60% of the total revenue is used for marketing and only 8% for R & D. such high sales expenses are rare in the whole pharmaceutical industry. At the moment when the national pharmaceutical industry is cracking down on gold sales and opening the financial supervision storm, this pharmaceutical enterprise held an IPO meeting yesterday (October 31)!
On October 31, the 41st review meeting of Shanghai Municipal Committee of science and Technology Innovation Board of Shanghai Stock Exchange was held, and the application for initial listing of science and Technology Innovation Board of Xiamen Tebao Bioengineering Co., Ltd. (hereinafter referred to as Tebao biology) was reviewed and approved. Previously, the IPO of Tech Innovation Board of Turbo biology was suspended due to the expiration of financial information, and this was the first meeting after it resubmitted its financial information.
The reporter found that the biomedical enterprise, which is mainly engaged in the research and development, production and sales of recombinant protein and its long-term modified drugs, accounted for 60.59% of the operating revenue in the first half of 2019, while the average value of 32 listed companies in the biological products industry in Shanghai and Shenzhen Stock Market was 28.25%, and Tebo biology exceeded the average value by 114%, ranking first!
Where are the high sales expenses?
The prospectus shows that in the first half of this year, the total revenue of Tebao biology is 319 million yuan, and the sales expense is 193 million yuan, including 132 million yuan for academic promotion. In the half year, 1432 academic promotion conferences were held and attended, including 79 large-scale conferences, with an average number of participants of 110, and 43568500 yuan for large-scale conferences. Therefore, the academic promotion fee accounts for 68.2% of the sales expense and 41.38% of the main business income.
According to this calculation, a large-scale academic promotion meeting of 100 people will be held every 2.29 days on average.
Compared with the scale of pharmaceutical enterprises and the holding of large-scale conferences, the proportion of sales expenses of Tebo biology is far higher than that of its peers, and many data are abnormal: the number of products is small and the sales scale is small, but the frequency and quantity of promotion conferences are far higher than the normal level of the industry, especially the frequency and quantity of large-scale conferences are far higher.
It is worth noting that in July, the second inspection bureau of Wuhan Municipal Bureau of Taxation of the State Administration of Taxation issued the decision on tax treatment, and determined that Wuhan nariyang Advertising Co., Ltd. and Wuhan dajingli Advertising Co., Ltd. were from January 2, 2018 to December 31, 2018, and from January 17, 2018 to December 31, 2018, respectively. In the absence of real business transactions, Xiamen Tebao Bioengineering Co., Ltd The company issued 13 copies of general VAT invoices.
On October 30, in response to a reporters interview, turbo Bio said it had not received the above-mentioned general VAT invoice.
In response to the question of why there are false invoices involving TPB, TPB said: we cant understand the motivation of relevant behaviors of the above enterprises.
Sales expense rate in the first half of the year exceeds 60%
In the first half of 2019, the operating revenue of Tebao biology was 318.6772 million yuan, and the sales expense was 193.0824 million yuan, with the sales expense rate of 60.59%.
This data is at the forefront of the biomedical industry. According to the secondary classification of A-share Shenwan industry, 33 pharmaceutical companies listed in biological products have been excluded from the market. In the first half of 2019, Tebo biology ranked behind unnamed medicine only with a sales expense rate of 60.59%. However, as unnamed medicine has been presented with non-standard opinions for two years in a row, after it is eliminated, the sales expense rate of Tebao biology occupies the first place.
In recent years, the sales expense rate of Tebao biology has been in the highest range in the industry. The prospectus shows that from 2016 to 2018, the figures are 54.61%, 62.95% and 59.45% respectively, ranking in the top three in the industry, which also shows that its super high selling expenses are not an accident, but a long-term and continuous state.
During the reporting period, the academic promotion fee increased year by year. In the first half of 2019, the cost has exceeded that of the whole year of 2017, approaching 164.5758 million yuan in 2018.
The cost of marketing academic promotion mainly consists of the cost of academic promotion conference. Take the first half of 2019 as an example, the conference fee for academic promotion of Tebao biology reached 130.9025 million yuan, and other expenses were only 772100 yuan.
The prospectus shows that the cost of academic promotion meeting is the cost incurred and paid to the corresponding service provider by the company for holding academic seminars and hospital department promotion meetings all over the country.
Hold and participate in a large-scale promotion meeting every 2.29 days
How many academic promotion meetings will be held and participated in to form a conference fee of more than 100 million in the first half of 2019? According to the prospectus, there were 1432 meetings in the first half of this year, with an average of 7.9 meetings held and participated in a day.
