CX Daily: Chinese pharma turns to global deals to cure capital crunch
TOP STORY
Biotech?/
After enduring the chill of a prolonged capital winter, China’s drugmakers have begun to feel a thawing breeze. ? Deal-making has surged in 2024, with the nation’s pharmaceutical industry attracting increased attention from international rivals for their innovative treatments. Last year, Chinese drugmakers set a record for new drug out-licensing deals — in which a company allows another party to use its product, technology or intellectual property — and saw the first-ever acquisition of a domestic biotech firm by a multinational pharmaceutical giant. ? The resurgence comes as China’s drugmakers face a sustained investment contraction, mirroring a wider pullback by investors amid the country's stock market slump. Over the past three years, Chinese pharmaceutical shares have lost $600 billion in market value.
Obituary?/
Zong Qinghou, founder and chairman of beverage giant Hangzhou Wahaha Group Co. Ltd., and once China’s richest man, died on Sunday due to illness. He was 79. ? Zong died at 10:30 a.m. after “ineffective treatment for his illness,” the company said in a statement, which did not specify what Zong was suffering from or where he was treated. A memorial service will be held Wednesday in Wahaha’s Xiasha base in Hangzhou, capital of East China’s Zhejiang province, the statement said. ?
Fire?/
At least 15 people were killed and 44 injured after a fire that broke out in a ground floor electric bike parking lot spread to engulf a residential building in East China’s Nanjing city Friday. ? The blaze in Yuhuatai district broke out at around 4:30 a.m., with investigations into the cause of the fire ongoing, according to a fire rescue official at a press briefing Saturday. ?
FINANCE & ECONOMY
IPO?/
China’s top securities watchdog denied market speculation that the regulator will retrospectively review initial public offerings (IPOs) made over the past 10 years but said a strict check will be kept on listed companies to catch any violations. ? Financial audits remain a top priority in the daily supervision of listed companies, Yan Bojin, chief risk officer of the China Securities Regulatory Commission (CSRC) and head of the department of public offering supervision, said at a Friday press conference. ? The CSRC will use regular reporting and on-site inspections to screen high-risk, suspicious companies, Yan said. And once financial fraud is found, it will proceed with investigations, with serious cases being transferred to the public security authorities.
Insurance?/
The average annual rate of return on Chinese insurers’ investments last year tumbled to the lowest in 15 years, although it exceeded 2022’s rate if unrealized gains were counted, official data showed. ? Insurance firms’ investments yielded 2.23% in 2023, down 1.53 percentage points from the previous year, data released last week by the National Financial Regulatory Administration (NFRA) showed. The reading was the lowest since 2008, when the rate slumped to 1.89% from 12.17% the previous year amid the global financial crisis. ?
Quick hits?/
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BUSINESS & TECH
PDD?/
PDD Holdings Inc.’s aggressive enforcement of non-compete agreements in employee contracts has sparked accusations it is abusing the clause, with former staff of the Chinese e-commerce giant telling Caixin they have been sued for hundreds of thousands of yuan despite?only holding junior positions. ? Former employee Lu Zhi said she joined PDD in July 2022 and left in March 2023 and during her eight-month stint at the company, she earned a total of 76,000 yuan ($10,560). However, she was subject to a non-compete period of nine months, during which PDD offered her 14,000 yuan, she said. ? Upon joining another tech firm during that period, PDD sued her for 260,000 yuan in liquidated damages for breaching the clause, more than three times the total wages she earned while at the company, she told Caixin. ?
Basketball?/
The Chinese Basketball Association (CBA) will throw its weight behind a new East Asia professional basketball competition, according to the body’s president Yao Ming Friday. ? By supporting the new Rising East Asia League, or Realeague, the region could see the development of large-scale, long-term basketball league, the former National Basketball Association (NBA) star said at the inaugural Greater Bay Area International Sports Business Summit in Macao.
EVs?/
The founder of troubled Chinese luxury electric vehicle startup HiPhi said companies had made approaches to the carmaker for potential acquisition, investment or restructuring, and it may now have a three-month window to try to stay afloat. ? The brand under Shanghai-based manufacturer Human Horizons Group Inc. announced internally on Sunday that it would halt production for six months due to financial difficulties. Its founder Ding Lei updated employees on developments on Thursday evening. ?
Quick hits?/
Daily Tech Roundup?/
Long Read?/
GALLERY
A section of a bridge in Nansha, a district of southern metropolis Guangzhou, collapsed Thursday evening, killing five people after four cars and an electric scooter were sent plunging through the gap. The partial collapse was caused when an unladen cargo ship crashed into the bridge pylons. Search and rescue crews have recovered two cars from the water and the other two and scooter from the ship that caused the collapse.
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