Chapter 756: A goal with potential that is not inferior to Johnson & Johnson

In the venture capital circles of San Francisco, Genentech has a very good reputation. After all, it has only taken less than four years for its valuation to soar from 400,000 US dollars to over 100 million US dollars, and it is on track to go public.

It could be said that if you don't know Genentech, you're not qualified to call yourself a venture capital industry practitioner.

But when the news broke that Polaris Capital had acquired Genentech in a strong takeover and halted the listing process, it immediately shocked the entire circle, and they inquired about the details.

When they learned that Polaris Capital had given a valuation of at least 200 million US dollars, they were all shocked by Polaris Capital's generosity.

Of course, there were also people who secretly sneered at Polaris Capital for being brainless for offering such a high price.

But no matter what they thought, at least one thing was certain:

Northern Star Capital had entered the scene in an extremely dominant manner. All the capital companies in San Francisco knew that there was a new rampaging crocodile in the market.

Xia Yu didn't care what outsiders and peers thought. After the acquisition of Genentech was concluded, he told Peter Lynch to continue recruiting and then quickly launched his second move.

Time was of the essence, and he had to act quickly before someone else got the cake!

This time, he planned to go big, to make the name of Polaris Capital famous in one fell swoop, and at the same time lay the foundations for his own strategy in the field of biopharmaceuticals.

Genentech owned the future.

It had only cost him over 100 million US dollars, and at this rate, he wanted to spend most of the money in his hands. He had no idea when it would be finished, and only one of the giants in biopharmaceuticals could digest a little.

This goal is precisely the future famous Abbott Laboratories.

In the 1980s, when oil was still king, half of the top ten companies in the United States were oil companies.

But in the 1990s, it will be the time for the biopharmaceutical sector to explode.

It will be too late to enter the market then, but now is definitely the right time to enter early.

Because nowadays, the biopharmaceutical sector has not yet exploded, and even the giants in the industry do not have high market values, not even one with a market value of tens of billions of dollars.

It is worth mentioning that the company with the highest market value in the United States is IBM, the giant of the blue sky, with a market value of more than 30 billion US dollars.

Back to the topic, let's talk about the biopharmaceutical field again.

At this time, there are not a few pharmaceutical giants in the United States. The one sitting in the top position is not Johnson & Johnson, the number one in the future, but Merck, with a market value of more than 200 billion US dollars in the future, and Johnson & Johnson is in second place.

Next, there are Eli Lilly, Bristol-Myers Squibb, Pfizer, Wyeth, Abbott and other companies.

Yes, Pfizer was already a powerful company at this time, but it was not one of the world's three major pharmaceutical companies in later years, and Wyeth was not acquired by Pfizer.

Among these companies, Xia Yu set his sights on Abbott, which ranked ninth in the American pharmaceutical industry at this time.

Johnson & Johnson's market value in later years was over 300 billion US dollars, and at one point it exceeded 400 billion US dollars. Pfizer was also hovering around 200 to 300 billion US dollars. In theory, these two companies should have had the greatest potential and should have been the most important targets.

However, after some consideration, Xia Yu passed on both of them.

There was no choice. Johnson & Johnson was backed by a large financial group, and Xia Yu could not afford to offend them. At that time, Johnson & Johnson was developing well, and the financial group, which had no shortage of money, would not sell.

As for Pfizer, Viagra became a global hit in later years, but at that time it was still more than ten years away from being developed.

Moreover, Xia Yu also knew that Pfizer's market value in later years was very high, but that high market value was built up with huge capital. Pfizer was able to get to that position entirely through mergers and acquisitions, otherwise Viagra alone would not have been able to support it.

The history of Pfizer's rise is a history of mergers and acquisitions in the pharmaceutical field. Since 1999, Pfizer has successively acquired Warner-Lambert, Pharmacia, and Wyeth for huge sums of money, acquiring a large number of high-quality branded drugs. Each of these acquisitions can be ranked among the top 10 in the history of pharmaceutical mergers and acquisitions, with a total value of 244.1 billion US dollars!

Among these acquisitions, the acquisition of Warner-Lambert was, before Xia Yu's rebirth, the largest acquisition in pharmaceutical history!

Leaving aside later generations, the current Pfizer is also immersed in diversification and unable to extricate itself, constantly acquiring companies. From the outside, Pfizer cannot be called a qualified pharmaceutical company.

This is because Pfizer only invests 5% in research, far less than Merck and Johnson & Johnson's 9%.

Pfizer's decline lasted for ten years, and it was only after the disadvantages of a lack of scientific research results and new drugs became apparent that it woke up and invested heavily in the research and development of new drugs again.

This is why Xia Yu doesn't want to mess with Pfizer at this time.

Pfizer, which has always wanted to buy, may not necessarily accept his takeover.

In that case, why should he go out of his way to please them?

There is still a long time ahead, and there will always be a suitable opportunity to strike again!

As for why he chose Abbott instead of any other company, it is because apart from Johnson & Johnson, Abbott has the greatest potential!

It was also in the second half of this year that Dr. George B. Rathman, who worked for Abbott, left to establish Amgen, a future multi-billion dollar giant, which is also one of the top ten pharmaceutical companies in the United States.

Then in 2011, Abbott split off a company called AbbVie and listed it separately, and its market value also exceeded $100 billion, making it one of the top ten pharmaceutical companies in the United States.

As for Abbott itself, its market value is also over 100 billion US dollars, and before AbbVie, it was ranked sixth or seventh among American pharmaceutical companies.

If you do the math carefully, Abbott, which now has a market value of only 2.8 billion US dollars, has unexpectedly given rise to three companies with a market value of over 100 billion US dollars, occupying three of the top ten positions among American pharmaceutical companies.

If the three companies are added together, their market value exceeds that of Johnson & Johnson, the strongest American pharmaceutical company in later generations.

Moreover, these three companies did not rise through mergers and acquisitions like Pfizer, but developed step by step. Although mergers and acquisitions were also carried out along the way, they mainly relied on their own research and development.

Their potential is not inferior to Johnson & Johnson's, and their current market value is much lower than Johnson & Johnson's. The key point is that they are not controlled by the top ten American consortia, and it is much more difficult to acquire them than Johnson & Johnson.

Xia Yu would be crazy not to choose it!

Abbott is also very strong in the field of milk powder, and is one of the three giants in the US milk powder market today.

The three giants in the US milk powder market, from largest to smallest, are Wyeth Group, Abbott and Mead Johnson, and the next level is companies like Gerber.

Wyeth Group is superior to Abbott in both the pharmaceutical and milk powder fields, but Xia Yu has not considered acquiring Wyeth Group.

In any industry, it is always easier and less costly to acquire the second-largest company.

Strictly speaking, Abbott is not a pharmaceutical company, but rather a healthcare company, as its products cover the fields of nutrition, pharmaceuticals, medical devices, diagnostics and reagents.

Once the target was set, Xia Yu immediately convened a senior management meeting to re-form the acquisition team and work on the acquisition plan.

At the same time, considering the series of actions that would follow, the number of people in the company at this time was far from enough, so Xia Yu once again urged Korn Ferry to recruit elite talent for Polaris Capital with M&A experience in the fields of biopharmaceuticals, finance, media and high technology.

Acquiring Abbott is a major task, but it is definitely not the only task!