The estimated profit of tens of millions to a huge loss of hundreds of millions, in just over two months, what has Watson biology experienced?
On January 13, Watson Biotech released a performance forecast amendment notice that the net profit attributable to shareholders of listed companies in 2017 was a loss of 533.5 million yuan to 538.5 million yuan, just 2 months ago (November 2, 2017) In the provisional announcement of the 2017 Annual Results Announcement, Watson Bio is expected to have a net profit of 30 million to 51 million yuan attributable to shareholders of the listed company in 2017. The first mine in the pharmaceutical sector in 2018 will be blown up like this!
Performance is the culprit for gambling failure
For the reasons for the loss, Watson Biology said in the announcement that there are two main reasons. One of the important reasons is that the target company has not fulfilled its performance commitment, and Watson Bio will pay the responsibility.
According to the announcement, on January 2, 2018, Watson Bio received the "Notice Letter" issued by Du Jiangtao, and was informed that Du Jiangtao would fulfill the agreement of the compensation of 29.72% of the Hebei Daan equity compensation Bohui innovation.
According to the agreement of the “Equity Transfer Agreement†signed by Watson Bio and Du Jiangtao, the plasma collection scale of Hebei Daan in 2017, 2018 and 2019 should be no less than 150 tons, 200 tons and 250 tons, and from 2017. At the beginning of the calculation, if the amount of plasma collected fails to meet the corresponding minimum commitment value agreed upon in the agreement, and Mr. Du Jiangtao pays Bohui Innovation to pay for the equity of Hebei Daan, the company will bear the corresponding liability for compensation.
According to statistics from Hebei Daan, the amount of plasma collected in 2017 was 91.13 tons, which failed to meet the minimum commitment value of 142.5 tons per year as agreed in the above agreement. The implementation of the above agreement was fulfilled by Du Jiangtao and Bohui Innovation. The payment agreement was reached, and Du Jiangtao first paid 29.72% of Hebei Da'an equity compensation Bohui Innovation.
In addition, the two parties also agreed that in Hebei Da'an in 2018 and 2019, if the plasma collection volume fails to meet the corresponding minimum commitment value agreed upon in the agreement, Watson Biotech still has to bear the corresponding compensation liability, up to 14% of Hebei Daan held by the company. The equity is limited.
According to Watson's calculation, the above-mentioned matters are expected to result in a net profit loss of 456.65 million yuan attributable to shareholders of the listed company in 2017, including the company's liability for accounts receivable due to Hebei Daan's claims liability of 334.18 million yuan, and provision for long-term equity investment. The asset impairment loss due to the value and bad debt provision was 122.47 million yuan.
The landmines that were paid for the gambling will be traced back to 2012. In September of that year, Watson Biotech acquired a 55% stake in Daan Pharmaceutical for 529 million yuan. In June 2013, Watson Bio acquired again with 337 million yuan. Daan Pharmaceutical has a 35% stake in Daan Pharmaceutical. As a result, Watson Bio has acquired a 90% stake in Daan Pharmaceutical for a total of 86.59 million yuan.
After completing the acquisition of a 90% stake in Daan Pharmaceutical for only one year, Watson Biotech sought to sell part of Daan Pharmaceutical's equity in exchange for funds. In September 2014, Watson Bio (Party B) and Du Jiangtao (Party A), the actual controller of Beijing Bohui Innovation Optoelectronics Technology Co., Ltd. (referred to as Bohui Innovation), reached an agreement to transfer 46% of Daan Pharmaceutical's shares to 634.80 million yuan. .
The above-mentioned published gambling clauses are also included in the transfer agreement. When Daan Pharmaceutical forms 95% of the above plasma collection scale, it is a promised completion. If the commitment is not completed, Watson Biotech must transfer a certain percentage of equity to Du Jiangtao at the price of 1 yuan as compensation.
This time, Watson’s bio-gambling lost, and therefore paid a huge loss of costs, according to the agreement, Watson’s equity compensation to Du Jiangtao should be completed by June 30, 2018.
At the same time, the announcement also said that Watson Bio has increased its financial expenses and the provision for bad debts of accounts receivable due to the failure to implement the company's credit-to-equity swap plan, resulting in an increase in net profit loss attributable to shareholders of listed companies in 2017 of RMB 110.04 million.
