Inspection (Part Three)

A peculiar smell permeated the pharmaceutical factory.

Shen Qi didn't mind at all; in fact, he even felt a sense of familiarity, because it smelled like his own pharmaceutical factory.

Old Shen completed his industrial transformation, transitioning from an auto parts factory owner to a pharmaceutical factory owner.

Old Shen wasn't really sure if he could manage Ou Beiqi Pharmaceutical well, so he asked his son to come back and investigate.

The original boss had already left. Accompanying the Shen Family father and son on their inspection of the pharmaceutical factory was the manager, surnamed Qiu, a small old man in his fifties.

Ou Beiqi Pharmaceutical has production lines for injections, tablets, capsules, and solid dosage forms.

This pharmaceutical company is classified as a small to medium-sized company in terms of sales volume, but its production scale is by no means small.

With such a production scale, annual sales were only a little over 10 million RMB. This was unsustainable, so the original owner, who was bleeding money out of his pocket, quit and resolutely transferred Ou Beiqi Pharmaceutical to the unfathomable Shen's Consortium.

The workshop is still operating and has not stopped production despite the change of ownership.

In reality, many frontline employees are unaware that the boss has changed.

Manager Qiu had already found out that the new boss, Shen Zhishan's only son, was the renowned scientist Shen Qi.

On paper, Shen Qi has no connection with Ou Beiqi Pharmaceutical, but after Manager Qiu got to know Shen Qi for a short time, he discovered that the young Boss Shen, had more say.

Mr. Boss Shen, seemed to know a lot about the pharmaceutical industry. Manager Qiu said as they walked, "Boss Shen, as you can see, our factory has a large production scale and is a legitimate factory. The reason we've ended up like this can be summed up in four words: poor management."

"Indeed," Shen Qi said. He liked Manager Qiu's pragmatic style. "The factory's marketing strategy is problematic. Before this, I had never heard of any of the factory's products. This is because the factory's product structure is messy; they do everything without any focus."

Manager Qiu smiled wryly, "Young Boss Shen, you've hit the nail on the head."

Ou Beiqi Pharmaceutical initially only produced chemical drugs. Their first product was an injectable drug for cardiovascular diseases, which was a generic version, but the generic version was quite effective.

For their second product, Ou Beiqi Pharmaceutical produced Levetiracetam and obtained a production license.

Later, Ou Beiqi Pharmaceutical started producing traditional Chinese medicine. To date, Ou Beiqi Pharmaceutical's product portfolio includes 33 drug varieties, with chemical drugs and traditional Chinese medicine each accounting for half. These include cardiovascular system drugs, respiratory system drugs, antibiotics, drugs for clearing heat and detoxifying, drugs for tonifying the kidneys and strengthening yang, and drugs for anesthetics and sedatives. They produce all kinds of products.

That's the problem: a chaotic product structure and no star products.

When it comes to Sino-American GSK, the general public knows their cold medicine Contac.

When people talk about Xiuzheng Pharmaceutical, they immediately think of their stomach medicine, Stada.

As for Ou Beiqi Pharmaceutical, who knows what kind of drugs they make?

Ordinary people recognize brand names when buying mobile phones, cars, and medicines. Who would dare buy a random, unknown brand of medicine?

"I just want to ask, where is the chief Engineer of Levetiracetam's development team?" Shen Qi had limited time, so he focused on the key points in his question.

Before coming to the pharmaceutical factory, Shen Qi had already thoroughly understood the development history, product structure, and marketing situation of Ou Beiqi Pharmaceutical.

Ou Beiqi Pharmaceutical manufactures generic drugs; as soon as other companies' patents expire, they can quickly launch generic versions.

Among all the generic drugs produced by Ou Beiqi Pharmaceutical, Shen Qi believes that the most technologically advanced is Levetiracetam / Midazolam.

Midazolam was first developed and marketed by the international pharmaceutical giant Roche. Currently, only three pharmaceutical companies in China have successfully produced generic versions and obtained production licenses.

Levetiracetam is an anesthetic drug, which is strictly controlled by the state. Due to its special chemical and physiological properties, this type of central nervous system drug can be either a blessing or a curse.

Having secured approval in such a strictly regulated niche market of anesthetic drugs, Ou Beiqi Pharmaceutical originally had the potential to create a Strong Force product, but they ruined it due to their poor marketing management.

The domestic sales of Levetiracetam are currently basically monopolized by a single pharmaceutical company in East China, leaving Ou Beiqi Pharmaceutical and Humanwell Healthcare in an extremely passive competitive position.

Of course, if Ou Beiqi Pharmaceutical had a smooth run and created one or even several star products or monopolistic products, then the Shen's Consortium would have had nothing to do with it.

Shen Qi still wanted to meet the chief Engineer of the Levetiracetam development team, as he felt that this Engineer was a valuable asset.

"Boss Shen, you're joking. Our factory doesn't have any chief engineer..." Manager Qiu was embarrassed and laughed awkwardly. "We produce generic drugs. We used to have a master process engineer who led a few college students and managed to develop Levetiracetam."

"What about the master craftsman?" Shen Qi asked.

"The veteran craftsman has retired," Manager Qiu said.

"Oh, I see." Shen Qi didn't press further and continued his tour of the factory.

After a day of investigation, Shen Qi and his father returned home.