According to the prospectus, professional chemistry promotion activities are mainly divided into central market Academic Conference (national market), regional market Academic Conference (provinces, cities, regions) and other professional chemistry promotion activities. Among them, the central market academic conference includes large-scale academic promotion conference, as well as national related academic annual conference to hold special academic seminar, etc. The regional market academic conference includes hospital meeting, department meeting, various regional society meeting, city salon, etc.
In response to the inquiry, turbo biology divides the central market academic conference into two categories: large-scale academic promotion and special academic promotion. The regional market academic conferences are divided into regional academic conferences, urban conferences and academic conferences, which are counted separately.
The reporter compared the number and amount of different types of conferences of Tebo biology with the enterprises in the biomedical industry and found that the number of large-scale academic promotion conferences of Tebo biology was significantly higher than that of peers.
In contrast, in 2018, micro core biology held three international academic exchanges and one professional academic exchange. In the first half of 2019, Nanxin pharmaceutical held 13 national academic education seminars, and gibel held 37. In the first half of 2019, Salem biology held 16 academic promotion conferences of all types.
Data chart, image and text are irrelevant. Photo source: Photo Network
Experts should be invited at least one month in advance for large-scale meetings
The reporter interviewed a number of pharmaceutical companies and professional conference companies in the biomedical industry and learned that large-scale academic promotion conferences have requirements on the number of people, venue, especially doctor invitation, and they generally need full preparation and coordination in the early stage.
In this case, Tebo biology holds large-scale conferences frequently. How long does it take to prepare in advance to achieve such a frequency? Do you have the ability to hold such a high frequency conference? How to invite doctors to participate in large-scale academic promotion conferences frequently? How long in advance do you usually communicate with your doctor?
As for the above-mentioned issues related to academic promotion, treble biology responded to the reporter that the period expense analysis and other parts of Section VIII Financial Accounting Information and management analysis on page 400 of the prospectus (the last draft) are explained in detail, please refer to them.
However, the reporter found that there was no detailed content to answer the above questions.
In order to understand the overall rhythm of the industrys preparation for large-scale meetings, the reporter interviewed a number of people in the industry and found that there are many questions about the pace of the meeting.
Liu Hua (pseudonym), a salesman of a domestic pharmaceutical enterprise, told reporters that in general, a national conference or provincial conference held or participated by pharmaceutical enterprises with more than 100 people can be called a large-scale academic promotion conference.
Some executives of domestic pharmaceutical enterprises told reporters that the preliminary planning of large-scale academic promotion conference includes many links. First, according to the number of people to book the venue and site layout, material production, invited experts, air tickets accommodation booking. More specifically, it also includes the setting of meeting themes and links, host crosstalk, etc., which all need time.
My company is planning a large-scale academic promotion conference for the second year in the previous year, Liu said
Treble biology also said that the companys marketing center will formulate the overall direction and annual promotion plan of academic promotion according to the medical development in the field of the companys drugs every year, and formulate the academic promotion theme, academic promotion plan and relevant materials.
At the same time, Liu Hua pointed out that for the planned conference, it is generally 4-5 months or even half a year in advance to officially enter the preparatory stage. Generally speaking, no more than four large-scale academic promotions will take place in a year.
Holding a large conference is a great investment for pharmaceutical companies, so we hope to invite more doctors. He said that the main target of academic promotion is doctors, so the participants are mainly doctors. Generally, the number of doctors in large conferences accounts for 60%.
We invite doctors, at least for more than a month. Liu Hua said.
According to the sales director of a pharmaceutical company in China, it is difficult to invite experts to hold several large-scale meetings in a short time. He told reporters that preparations for large-scale meetings usually need to be made more than two months in advance. For meetings of 100 people, experts are usually invited around 80. The doctor with the best relationship should contact at least one month in advance so that the experts can arrange the time. Experts cant wait for a meeting when theyre all right. The sales director said that sometimes the number of experts in a product line and a province is very limited. At the same time, it is more difficult to bring experts from several provinces together, which requires more preparation time.
He pointed out that if such self-organized large-scale meetings want to be held frequently, it means that they need to be prepared and held constantly. But no one is fighting with iron. They all come to fight with iron. The body cant bear it.
According to the sales director, the company can host at most two national conferences in a year. In our clinical practice, we have organized a meeting of 100 people. Experts are invited three months in advance. Preparations for the meeting will start six months ago. He said.
