Intensive integration of the giants intensifies the global healthcare industry or welcomes new opportunities

From January 7th to 10th, the JPMorgan Medical Health Global Summit, which is regarded as one of the industry's development trends, was held in San Francisco, USA. The trend of large-scale M&A integration re-emerged in the industry was confirmed by many participating companies. Recently, some research institutes said that financing and mergers and acquisitions in the healthcare sector will usher in a rebound boom in 2019.

In recent years, global technology giants such as Apple, Google, and Amazon have also begun to deploy health care fields to find a combination of technology and healthcare. The intensification of resource integration in the industry and the entry of new forces such as many technology giants have given the global healthcare industry a new development opportunity.

Industry mergers and acquisitions are expected to accelerate

As the stock market continues to fluctuate and economic growth slows, the health care sector has become a new bright spot in the investment community. In 2018, the US stock market S&P 500 index fell more than 6%, and the health care sector rose 4% against the market, becoming one of the only two rising sectors; the top-selling S&P 500 index stocks, medical equipment supply Business Abiomeide, equipment supplier Boston Scientific, chain medical institution HCA, and gene research company Illumina all performed well, and large pharmaceutical companies such as Eli Lilly, Merck, Pfizer and other stocks all rose to double digits. According to Factset data, 81% of healthcare companies' results in the third quarter of 2018 exceeded expectations, and the overall performance growth of the sector in 2019 is expected to be among the top 11 S&P segments. According to institutional sources, the rise in health care stocks has not yet ended, and investors are expected to continue to be enthusiastic about it in 2019.

The 37th Morgan Chase Medical Health Global Summit attracted nearly 10,000 participants from hundreds of companies including investment institutions, well-known pharmaceutical companies and biotechnology companies, and discussed industry outlook, latest technologies, and investment trends. The summit confirmed that VCs have increased the capital injection in this area and the acceleration of M&A integration of existing resources in the industry. Capital is optimistic about the direction of digital disease surveillance and diagnosis and consumer health information management.

In the year of 2019, the medical circle frequently reported heavy mergers and acquisitions. On January 3, Bristol-Myers Squibb announced a $74 billion acquisition of New Base Pharmaceuticals. On the 7th, Lilly announced that it would spend $8 billion to acquire anti-cancer drug star and Nasdaq-listed company Loxo. On the 8th, Japan’s Takeda Pharmaceutical also announced Completed a nearly $60 billion acquisition of Irish Charles Pharmaceuticals. Some analysts said that the acceleration of the discovery of new drugs and the increasingly fierce competition in new drug research and development have made M&A the first choice for the development of many pharmaceutical giants, and through the vertical integration to obtain more product lines and greater competitiveness.

According to a recent report released by Baker McKenzie and Oxford Economics, not only pharmaceutical companies, but the entire healthcare sector will witness a rebound in financing mergers and acquisitions in 2019. M&A in the industry will reverse the 5% decline in 2018, an increase of 7% to 331 billion. Dollar. The report also predicts that the growth momentum in the US and Asia is particularly strong. In particular, the report pointed out that the speedup approved by the US Food and Drug Administration (FDA) and the more liberal listing of biotech companies in regional trading centers such as Hong Kong will promote the development of the healthcare industry.

Capital One's latest survey also shows that executives in the healthcare sector believe that 2019 will witness a strong growth in the field, and 70% of respondents predict that business performance will be better than 2018. Cai Weirong, a partner at Ernst & Young in Hong Kong, said that global mergers and acquisitions and IPOs in the healthcare sector were a strong year in 2019. He said that the reason for its strong development is the growing awareness of health care, the development of technology-related health services, and the interest of capital against new cancer technologies.

Technology giants make a big move

In recent years, with the growth potential of the healthcare sector, global technology giants such as Apple, Google, and Amazon have accelerated their deployment in this field and their influence has been deepening. Analysts expect that the promotion of technology giants will become more apparent in 2019. Create new development momentum for the healthcare industry. Previously, Forbes said in the 2019 health care forecast that this year the global healthcare industry will continue its value-oriented model, and artificial intelligence (AI) and other technologies will be more used in this field. Digital healthcare is gradually forming and appearing with smart speakers. The combination of products and other trends, this provides a huge space for technology giants to expand their footprint in this field.

Apple, which is mired in a weak hardware business, recently said that it will accelerate its transformation and launch more new services in 2019, one of which is the health care service. Apple CEO Cook even hopes that people will remember Apple in the future because of its contribution to human health. According to market research firm CB Insights, Apple will soon offer services such as telemedicine, fitness instructors and healthy chatbots. At present, Apple has recruited dozens of professional doctors and distributed them to various internal business teams. The analysis said that this will help Apple's health technology products be recognized by more professionals. Previously, Apple's wearable product Apple Watch Series 4 added ECG ECG function, becoming the world's first consumer product that can be used for self-testing ECG.

Google is an early giant in the health care field, and its influence has also been recognized by the market. Last year, CB Insights launched a survey on "Which technology giants have the biggest impact on the medical sector." The results show that Google is ahead of Amazon and Apple. In 2018, DeepMind, owned by Google's parent company Alphabet, has developed an ophthalmic diagnostic AI algorithm that is not only faster, lower cost, and even more accurate than professional doctors; in December, Google said it has launched an AI project in Thailand for diabetes. Screening for diseased eye diseases. In 2015, Google established the life sciences department Verily, and has been working with professional medical institutions and pharmacies. It has also developed some medical testing components and monitoring wearable devices. Earlier this year, Verily was again optimistic about capital and received a $1 billion financing led by the Silver Lake Group.

Amazon's reach in the healthcare sector is broader and touches more segments. Analysts said that Amazon is relying on its vast business network to open up the health care industry chain. At present, Amazon has cut into the healthcare field from multiple directions, such as cooperating with large medical distribution organizations such as Cardinal Health and selling medical equipment; AWS Cloud Business strengthens the development of customers in the healthcare field, and undertakes health data load and analysis; voice assistant Alexa will promote the development of family medicine through the use of complementary physicians and drug reminders. In 2018, Amazon showed great "ambition" in the field: after the establishment of a medical health joint venture with Berkshire Hathaway and JP Morgan Chase in early June, it announced in June that it would acquire online pharmacy PillPack for $1 billion; November Launched the "Amazon Understanding Medical" project at the Network Services Conference, using artificial intelligence to analyze electronic medical record data and continue to enter the healthcare market. (Source: Xinhua News Agency reporter: Xue Yu)

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