1988: Back to the human world for a few years

Chapter 547 Rejection
"Reject them!"

Yang Mo's tone was full of unquestionable: "Tell Inoue and the others that we welcome them to invest in CRO companies (contract research organizations) in China on the basis of sharing scientific research results. We don't even mind them becoming CDMOs (contract development and production organizations) for some chiral drugs. But if they want to invest in the Momo Baiyao project led by our Dahua company... Sorry, the conditions are not yet ripe!"

Although he said that "the conditions are not yet ripe", everyone could hear the determination in his words.

Obviously, this so-called "condition" will probably never mature.

Miss Mu on the other end of the phone spoke calmly, "But Sankyo Co., Ltd. is not interested in our building a springboard market in Mexico, nor is it interested in the generic drug factories in Laos."

"In the words of President Inoue, neither of these two projects has sufficient positive impact."

"The NAFTA agreement between the United States, Canada and Mexico has not yet been finalized, and there has not even been any news of any breakthrough in the negotiations;"

"Laos and Myanmar are traditionally important investment areas for the island country. Even without the help of Dahua, Sankyo Co., Ltd. can easily establish or merge several generic drug factories there. Moreover, the continuous investment over the past few decades has not allowed the island country to fully achieve the expected results. "

"Therefore, if we only merge a few generic drug factories in Laos, the island country's investors will not have enough expectations. If we use this as an excuse to withdraw a large amount of merger and acquisition reserves, it will be difficult to convince the relevant regulatory authorities in the island country."

At this point, Miss Mu paused slightly and said, "Yang Mo, the country has been discussing whether to relax the standards for foreign investment recently, and President Inoue also said that he is optimistic about the development prospects of the Chinese pharmaceutical market. If we are willing to allow them to get involved in the pharmaceutical chain terminal and sign a strategic cooperation agreement in this area, they are willing to purchase 33.5% of the shares of the Momo Baiyao project at a super high premium... To be fair, 110 billion yen, or 7000 million US dollars, is indeed a very sincere price."

Although the Momo Baiyao project has successfully opened 503 small and medium-sized outlets under the coordination of relevant departments in Dezhou and Lanling, relying on the health clinics in various villages, and is definitely the "non-state-owned drug store chain project" with the largest number of outlets in the country, it is rooted in the grassroots of rural areas after all. Whether it is investment cost, commercial value, or appreciation space, it is far from comparable to those pharmacies in the city.

Therefore, the offer of 7000 million US dollars in exchange for 33.5% of the shares was such a high premium that it was hard to describe it as a sucker... You know, even at the beginning of the millennium, even Neptune, which was regarded as a benchmark in the pharmaceutical retail industry at the time, only received an injection of 4000 million US dollars after signing a strategic cooperation agreement with Goldman Sachs.

It is now 1991, and the country has not even issued any document to encourage the development of the private pharmaceutical retail industry. The value of the 7000 million US dollars reported by Sankyo Co., Ltd. can be imagined... No wonder even Miss Mu couldn't help but be tempted.

Hearing this, Yang Mo just sneered: "You want to get the voting rights and veto power of Momo Baiyao project for 7000 million US dollars? It's a nice thought!"

Although the rural grassroots drugstore project is somewhat similar to the original Momo Baizha, both of them follow the "small but fine" low-cost route, and there are only 503 outlets at present, but you have to know that these 503 outlets are only the results of the first phase. As long as this path can be proven to be feasible, it will only take a few minutes to expand to more than 2000 outlets in the second phase; as long as it can obtain policy support from the province, it will not be difficult to exceed 5000 outlets in the third phase... Don't forget, because it follows the route of being small and fine and is established based on rural health clinics, the construction and operation and maintenance costs of a single Momo Baiyao outlet are less than 1/6 of similar outlets in cities.

Investing 7000 million USD in a project with only 503 small and medium-sized terminal outlets is certainly a huge overkill, but if the outlets of this project can exceed 5000 in the near future, it will definitely not be considered a loss... Yang Mo is very sure that Sankyo Co., Ltd. has definitely seen how much importance he attaches to the Momo Baiyao project, so it has hurriedly reported such a "super high price" that is enough to shock everyone, but in fact it can only be regarded as a fair transaction.

If it were any other project and Sankyo Co., Ltd. offered a fair price, Yang, who was in urgent need of money, would have just accepted it. After all, the 33.5% stake only gave the other party a greater voice and veto power, thus making them truly strategic partners who would advance and retreat together. The operational dominance was still in his hands, so it was not a big loss.

