raising total to $37 billion; Ying Jian Medical Group Co., Ltd. 01419.HK in Hong Kong Cross listing, fund-raising total to $0.14 billion; Department of Medicine Group Co., Ltd. 08161.HK in Hong Kong over the listed, raising the total 0.09 billion. IPO financing in the quarter compared to the quarter there is a sharp decline. (see Table 3)

Table 32016 Q2 domestic medical and health industry enterprises IPO case

Health Internet trends in 2016 significantly more favorable policies

Relevant data show that according to the above mentioned "to promote and regulate the large health care data application development guidance" development goals to the end of 2017, will achieve the national and provincial population health information platform and national drug bidding and purchasing business application platform for the Internet via the Internet, basically formed cross department of health care data resource sharing pattern. By 2020, built national medical and health information classification open application platform, implementation and demographic, legal, geography, and other basic data resources cross sectoral, cross regional sharing; the basic realization of the urban and rural residents have standardized electronic health records and complete function of health card, Jian Kang medical data relevant policies and regulations, safety protection, using standard system continue to improve, adapt to the situation of our country's medical and health data application development model has been basically established, the health care data industry system has been initially formed, the new format booming.

Relevant data show that according to the above mentioned "to promote and regulate the large health care data application development guidance" development goals to the end of 2017, will achieve the national and provincial population health information platform and national drug bidding and purchasing business application platform for the Internet via the Internet, basically formed cross department of health care data resource sharing pattern. By 2020, built national medical and health information classification open application platform, implementation and demographic, legal, geography, and other basic data resources cross sectoral, cross regional sharing; the basic realization of the urban and rural residents have standardized electronic health records and complete function of health card, Jian Kang medical data relevant policies and regulations, safety protection, using standard system continue to improve, adapt to the situation of our country's medical and health data application development model has been basically established, the health care data industry system has been initially formed, the new format booming.

Research information

Ho ho River assistant analyst

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Email： river@chinaventure.com.cn

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