With a quick one-two, Actavis ($ACT) has bailed out of its China ventures. Just 10 days after its CEO promised to move out of a market he deemed "too risky," the Dublin-based generics maker has sold off its second business there.
The company agreed to sell its interest in Actavis (Foshan) Pharmaceuticals, its subsidiary based in Foshan, China, to Zhejiang Chiral Medicine Chemicals. That subsidiary operates a manufacturing site in Guangdong, which makes antibiotics, digestive remedies and cardiovascular drugs.
Actavis had already unloaded one business there when CEO Paul Bisaro told Bloomberg that the Chinese market, while promising, is chock-full of obstacles, including unpredictable enforcement by regulators. The company had decided that, given Actavis' relatively small presence there, China wasn't worth the worry.
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| Actavis Pharma President Sigurdur Oli Olafsson--Courtesy Actavis |
In its latest announcement, Actavis says that it will continue to sell products in China, in collaboration with "preferred business partners." Outside China, the company has plenty of other work on its hands; it's in the process of integrating Warner Chilcott, the Irish company it bought last year, and cutting costs and jobs out of the combined operation.
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Actavis is backing away from China as government authorities continue a months-long probe into corruption and bribery in the pharma business. Investigators are targeting several Big Pharma companies, as well as a couple of large Chinese concerns. GlaxoSmithKline ($GSK) is at the center of the scandal, facing allegations that its Chinese executives engineered almost $490 million in bribes to doctors and healthcare providers.
- see the Actavis release
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