Pharmaceuticals giant Pfizer Inc
We are exploring business development opportunities, including partnerships with local companies that allow us to successfully expand into the generics segment of the market, a Pfizer spokesman said in reply to questions from Reuters.
Pfizer reported over the weekend progress in a planned joint venture with Chinese drug firm Zhejiang Hisun Pharmaceutical <600267.SS> to manufacture and sell off-patent drugs in China and the rest of the world.
The agreement comes as big Western drug companies are expanding their presence in China in the hope of cutting costs and lifting sales with top-selling drugs losing patent protection in Western markets.
Pfizer, which lost its U.S. patent on cholesterol fighter Lipitor - the world's top-selling drug - last November, said the memorandum of understanding with Hisun aimed to increase access to high quality branded generic medicines.
Jason Mann, head of Barclays Capital's China healthcare & pharmaceuticals unit, said the tie-up would benefit Pfizer because Hisun was a leading producer of active pharmaceutical ingredients (APIs) - the key content in drugs.
There is a shortage of top-quality API manufacturers in China. India is a larger base of API manufacturing than China, but Chinese regulations and tax law favour drug manufactured in China. So Chinese API can help penetrate the Chinese market in a more cost effective way, Mann said.
(For Hisun, it's the) prestige of working with the largest, leading pharma company in the world. Also the chance to gain technological and management know-how through the JV. This is a win-win arrangement.
The joint venture, named Hisun Pfizer Pharmaceutical Co Ltd and owned 51 percent by Hisun and 49 percent by Pfizer, will develop, make and commercialise off-patent pharmaceutical products in China and global markets.
Its aggregate investment and registered capital will be $295 million (186 million pound) and $250 million, respectively, Pfizer said.
The Pfizer spokesman added that the joint venture would mainly target the Chinese market, but would not say which among its off-patent drugs it would push strongly into China.
Pfizer said in December it was expanding its research and development team in China and exploring possible collaboration with Chinese research outfits to tap the country's vast talent pool and emergence as a major market
Apart from Pfizer, drugmakers like AstraZeneca Plc
China's prescription drug market, set to be the world's second largest by 2020, is estimated to be worth more than $110 billion by 2015, from $50 billion in 2010, according to various industry researchers.
(Editing by Jacqueline Wong)