Global pharmaceutical giants are doubling down on investing in China’s fast-growing biotech companies given the sector’s huge room for valuation growth, according to speakers at the Global Health Summit, which concluded in Hong Kong on Saturday.
“Multinational pharmaceutical companies are shifting their business strategies in China away from asset-heavy operations,” said Xu Chenming, head of the healthcare group at Hong Kong-based Citic Securities.
“They are moving towards investing in companies with strong innovation capability, as well as deeper integration with Chinese partners,” Xu said during a panel discussion on Friday. The investment “could help Chinese companies grow, pushing them to compete on the global stage”, he added.
On Wednesday, AstraZeneca announced it had established a joint venture with China’s innovative drug developer CSPC Pharmaceutical Group to build a drug manufacturing site in Shijiazhuang, capital of Hebei province.
Under the deal, AstraZeneca will hold a 49 per cent stake while CSPC owns the remaining shares. In its initial phase, the joint venture is expected to focus on manufacturing and supply of products for the global market, with plans to expand its product line in the future.
In May, Swedish wound care and surgical products provider Mölnlycke formed a joint venture with Zhejiang province-based Zhende Medical, a domestic supplier of medical care and protection items, to combine their business portfolios and co-develop future products.