Business News Agency On January 19, the reform of Shanghai Pharmaceutical Group once again became the focus of the Shanghai State-owned Assets and State-owned Enterprise Work Conference. This is not only because of the initial results of the reorganization and listing for nine months, but also because of the significance of this reform – in order to rejuvenate the state-owned pharmaceutical industry in Shanghai.

In March 2010, the major asset restructuring of the pharmaceutical business of Shanghai Pharmaceutical Group and Shanghai Shimao Group was completed. The newly formed Shanghai Pharmaceutical Group was formally listed as the most remarkably market-oriented restructuring case in China's capital market last year.

Xu Guoxiong, the president of the new Shanghai Pharmaceutical Group’s open recruitment, this Shanghai state-owned large enterprise group’s first-time publicly-recruited company’s first-time leader took office and set a “military order”: the compound annual growth rate of the group's profit is not less than 20%. Failure to achieve this goal led to the resignation.

For an old state-owned pharmaceutical company with a deep history, it is not easy. As early as in the past, Shanghai's pharmaceutical companies ranked first in the country, and during its peak period, Chinese medicine, chemical medicine, and medical machinery all came from Shanghai. However, after the separation of government and enterprises from 1996 to 2002, successive forms of equity restructuring led to some detours in Shanghai Pharmaceutical Group. After 2006, due to the financial crisis of the major shareholders and the pharmaceutical accidents of Hualian Pharmaceutical Factory, etc. , Shanghai Pharmaceuticals is almost stagnant development, Shanghai's pharmaceutical economic aggregate in the country's ranking quickly dropped from the first straight line to the fifth, the Shanghai Pharmaceutical Group was almost forgotten.

Lu Mingfang, chairman of the New Shanghai Pharmaceutical Group, frankly stated: As an old state-owned enterprise, Shanghai Pharmaceuticals has a profound historical record. Its restructuring process is an attempt to straighten out the institutional mechanism in the reform of state-owned enterprises. What must be brought about is changes in concepts and systems. Need to continue to innovate market-oriented and improve the core competitiveness of the industry. "Restructuring is not a goal. The key is to promote industrial development through restructuring, improve core competitiveness, and realize that Shanghai Pharmaceuticals will take off again and strive to adapt the development of Shanghai Pharmaceuticals to Shanghai's urban strategy."

One of the prescriptions: No longer "set without group"

Since the resumption of trading on March 9 last year, the new Shanghai Pharmaceutical Group has handed in a very good transcript.

In the first three quarters of last year, the Group’s main business growth exceeded 20%. A few years ago, the growth of the main business was only 2%-3%. In the same period, the group's profit increased by 41% year-on-year. This growth rate is much higher than the average level of the national pharmaceutical industry. At the same time, the group's net profit reached 1.04 billion yuan, which is the highest among the 132 listed pharmaceutical companies in China. In the three quarters, the group achieved a full-year profit promise for the market. The capital market gave a good response. The Shanghai Composite Index fell 13.64% for the whole year, and New Drugs' share price rose 56.56%.

The two historical double breakthroughs in sales revenue and profitability added “gold content”, and the growth of these economic indicators was achieved on the basis of “two no”. That is, the reorganization is only to build a unified operating platform, and there is no new capital inflows; without the support of major mergers and acquisitions projects, economic indicators have achieved substantial growth.

In the past 10 years, Shanghai Pharmaceutical Group had three reorganizations. But each time, it seems that the capital market "wants to say that it is not easy to love you." So, why did this time reorganize the Shanghai Pharmaceutical Group?

Optimizing the management and control capability is an important measure after this reorganization. Before the reorganization, each enterprise had both controlling and equity participation, different systems, different cultures, and different foundations. Although the name was “group”, it actually was “collecting without corporation”. Within one month after the reorganization, the group has established 12 core companies. The goal of these 12 companies is to become the leading segment of the industry. The single sales revenue exceeds 1 billion yuan each year and contributes more than 100 million yuan to the group. More importantly, in order to eliminate the “two skins” at the group level and its corporate level, the Group has established a special deliberative body, the Management Committee, and the chief executives of all 12 core companies are held once a month. Meetings to improve the management and control capabilities of the headquarters.

The advantage of Shanghai Pharmaceuticals lies in the system and comprehensiveness of the industry, and its problems lie in the decentralization of industries and their own governance. In the face of this problem, the new drug's internal integration highlights the core requirements for optimized resource allocation and concentrates on the development of the industry. At present, industrial restructuring revolves around the promotion of large-scale products. In the past, it was difficult to promote repositioning of repetitive products. Xinyi, Medicinal materials, Chinese and Western 3D, China, and Biochemistry have all undergone substantial product-related asset restructuring. . The successful completion of the bio-freeze dry powder injection project of Shanghai No. 1 Biochemical Pharmaceutical Co., Ltd. with an investment of 120 million yuan not only marked a rise in bio-chemical production capacity, but also accelerated the bio-medicine core block of Biochemical Chaoyue Pharmaceutical Group to a greater extent. The transformation of status; Fahrenheit Industrial turned into a trustworthy balance, China Pharmaceuticals decisively closed the loss-making workshop and focused on the development of cool products... The development strategy of the Group has become clearer.