Compared with fully self hosting, pharmaceutical companies said that the preparation of satellite fair would be simpler in terms of venue selection, but the difficulty of coordinating expert time is still not small.
The so-called satellite meeting is a sub forum held by pharmaceutical enterprises in large-scale meetings organized by industry associations and other organizations. The above-mentioned sales director told reporters that the conference organized by the industry association has a larger scale. Sometimes many pharmaceutical enterprises participate in the conference, which involves the competition of expert resources. It is more necessary to seize the opportunity with expert invitation in advance. We are all experts. Said the sales director.
In half a year, only large-scale meetings can be held and participated in 79 times, with an average of 2.29 days, which can be described as high frequency.
Wu Bin (pseudonym), former director of conference and activity Department of a well-known PR company in China, told reporters that according to his understanding, a large pharmaceutical enterprise can carry out a large-scale academic promotion activity in two or three days, which is directly related to the companys product line, the sales personnel of marketing department and corresponding products all over the country and the large number.
According to the information disclosed by the reporter, the multinational pharmaceutical company has 10000 employees in Greater China, and its sales in China in 2018 exceeded 20 billion yuan.
Four biotechnological products for treatment have been developed and completed, including pegobin, Teli, teljin and telkang. As of the first half of this year, there were 731 employees, including 341 sales personnel, accounting for 46.65%.
Data source: Tebo bio prospectus (last draft)
Some sales management of domestic pharmaceutical enterprises told reporters that some well-known domestic pharmaceutical enterprises also have the conditions to hold several meetings of 100 people in a week, which is related to the appeal and influence of enterprises.
The reporter noted that the company mainly relies on its own marketing team to organize academic promotion meetings. In areas where the marketing team is unable to cover temporarily or when the marketing staff is short, the company chooses to entrust a third-party conference agency to assist in academic promotion. During the reporting period, the company entrusted Hefei funiku Business Service Co., Ltd. to hold a special academic promotion meeting.
However, since 2016, the total number of meetings entrusted by Tebo biology to funiku is only 28, accounting for 0.57%, and they are all special promotion meetings.
From the perspective of financial data, turbo bio has no partners with large amount of cooperation in the field of academic promotion. From January to June 2019, the top five payment objects of the companys academic promotion fee are Xiamen gaojieda Travel Agency Co., Ltd., Hefei funiku Business Service Co., Ltd., Hong Kong China Travel (Xiamen) International Travel Agency Co., Ltd., China Hepatitis Prevention Foundation and Shanghai Wonderful Holiday International Travel Agency Co., Ltd., with the amount of 2.795 million yuan, 1.24 million yuan, 1.2337 million yuan and 864700 yuan, respectively RMB 786100, accounting for 2.12%, 0.94%, 0.94%, 0.66% and 0.60% of the academic promotion fee respectively.
Once involved in the case of falsely issuing VAT invoices
In addition, a decision on the tax treatment of false invoices has also challenged Tebo bio.
In June this year, the website of the Ministry of Finance announced that it was decided to organize some supervision and administration bureaus and local finance departments (bureaus) to carry out the inspection of accounting information quality of the pharmaceutical industry in 2019, among which 27 A-share listed pharmaceutical enterprises, such as Fosun Pharmaceutical, Hengrui pharmaceutical and Bubu pharmaceutical, were listed in the list.
A certified public accountant explained to the reporter that if a pharmaceutical enterprise has grey expenditure, it must be disbursed in the statement in any case. It needs some items to be included in the statement, and it also needs some bills to support it. Therefore, the enterprise should add large expenditure to the normal expenditure in the statement. Generally speaking, pharmaceutical enterprises may indeed spend money on some items, but they do not spend so much on statements. The extra part may be used for other purposes, such as pharmaceutical rebate, which is not allowed.
In July, the second inspection bureau of Wuhan Municipal Bureau of Taxation of the State Administration of Taxation issued the decision on tax treatment, confirming that Wuhan nariyang Advertising Co., Ltd. and Wuhan dajingli Advertising Co., Ltd. issued 13 copies to Xiamen Tebao Bioengineering Co., Ltd. from January 2, 2018 to December 31, 2018 and from January 17, 2018 to December 31, 2018, respectively, without any real business transaction VAT general invoice.
In response to the reporters interview, turbo Bio said, upon the companys financial verification and confirmation, our company has not received the general VAT invoice issued by Wuhan Nari ocean Advertising Co., Ltd. and Wuhan Da Jingli Advertising Co., Ltd. from January 2018 to December 2018.
Source: editor in charge of daily economic news: Yang bin_nf4368