But Momo Baiyao is different. It cannot be simply viewed as a commercial project. It also carries the visions of Yang Mo and Tugou. Therefore, no matter what, Yang Mo does not want to be constrained by anyone in the operation of this project... especially by an island country enterprise.

On the other end of the phone, Miss Mu was silent for a moment, then reminded softly, "President Inoue told me that Europe and the United States have begun to contact some companies including Shenzhen Zhonglian Guangshen Pharmaceutical Co., Ltd., and have invited their leaders to Europe and the United States to investigate the operation model of the modern drugstore chain project... If we cannot accept this cooperation initiative, not only will it be difficult for Sankyo Co., Ltd. to find a suitable reason to withdraw a large amount of merger and acquisition reserves, but their future investment focus is also likely to move south."

Hearing this somewhat naked threat from a certain old man, Yang Mo sneered on the spot.

Cut~!

Who are you trying to scare?

Not to mention that due to some unique environmental reasons in China, the focus of island countries' investment projects, especially in the pharmaceutical industry, is basically placed in the north; China itself, in the field of pharmaceutical research and development and production, also shows the characteristics of "heavy in the north and light in the south".

Abandoning the north where pharmaceutical companies are concentrated and the industrial chain is already very mature, especially North China among the “Three Norths”, the focus of investment has shifted to the south... This may be used to scare people who don’t know the business, but if you want to scare Yang Mo, a reborn person, you’re dreaming!

Unless Sankyo Co., Ltd. only plans to engage in the medical device business in the future, they will never abandon Qilu and shift their investment focus south to compete head-on with the European and American capital that is in the limelight!

You have to understand that the pharmaceutical industry is not the retail industry. Technology is the key to seizing the ecological niche. Pharmaceutical companies like Sankyo Co., Ltd., which can only be barely regarded as multinational companies, their real foundation is clinical drugs and special targeted drugs in some fields. In order to seize those pharmacy terminal projects that can only add a small number to the financial statements, they shift their investment focus to the south... If they really do this, the day of corporate bankruptcy will not be far away.

Miss Mu on the other end of the phone heard her man's reaction and was immediately confused: "Are you saying... Sankyo Corporation is trying to scare us?"

"But the question is, since drugstores are not that important to them, why did President Inoue offer such an exaggerated price of $7000 million?"

Yang Mo changed his posture, clamped the microphone under his neck, and then popped out a cigarette to light it: "That's because the Momo Baiyao project led by Dahua Company is not a traditional pharmacy chain project at all!"

“Although the direct commercial returns of this project cannot be compared with those chain drug stores established in cities in the south, and are even more different from those pharmacies and drugstores in the island country itself;”

“However, in terms of other potential values, especially the strategic industry access value for foreign companies, those ordinary city drugstore chains are far from being comparable to the Momo Baiyao project;”

"So, this is why that old man Inoue asked for $7000 million... They don't just want voting rights and veto power for this project, but an opportunity to get involved in China's CXO (pharmaceutical outsourcing) track in all aspects!"

An opportunity to fully participate in China's CXO track!?

Miss Mu was shocked. Even those who didn't know much knew what it meant for the island companies, which had overwhelming advantages in funding and technology, to fully participate in the CXO track... Not to mention the steel, electricity, automobile, machinery and other industries, just their oil system had suffered similar losses in the field of drilling equipment and smelting equipment over the past few decades.

After a moment of silence, Miss Mu on the other end of the phone finally responded: "Yang Mo, what do you mean...?"

Yang Mo snorted softly: "Yes, it's just what you think."

Miss Mu gasped: "You mean... they value the uniqueness of those grassroots rural people?"

Yang Mo sneered: "That's right, the so-called position must be correct, and the starting point must be difficult for people to refute... These island companies have been dealing with China for so many years, and they have already understood the situation in China thoroughly."

Once Sankyo Co., Ltd. holds more than 33.3% of the shares and becomes the major shareholder of the Momo Baiyao project, there will be too many problems that it can solve.

In the pharmaceutical industry, especially for clinical drugs, distribution channels have always been a crucial issue. After all, except for a small number of special targeted drugs that have no alternatives, most clinical drugs are prescribed by hospital doctors... Even in pharmacies in island countries and pharmacies in Europe and the United States, either a doctor's prescription is required, or the store's practicing physician personally prescribes it. Without these doctors, your drugs will not be sold at all, or they will not be known at all.

Therefore, a major difference between the Momo Baiyao project and other domestic chain drugstores is that the Momo Baiyao project is established based on rural health clinics. Momo Baiyao outlets can be regarded as the second pharmacies of these health clinics.