The revised announcement shows that the company's non-recurring gains and losses in 2017 are estimated to be -24 million yuan, which is -29 million yuan less than the previous performance forecast non-recurring profit and loss amount of 48 million yuan, mainly because Watson Bio is responsible for Hebei Da'an claims. As a result, the non-recurring gains and losses for the same period last year were 216.29 million yuan.
The "Black Swan" incident was hit hard
The performance has changed a lot, this is not the first time Watson has been.
On February 29, 2016, Watson Bio disclosed that the company's total operating income in 2015 was 1.006 billion yuan (+39.92%), and the net profit attributable to shareholders of listed companies was -3. .89 billion yuan (-371.48%).
However, on April 27, 2016, Watson Bio released the “2015 Annual Results Express Amendment Announcementâ€, and the net profit attributable to shareholders of listed companies directly changed from a loss of 389 million yuan to a loss of 841 million yuan.
The reason for this is mainly due to the illegal operation of the vaccine in Shandong in March 2016. In this incident, Shandong Shijie, which was built by Watson Biotechnology, was hit hard, and in order to make Shandong Shijie successfully board the new three board, Watson The creature has done a lot of work.
Since July 10, 2013, Watson Bio has signed an equity transfer contract with Longchen Investment and Wang Chen for the acquisition of 100% equity of Shandong Shijie. After the transaction price is 300 million yuan, Watson Bio has successively acquired Ningbo Pu. The 100% equity of Novo, Shengtai (Putian) and Chongqing Beining were eventually incorporated into Shandong Shijie Company. In less than three years, Shandong Shijie has spent nearly 1.1 billion on Watson.
With the outbreak of the illegal vaccine incident, Shandong Shijie Bio was revoked the "Pharmaceutical Business License". At the same time, in April 2016, the State Council officially announced the "Decision of the State Council on Amendment", canceling the link of vaccine wholesale enterprises to operate vaccines, Allow pharmaceutical wholesale companies to operate vaccines.
This series of changes led to aggravation of Shandong Shijie's biological business, and Shandong Shijie Bio was subsequently delisted from the New Third Board (less than half a year). In the end, Watson Biotech transferred its 85% stake to Derun Tianqing and Yuxi Woyun at a discounted price of 697 million yuan.
The above-mentioned series of changes led to a huge decline in Watson's investment, which caused the company's performance to be significantly adversely affected. The incident was also called the "Black Swan" incident in the industry.
13-valent vaccine in time for firefighting
However, it is worth noting that on the day of the announcement of the performance forecast amendment, Watson Bio has also released a 13-phase pneumococcal polysaccharide conjugate vaccine (hereinafter referred to as "13-valent vaccine") phase III clinical trial progress announcement, the announcement The safety results and immunogenicity results of the phase III clinical trial of the vaccine have fully met the pre-assessment criteria for clinical trials, marking the successful completion of its clinical trials.
It is understood that the pneumococcal conjugate vaccine is a pneumonia vaccine for infants under 2 years old. The market size is huge. Among them, the 13-valent pneumococcal conjugate vaccine is the world's best-selling and sales-selling vaccine variety. Currently, the global market is only exclusive to Pfizer. Production and sales, the vaccine sales in 2015 and 2016 were $6.2 billion and $5.7 billion, respectively.
Watson Bio said that so far, no domestic producers have been approved to market for the 13-valent pneumococcal conjugate vaccine. This vaccine is also a successful 13-valent pneumonia conjugate vaccine after Pfizer’s second phase III clinical trial in the world. The successful phase III clinical trial of the vaccine marks that the company has reached the world's most advanced level in the research and development, production technology and quality standards of pneumococcal polysaccharide vaccine and pneumococcal conjugate vaccine, and also marks the development of bacterial polysaccharide conjugate vaccine in China. The ability has been ranked among the world's first.
At the same time, Watson Biology said that based on the previous 23-valent pneumonia vaccine history and the 13-valent pneumococcal conjugate vaccine production process, it is expected that the 13-valent vaccine will take about 5 months to get the production approval to the product for sale, and will be listed as soon as possible in 2019. At present, the company's application for the registration of the production of this vaccine is ready.
Finally, Watson Bio believes that the clinical research work of this vaccine will not have a significant impact on the company's recent performance in the final stage of clinical research. However, once the vaccine is approved for sale, it will have a huge positive impact on the company's future performance.
According to industry sources, 13 companies in China today have developed 13-valent pneumonia conjugate vaccines, but none of them have been listed. Watson Bio is the fastest-growing vaccine company in China. If it can be successfully listed, Watson's performance will be strongly supported.
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