The second prescription: change "will not sell drugs"

In the past, there was a saying that “the medicine would not sell medicine” on the market—in the central city, most antibiotics were joint ventures and foreign drugs, while the state-owned enterprises produced less than 10%. In this regard, the new drug is determined to carry out marketing changes, docking resources, real value linkage in real business.

Li Yongzhong, the deputy general manager in charge of marketing, took office as the primary task is based on the group’s “short-term breakthrough, long-term value” guiding ideology. It took one and a half months to explore the marketing resources of the new drug and found that the entire new drug group has many Resources can be integrated. For example, for drug manufacturers, product approvals are the most important. The entire new drug has 3457 drug approvals, but only 1,000 approvals are actually produced, and most of the approvals are not produced for a long time because they have no market, no cost advantage, or no raw materials. Therefore, Shanghai Pharmaceutical Group set up a strategic platform to integrate resources.

The first is the government procurement procurement linkage platform. Since each of the companies of the Shanghai Pharmaceutical Group has its own government affairs personnel, the differences in resource input, manpower input, and operation methods are relatively large, and the modes are not the same. In the government affairs bid management process, price management methods, multi-sector coordination mechanisms, negotiation experience, etc. need to be improved. At present, Shanghai Pharmaceutical Group has established ten regional sharing platforms by integrating the advantages of the government's bidding resources, while at the same time playing the advantages of core enterprises in advantageous regions and forming a sharing mechanism.

There is a centralized sales platform for key products. The Group focused on 58 key varieties from 1200 varieties. These 58 varieties accounted for 65% of the group's profits. At the same time, of the 58 focused key products of the Group, 21 had sales of billions of single products.

Li Yongzhong told reporters that after realizing the real value linkage of the business from within, the price and cost advantages are obvious, and distribution is no longer confined to the Shanghai market, which highlights the national strategy.

At the beginning of this year, Shanghai headquarters of Shanghai Pharmaceuticals was established. The company invested RMB 2.328 billion for the acquisition of 65.24% of the controlling stake in CHS, which is the real asset of CITIC Pharmaceuticals. CITIC Pharmaceuticals holds a leading position in the Beijing market, in which the hospital's pure-selling business reaches 70%. With this acquisition completed, the market share of Shanghai Pharmaceuticals in the Beijing market is expected to enter the top two in one move, and the national strategy has begun to make strides.

The third prescription: R & D focus

"For the pharmaceutical companies, the dumbbell-type personnel structure is the most reasonable, that is, R & D and sales personnel in the two, the proportion of high, while the proportion of production personnel is small." Xu Guoxiong told reporters.

A pharmaceutical company must have sustainable development capabilities and new product development is the key. Prior to the reorganization, Shanghai Pharmaceutical Group initially established a two-tier new product research and development institution with a central research institute and a corporate research institute (technical center) as its main body. Although the Central Research Institute studied all the technical support for the company, the cooperation between them The effect is not enough. After the reorganization, the R&D strength has been further strengthened along with the original Shangshi Group's pharmaceutical companies. The entire S&P Group has 2 state-level technology centers and 11 provincial-level technology centers.

In the past six months or more, the Deputy General Manager Jiang Yuanying, who is in charge of R&D, led the team to conduct thorough investigations and research on various core companies. After discovering, some companies have unclear R&D focus, lack of R&D direction, non-standard project management, and industrialization capabilities. Problems such as weakness have brought forward new ideas for R&D transformation.

At present, Shanghai Pharmaceutical Group has formulated the "Administrative Measures for the Development of New Drugs", which has standardized the process of R&D projects, and has played a role in focusing research and development, focusing research and development, standardizing project management, and improving research and development efficiency. At the same time, the Group strengthened the management force of the Ministry of Scientific Research and Development, clarified the job responsibilities of the Ministry of Scientific Research and Development, and made the Research and Development Department play the role of the Group's R&D system to coordinate and coordinate the management center.

In order to integrate R&D efforts, Shanghai Pharmaceuticals unifies some major R&D projects to the group level management, and is jointly developed by the Central Research Institute and the Enterprise Research Institute. From the beginning of the project, it focuses on the key points and cooperates to adopt a contractual management method. The capital is from the headquarters and the company. Joint investment, and the new drugs developed out of the company fell into the corresponding companies; the group also increased the R & D investment and R & D personnel salary standards. Last year, the Group's R&D input accounted for 3.6% of industrial sales. Jiang Yuanying told reporters that this year, R&D investment will account for more than 4% of industrial sales.

In the direction of research and development of new drugs, focusing on the five major therapeutic areas such as cancer, cardiovascular, digestion and metabolism, mental nerves, and immune system diseases, based on providing safe and effective drugs for major diseases and chronic diseases. At present, the Group has more than 200 projects under research, and a total of 12 projects have been selected for the first batch of projects and the second batch of projects under the “Eleventh Five-Year Plan” of major national major science and technology major projects. Last year, the Shanghai Pharmaceutical Group had 14 new products to achieve industrialization. This year, more than 10 R&D new products will be listed and the R&D product line will be further enriched.