As we all know, although their medical skills are not as good as those of doctors in Class A hospitals, doctors in community clinics and rural health centers all have the right to prescribe medicines - for many prescription drug merchants, this alone is enough to kill 99.99% of the current domestic chain pharmacies in seconds.

Therefore, once Sankyo Corporation becomes the major shareholder of Momo Baiyao, and a major shareholder with voting rights and veto power, it is reasonable that the prescription drugs they produce will be put on the shelves of Momo Baiyao, and then appear on the prescriptions issued by doctors in those health centers, and pushed to those grassroots patients in rural areas... Don't forget that Sankyo Corporation has several joint venture pharmaceutical factories in Shandong and does not need to go through the approval and listing process for imported drugs.

Of course, there is a problem here. Although they do not appear on the shelves as imported drugs, they are not included in the medical insurance after all!
Anyone who has worked in this industry knows that no matter what country it is in, unless it is an irreplaceable special targeted drug, a drug that cannot be covered by medical insurance has no future!

The consumer group that Momo Baiyao targets are all rural people with weak spending power, most of whom don’t even have medical insurance, which makes it even more hopeless.

Don’t be impatient, the uniqueness and value of this group will be revealed at this time.

It's very simple. Sankyo Co., Ltd. can now organize a large-scale public welfare activity under the guise of "Sino-Japanese friendship" and in the name of "caring about the health of the grassroots people in rural China."

Pay the local authorities to organize a large number of doctors from Class A hospitals to provide free medical consultations in rural areas, and then take the initiative to bear the costs of all medicines for common diseases, and settle the bill with Momo Baiyao afterwards... Anyway, since there are fewer intermediate circulation links in the middle, the cost of the medicines purchased by Momo Baiyao is not really high, and among them are a large number of medicines produced by Sankyo Co., Ltd.'s joint venture pharmaceutical factory. All in all, the actual expenses of the activity are really a drop in the bucket for a pharmaceutical company of this size, and it is definitely an example of thunder with little rain.

Of course, the Japanese are not Chinese, so how can they do good deeds without leaving their names?

Don't worry, all kinds of media will definitely be invited to report extensively, and all kinds of ghostwriter articles will be flying around. Under the banner of Sino-Japanese friendship, Sankyo Co., Ltd. will definitely be regarded as a positive example and praised like the coming of the Son of God.

Well, now that it has come to this, the representatives of the island nation will have to negotiate with China. The good thing has been done, and the publicity has been done. Do you think we can include some of Sankyo Co., Ltd.'s common prescription drugs in your country's medical insurance coverage?
Well, now that things have come to this, what else can we say? Most likely we can only pick and choose, and select a dozen or twenty common prescription drugs to include.

OK, as long as Sankyo Co., Ltd. can include a dozen or twenty commonly used and relatively low-priced prescription drugs in medical insurance in the short term, it will be ahead of more than 80% of foreign pharmaceutical companies and will have a good foundation for conquering the Chinese urban market.

But this is not the end.

You know, China has always implemented a three-level diagnosis and treatment system, that is: when rural people are sick, they will first go to the health center in their village or township for treatment; if the health center cannot cure them or is not sure, they will recommend them to go to the county hospital for treatment; if the county hospital cannot cure them, they will recommend or transfer them to the city-level Class A hospital. So in this process, the benefits of prescription drugs taking root at the grassroots level are revealed. Under normal circumstances, unless it is determined that the drug is not effective enough, or the side effects will have an adverse effect on the patient's later treatment, many doctors will not arbitrarily and completely overturn the treatment plan of lower-level doctors... Everything is for the sake of safety.

This approach has no special significance for most domestic medicines, but it is different for those pharmaceutical factories jointly owned by Sankyo Co., Ltd. and Huaxia... To be frustrating, who made it so that the drugs produced by these joint ventures, whether they are original drugs or generic drugs, are more effective than most domestic drugs of the same type?

Choose the best one. In higher-level hospitals, drugs with better performance will naturally not be easily replaced by attending physicians.

So over time, this will lead to a phenomenon. Due to the high frequency of drug name retention, even county and city-level doctors will unconsciously consider using drugs produced by the joint venture pharmaceutical factory of Sangong Co., Ltd. when prescribing drugs... In the words of later generations, this is called data screening + path dependence, just like the doctors in the health clinics in the 1970s and 1980s who liked to prescribe daqingmycin and tetracycline right away.

Obviously, this phenomenon will only become more and more obvious as Sankyo Co., Ltd.'s joint venture pharmaceutical factory in China also begins to use chiral catalysts to produce chiral drugs.

