Chinese drug majors look to the West to build brands
In China, large drug manufacturers are seeking partnerships, mergers and acquisitions with Western companies, writes Asia correspondent A Nair
In China, large drug manufacturers are seeking partnerships, mergers and acquisitions to build their brands. Examples include Hisun Pharmaceutical Company, which set up a joint venture with US-based Pfizer, and the Simcere Pharmaceutical Group, which has established a partnership with Merck & Co in the US and Canada, and Bristol-Myers Squibb.
Moreover, Chinese biotech company Sino Biological has reached an agreement with Life Technologies for a protein product distribution and development project, while Shanghai Fosun Pharmaceutical Group has become the largest single shareholder in US-based medical care company Saladax Biomedical.
For some time now, Chinese drug majors have been looking towards the West. Most companies are using the measure as a shortcut to go global. As one analyst pointed out: ‘Hisun got a breakthrough in China's drug industry by taking a controlling stake in the joint venture with Pfizer, the world's largest drug-maker by sales. Hisun has a 51% share in Hisun Pfizer Pharmaceuticals, with a total investment of US$295m and registered capital of $250m. Pfizer holds the remaining stock.’
The joint venture focuses on the manufacturing and commercialisation of branded generics in China and around the world. The operational revenue of the joint venture is expected to exceed CNY2bn ($162m) soon, according to Wu Xiaobin, country manager of Pfizer China.
The joint venture of Simcere Pharmaceutical Group, on the other hand, is to concentrate on therapies for cardiovascular diseases. While Simcere holds a 49% stake, it contributed two medicines specifically tailored to Chinese patients. Merck & Co is to provide four of its off-patent, innovative drugs. Simcere has strong R&D in biopharmaceuticals and had earlier teamed up with US-based Bristol-Myers Squibb. The latest venture involves the co-development of a preclinical molecule inhibitor, which is currently inactive in Bristol-Myers Squibb's portfolio. If successful, this research will help prevent cardiovascular disease.
Since 2011, many innovative blockbuster drugs have begun to come off patent, providing a good opportunity for domestic Chinese companies to may hay while the sun shines.
