Wu Qing, chairman of the China Securities Regulatory Commission, said at a press conference of the State Council that in order to further stimulate the vitality of the M&A and restructuring market, the CSRC has studied and formulated the "Opinions on Deepening the Reform of the M&A and Restructuring Market of Listed Companies" ("M&A Six", hereinafter referred to as the "Opinions"), including supporting the transformation and upgrading of listed companies in the direction of new quality productivity, encouraging industrial integration, improving regulatory tolerance, and improving the transaction efficiency of the restructuring market.

Among them, it is clear that it will vigorously support listed companies to carry out cross-industry mergers and acquisitions and acquisitions of unprofitable assets based on transformation and upgrading.

This means that unprofitable biotech companies may usher in a new path to land in the capital market. At the meeting, Wu Qing said that mergers and acquisitions are a major event in the capital market, and it is a very important function of the capital market to further promote the effective allocation of resources by supporting enterprise mergers and acquisitions.

In order to further stimulate the vitality of the M&A and restructuring market, the China Securities Regulatory Commission (CSRC) has studied and formulated the Opinions on the basis of extensive research and listening to the opinions of all parties in the previous stage. The main contents of the comments include:

The first is to vigorously support the transformation and upgrading of listed companies in the direction of new quality productivity. The China Securities Regulatory Commission will actively support listed companies to carry out mergers and acquisitions around strategic emerging industries and future industries, including cross-industry mergers and acquisitions based on transformation and upgrading, as well as the acquisition of unprofitable assets that will help strengthen the chain and improve the level of key core technologies, so as to guide more resource elements to gather in the direction of new quality productivity.

The second is to actively encourage listed companies to strengthen industrial integration. While supporting the development of new industries, the capital market will continue to help traditional industries to reasonably improve industrial concentration and improve the efficiency of resource allocation through restructuring. The need for integration between listed companies will be supported by significantly simplifying the review process. At the same time, through some arrangements such as "reverse linkage" during the lock-up period, private investment funds are encouraged to actively participate in mergers and acquisitions.

The third is to further improve the inclusiveness of supervision. While further complying with the rules, the China Securities Regulatory Commission will respect the laws of the market, the economy and innovation, and further improve the tolerance of matters such as restructuring valuation, performance commitments, intra-industry competition, and related party transactions according to the actual situation, so as to better play the role of the market in optimizing the allocation of resources.

Fourth, we should make great efforts to improve the efficiency of transactions in the restructuring market. The China Securities Regulatory Commission (CSRC) will support listed companies to further improve the flexibility of transactions and the efficiency of capital use by adopting payment instruments such as installment issuance of shares and convertible bonds, payment of transaction consideration in installments, and supporting financing in installments according to the specific needs of the transaction arrangement. At the same time, a simplified review procedure for restructuring has been established to greatly simplify the review process, shorten the review time limit and improve the efficiency of restructuring for the restructuring of qualified listed companies.

The China Securities Regulatory Commission (CSRC) will vigorously support listed companies in carrying out cross-industry mergers and acquisitions and acquisitions of unprofitable assets with the goal of transformation and upgrading. This may create a new way out for unprofitable biopharmaceutical companies.

In the past two years, the secondary market has been falling and falling, and almost all biomedical companies, especially unprofitable companies, have lost their financing windows.

The primary market staged a financing cliff, and the IPO situation of Hong Kong stocks and the Science and Technology Innovation Board is not optimistic, which makes many unlisted and unprofitable enterprises in a crisis moment of tight funds for a long time.

As we all know, biomedical innovation is a long process with high risk, high investment and long cycle, and if it cannot be integrated into new funds to support laboratory research, animal testing, and phase I, 2 and III clinical trials in human beings, biomedical innovation may come to an abrupt end. Therefore, it is urgent to save confidence in investment and financing.

At the end of July, the Shanghai government issued the "Several Opinions on Supporting the Innovation and Development of the Whole Chain of the Biomedical Industry", and launched 37 measures to support the innovation and development of the whole chain of the biomedical industry.

Among them, it is clearly emphasized to strengthen investment and financing support, including giving full play to the role of Shanghai biomedical industry parent fund, biomedical industry equity investment fund and biomedical innovation transformation fund, and strengthening strategic investment in potential enterprises and high-quality R&D pipelines; Encourage government guidance funds to "invest in early investment and small investment in hard technology".

and encourage the development of corporate venture capital to strengthen innovation incubation and upstream and downstream synergy in the industrial chain; Support enterprises to become bigger and stronger through mergers and acquisitions.

With the strong support of local governments and the support of the "Six Mergers and Acquisitions" launched by the China Securities Regulatory Commission, the market may regain confidence. It is expected that the biomedical industry can usher in a more brilliant future.

Source：https://mp.weixin.qq.com