Don't underestimate this point, just like in the 1980s and 1990s, everyone had a dent on the back of their butt caused by penicillin. When this path dependence has become an experience shared throughout the industry, the market space it creates will be amazing... And the generation of this path dependence, when the quality of products is not much different, is essentially a matter of the fast fish eating the slow fish. If you start planning to enter the market a year earlier or a year later, the results may very likely be worlds apart.

Of course, these are just the benefits that can be seen intuitively, and there are countless benefits that are easily overlooked.

For example, relying on such a large consumer group, after Sankyo Co., Ltd. acquired a stake in Momo Baiyao, it was easy for it to recruit a large number of volunteers at a very low cost and in an open and aboveboard manner to become the first, second and third phase clinical samples for new drugs... The pharmaceutical industry is originally an industry where the fast fish eats the slow fish. If enough clinical reports can be accumulated one day earlier and the original drug can be launched one day earlier, it can first occupy the doctors' cognitive space, and the results will naturally be very different.

For example, after accumulating enough experience and industry influence, Sankyo Co., Ltd. can expand its original CRO business (contract research organization) into an independent CDMO business (contract pharmaceutical development and manufacturing company) by combining its own advantages, and provide pharmaceuticals to other domestic pharmaceutical companies and biotechnology companies, especially innovative process research and development and preparation, process optimization, registration and validation batch production and other customized research and development and production services... If they really reach this stage, then even if they have completely established a foothold in China, they can even build a huge interest alliance through the solid CDMO business, making them a real industry lurker.

However, all of this is based on the fact that they can successfully acquire shares in Momo Baiyao.

Without tens of millions of grassroots rural people, even if their public welfare activities are vigorous, they will find it difficult to include some of their drugs in China's medical insurance due to lack of a foothold... Without medical insurance, their conventional clinical drugs, no matter how superior their quality is, will find it difficult to pry open the urban market in the short term;

Without the full support of Momo Baiyao, even if their clinical drugs were barely included in the medical insurance, it would be difficult to try to make doctors in urban hospitals form path dependence through repeated reminders and data retention;

Without the cover of Mo Mo Bai Yao, it would be even more impossible for them, as an island pharmaceutical company, to gather a large number of volunteers with low overall costs (including compensation) in a short period of time, so that they can accumulate enough clinical samples in the shortest time and then launch original drugs one step ahead.

In short, if you carefully sort out the key points, you will find that if you do not have very good relations and influence among the grassroots masses in rural areas, and if you do not have extremely strong administrative resources to support you, even if the above steps are told to you in detail, it is just a PPT full of YY colors, and you simply cannot do it.

Therefore, investing in Momo Baiyao is just a superficial phenomenon. What Sankyo Co., Ltd. really cares about is...

The millions or even tens of millions of low-income rural groups that seem insignificant but are actually of great significance; Dahua Company's good rural grassroots relations and influence that are extremely rare elsewhere; and Dahua Company's administrative resource potential in Dezhou, Lanling, and even in the province that cannot be underestimated.

And this is actually the real reason why Sankyo Co., Ltd. is willing to pay 7000 million US dollars to purchase 33.5% of Momo Baiyao’s shares. Business is not a game of numbers in the account books. If you don’t know the priorities, you will only die a miserable death.

what?
You said that China and Japan are in their honeymoon period now, and China is very fond of the capital of the island country. A multinational pharmaceutical company like Sankyo Co., Ltd., which is a very large company, can try to take the upper route... Once the upper route is successful, everything will be solved. Is it necessary to work so hard to haggle with Yang Mo all day long?

Ok……

Let me put it this way, if you have one or two friends around you who have a little more social experience, then your friends will definitely tell you that if someone keeps telling you "he knows XXX" all day long, or keeps talking about high-level information all day long, then you should treat him as a liar and be on your guard against him.

The reason is very simple. In most cases, the high-level route does not work at all. It is impossible for others to keep an eye on such a small matter as yours all day long... If you want to do things thoroughly, the links you really need to open up are actually those middle-level core members who are in key positions.

And Dahua Company is the core middle-level manager who is at the key point in this matter!
………………

Miss Mu naturally knew that her man had always had his own ambitions in the CXO field, otherwise he would not have first launched Lu Shiwei, then promoted the Sino-Japanese joint research of chiral catalysts, and then launched Momo Baiyao.

Therefore, when she heard that the real goal of Sankyo Co., Ltd. was actually to get involved in the CXO industry in Qilu, she knew that Yang Mo would never agree to the other party's conditions.

He sighed with some regret: "In this case, there is no hope for President Inoue. It's rare that you asked me for help, but in the end..."

