Experts: New GMP Reform Will Help Eliminate Obsolete Production Capacity

By the end of 2013, the new GMP “Big Exam” experienced by sterile drug manufacturers such as blood products, vaccines and injections entered the countdown period. The reporter recently learned from the State Food and Drug Administration that only 40% of the pharmaceutical products used to pass the new GMP certification are sterile, which means that more than half of aseptic manufacturers may be forced to stop production next year. In this regard, analysts pointed out that the new GMP reform is conducive to the elimination of backward production capacity, in the context of the suspension of production of most small and medium enterprises, less than half of the companies have to supply 100% of the market, or usher in the sales season next year. Pharmaceutical companies such as Cologne Pharmaceuticals and China Resources Double Crane Co., Ltd. are expected to benefit from this.
Unsuccessful enterprises are facing production suspension According to the newly revised “Product Manufacturing Quality Management Regulations”, sterile products such as blood products, vaccines, and injections in China should reach the newly revised GMP requirements by December 31, 2013, otherwise companies will not be allowed to continue to produce drugs. The reporter learned from the State Food and Drug Administration that a total of 1,319 sterile pharmaceutical manufacturing companies nationwide. As of December 23, there were 568 pharmaceutical production companies that had passed the new GMP revision, accounting for 43% of the total number of aseptic pharmaceutical manufacturers. According to the requirements of the competent department, the new version of GMP certification must not be "before the loose," and as a result, the industry judges that the number of pass-through entrepreneurs should not sprint in the last minute. This means that, according to the current progress, after the "major limit" expires at the end of the year, more than half of the sterile drug companies may be forced to stop production next year.
The reporter noticed that the listed company has recently announced that its subsidiary has not yet obtained the new GMP certification, and the relevant production line will stop production after December 31 this year. It is expected to resume production after being certified in 2015.
In addition, the reporter also conducted a thorough understanding of the pharmaceutical companies of Shanghai, Shenzhen and Shenzhen that mainly deal with aseptic products such as blood products, vaccines and injections. According to statistics, since the beginning of this year, 24 listed companies including blood products, vaccines and injections such as Neptunus Biotech, Qianhong Pharmaceutical and Yisheng Pharmaceutical have obtained new GMP certifications. The eight injection drug companies headed by Shanghai Kaibao passed the certification in 2011 and 2012 respectively. The blood product industry, Hualan Biotech and Boyaa Bio were first to pass the new GMP certification in the first half of 2012.
Shanghai Rice, which launched the new GMP reform this year, also announced on November 29 that the company has received a new GMP certificate and is valid until November 24, 2018. For the next year's market space, the head of the company’s securities department told reporters: “We do not sell. Whether or not other companies stop production, the market share of the company's products has always been high, especially the market demand for blood products is particularly strong.”
Boli biological also told reporters that the market space in the future should be improved, the specific sales performance also need to be based on the actual situation. As to whether it will join the wave of industry consolidation, "it still depends on opportunities. The company expects good acquisition targets and opportunities." Company officials told reporters.
Sales performance is expected to gradually release interviews with reporters. At present, most companies that produce blood products and vaccines have passed the new GMP certification. The main reason is that the gross profit rate of the two sub-sectors is relatively high and the overall profitability is strong. Capital strength to transform. However, the name of the other party, the proportion of the above-mentioned subdivided industries in the field of aseptic preparations is not high, accounting for most of the injection or injection companies, and the overcapacity problems faced by such pharmaceutical companies will be expected to pass this new GMP reform. has been solved.
Brokerage analysts believe that from the perspective of the flexibility of listed companies in the next year, the obvious benefit will be the relatively low-end varieties in the field of injections. Similar market prices for antibiotic injections such as Columbine Pharmaceuticals and China Resources Shuanghe will be more concentrated. High, its growth rate will also accelerate. Guo Zhi Securities Pharmaceutical Industry Research Yan Zhi told reporters that although injection listed companies may usher in the sales season, but this process will be relatively slow. It is reported that companies that have not passed the new GMP certification have already begun to expand their production from the second half of this year, pre-existing one to two quarters of products, and this batch of products within the sales period after the deadline will still be available for a certain period of time. Therefore, for the listed companies that are “passing the customs”, their sales performance will not be explosively increased in the short term, but will be a gradual release process.
In the context of accelerating the consolidation of the pharmaceutical industry and frequent corporate mergers and reorganizations, will the new GMP "test" set off a new wave of mergers and acquisitions? Yan Zhi said that not all companies that have not passed the new version of GMP have acquisition value. The used production capacity still needs the listed company to spend money to transform it, and the excess capacity is not enough to drive the mergers and acquisitions. At present, the acquisition of pharmaceutical listed companies is still from the company's varieties. Complementarity is the starting point.

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