Shen Qi pinpointed the problem. "Dad, we need to be prepared for our factory to lose money every year for at least the next three years."

Old Shen: "I was prepared; I've already had a professional team assess it."

"To stop the losses and reduce the amount of damage, I suggest stopping the production of 30 kinds of drugs. For the next three years, we will only Levetiracetam, Qiang Yang Bao Shen Pill, Liu Wei Di Huang Pill... Sigh, I find it funny as I talk about it. Anesthesia and sedatives, aphrodisiacs and tonics, chemical drugs, traditional Chinese medicines, all mixed together. This product portfolio is too chaotic." Shen Qi touched his forehead. It's so messy.

"The Qiang Yang Bao Shen Pill and Liu Wei Di Huang Pill that we produce are quite effective; I've tried them. Levetiracetam is an anesthetic; I think it was used when I had surgery last time. That was Levetiracetam produced by another company." Old Shen loves what Levetiracetam does, and he quickly adapted to his new role, personally testing the drugs.

Shen Qi continued, "Among our existing products, the three drugs I just mentioned are competitive, especially Levetiracetam, which we are among the top three in the country. If you can do a good job with marketing, you might be able to break even. If we want to be profitable, we must develop original drugs. Of course, developing original drugs is very costly and time-consuming, but I already have a plan."

Shen Qi's idea was to stop producing drugs that weren't competitive. Otherwise, the more they produced, the greater the losses would be.

Within three years, the village's hope rests on three medicines: Levetiracetam, Qiang Yang Bao Shen Pill, and Liu Wei Di Huang Pill. It will be difficult to turn a profit by successfully marketing these three medicines, but we will strive to achieve a break-even point.

Three or more years from now, when our factory's original drug is launched, we may start to make a profit.

Can an original drug save a factory?

Yes, it's possible. It depends on the effectiveness of the treatment and also on luck.

To acquire Lipitor, Pfizer spent over $80 billion to buy Warner Lambert, the company that developed Lipitor.

Of course, Pfizer didn't do business at a loss either; they once sold over $10 billion worth of Lipitor in a single year.

The most crucial question is that Ou Beiqi Pharmaceutical doesn't even have a research and development department; its generic drug production is handled by its process technology department. So where do its original drugs come from?

In fact, Shen Qi had a prototype of an original drug, namely C01C.

A sample of C01C has been synthesized in the Yenching University laboratory, the paper is about to be published, and the patent will be in place soon.

The next step involves a series of tests, the most troublesome of which is the clinical trial.

These tests were conducted by qualified institutions, and Ou Beiqi Pharmaceutical has a dedicated team to follow up on the testing progress.

After conducting the preliminary investigation, Shen Qi returned to Yenching University and personally organized the laboratory synthesis data for C01C.

Here's the problem: Shen Qi produced a C01C sample in the Yenching University laboratory, but the patent ownership of C01C belongs to the state.

Selling the patents held by the university means selling the patent development rights. Shen Qi had previously sold several patents, and he and his team took a portion of the transfer fee, while the remainder was handed over to Yenching University.

In the process of transforming Yenching University's patent C01C into a product of Ou Beiqi Pharmaceutical, Shen Qi will play two roles: firstly, a professor at Yenching University and the inventor of the patent, and secondly, the son of the owner of Ou Beiqi Pharmaceutical.

We need to communicate about this beforehand, otherwise some people might gossip, saying things like, "You, Shen Qi, are using national resources to expand your family business."

Shen Qi found Director Qi of the Yanda Technology Transfer Center and handed Director Qi the C01C documents. "Old Qi, this document is about a new compound. We'll have to trouble you with the patent application and transfer."

"Old Shen, don't be so polite, it's my duty." Director Qi was quite familiar with Shen Qi; he had previously helped Shen Qi obtain several patents.

"Some institutions and companies have a designated supplier bidding system, which means that when a client wants to do a project, they don't go through the usual process of comparing three suppliers, but instead designate one supplier to bid. Does a designated transfer system also exist in the field of patent transfer?" Shen Qi asked.

Old Qi was a smart man; he quickly understood the implication in Shen Qi's words. He patted the file folder in his hand and asked, "Who do you want to transfer this patent to?"

Shen Qi got straight to the point. "Nangang City Ou Beiqi Pharmaceutical Company."

"What's your relationship with this company?" Old Qi asked directly, precisely because they had a good relationship.

Shen Qi calmly stated, "I have no legal relationship with this company."

Old Qi breathed a sigh of relief, "That's no problem. One is willing to buy, and the other is willing to sell; we can arrange a transfer at a designated location."

Shen Qi added, "The owner of this company is my father."

"You call that no relation?" Old Qi seemed surprised, but then he understood. "If you don't own shares in that company, don't participate in its management, and don't hold any position within it, then legally speaking, you indeed have no relation to that company. It's not that complicated. Just clarify things, and sell the patent according to market rates."

"Thanks, Lao Qi, I owe you a favor." Shen Qi made a gesture, which meant, "Come on, I'll treat you to a big drink."

"I'll handle things strictly according to the rules." Old Qi really was handling things strictly according to the rules, but he used flexible handling techniques in the process.

(I wrote over 7,000 words at midnight, but I really can't write 8,000... My eyes are going blind, and my hands are about to break. My mom helped me upload this chapter... Please vote for me...)