Hearing the disappointment in Miss Mu's tone, Yang Mo comforted her, "You don't need to be too disappointed. Don't look at how tough that old man Inoue is talking to you. But even if I refuse their investment, I guess he will still promote the merger of the two generic drug factories in Laos and help us borrow some funds... Although as he said, the investment value of these two pharmaceutical factories is not high, and the merger reserves he can set aside are unlikely to be much."

Miss Mu was stunned: "They will still help? This... is unlikely, right?"

Yang Mo curled his lips: "How is it impossible? Those old foxes in the island countries are much smarter than you think, and their social skills are no different from those of China... Although the NAFTA agreement has not made any breakthrough progress, they will always leave a way out for themselves, right?"

"If the NAFTA agreement really brings Mexico in, then the United States and Canada will be close to replacing the island country's products... If they really offend us at that time, it will not be so easy for Sankyo Co., Ltd. and other companies in other industries to use our Chinese companies as a springboard to enter the Mexican market."

Miss Mu thought about it and nodded, agreeing with Yang Mo's point of view: "If that day really comes, we will have to settle the old accounts with them, but aren't you short of funds now... Sankyo Co., Ltd. is obviously not going to help much, so how are you going to solve the rest of the funds?"

With the current prices and the situation in Laos, even if Yang Mo didn't say it, Mu Liya knew that if it was based on normal standards, it wouldn't cost much to merge the two generic drug factories in Laos. A full 1500 million US dollars would be a stretch. Based on the current exchange rate of 5.3:1, this money is not even 1 million RMB... This is far from Yang Mo's minimum funding requirement.

Hearing this, Yang Mo just smiled and said, "It's okay, I'll figure out the rest."

Miss Mu heard the reluctance in Yang Mo's tone and immediately became suspicious: "You come up with a solution? What else can you do?"

Yang Mo took a puff of his cigarette, then stuck the butt into the ashtray: "Look at what you said, how can there be no other way? Come from the people, go back to the people!"

Miss Mu on the other end of the phone was stunned for a moment, then she was shocked: "You mean... you want to go find Old Xi Yan?"

Yang Mo straightened the microphone with a smile: "As expected of the daughter-in-law of our Yang family, she has a sharp mind!"

Miss Mu said in annoyance on the phone, and then there was a hint of incomprehension in her tone: "But, haven't you always had an opinion about Yan Laoxi? Why would you think...?"

Yang Mo sighed: "Who told me to be so narrow-minded and think about fighting on multiple fronts?"

"Right now, both the Urban Property Fund and Dahua Company are in dire need of money. I have already taken advantage of all the companies in Dezhou and Lanling that have a little savings... Although President Liu and the owners behind those white gloves are rich, I don't plan to ask them for money now."

"So after thinking about it, I think only Old Xi Yan can help right now."

At this point, Yang Mo laughed self-deprecatingly: "I admit that I have always been resistant to this guy Yan Laoxi, and I don't agree with his approach to some things... But resistance is resistance, that's my personal problem. Regardless of the fact that Xialiu Sales Agency has always been one of the most important partners of Dahua Company, even if there is no such relationship, it will always make me feel more comfortable if this guy gets some benefits than if the masters behind those white gloves get them."

Miss Mu was silent for a while on the other end of the phone, her tone a little strange: "Yang Mo, there's no need to force yourself. I just realized that even if you don't go to find Old Xi Yan, you can still solve the current funding gap problem."

Miss Mu paused for a moment, her tone somewhat guilty: "If I remember correctly, the representatives of the Lin and Chen families in Nanyang are still investigating in Texas..."

Before he could finish his words, he was interrupted by Yang Mo: "Xiao Ya, I know that the recent events in Nansha, Guangzhou have begun to spread in small circles. I don't want to discuss who is right or wrong, but I emphasize again... My promise to Mr. Lin and Mr. Chen was to let them choose the projects from the list I gave them;"

"That is to say, whether they vote or not, whether they vote more or less, their opinions are fully respected... I don't care what other places think, but as far as I am concerned, this is the minimum attitude that should be given to any patriotic overseas Chinese family."

"So, I won't actively [recommend] some projects to them, and I don't want you to do anything to distract them... Understand?"

Hearing her man's resolute and somewhat stern tone, Miss Mu felt a little complicated, but in the end she could only sigh softly: "Okay, I respect your choice. I will not take the initiative to talk about this matter in front of the island country representatives of the Chen and Lin families."

You just won’t talk about it proactively?
Upon hearing this, Yang Mo hummed lightly without commenting, then gave a brief explanation and hung up the extremely expensive international call.

Leaning gently on the chair, Yang Mo's eyes appeared that rough face as rough as rock.

Yan Laoxi...huh?

(End of this chapter)