Pfizer ($PFE) and its new Chinese partner, Zhejiang Hisun Pharmaceutical, met for a ceremonial document-signing in Los Angeles, ratifying their plans for a joint venture in one of the world's fastest growing pharma markets. And if Pfizer has its way, it will soon hook up with other drugmakers in China, too.
The JV, dubbed Hisun Pfizer Pharmaceutical, will be majority owned by the Chinese company. Zhejiang Hisun will put in $295 million for 51% of the venture, while Pfizer will contribute $250 million for the remaining 49%. Both companies are likely to contribute products, manufacturing infrastructure, and other assets once the partnership becomes official, Pfizer said in a statement.
Analysts said Hisun specializes in active pharmaceutical ingredients, so allying with the company gives Pfizer a better opportunity to dig into the Chinese market. "There is a shortage of top-quality API manufacturers in China," Barclays analyst Jason Mann told Reuters. "...Chinese regulations and tax law favor drugs manufactured in China," he added. "So Chinese API can help penetrate the Chinese market in a more cost-effective way."
Pfizer is now eyeing other ways to capture Chinese market share. "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 spokesman told Reuters. The company wouldn't say which of its off-patent drugs it's earmarking for the Chinese market.
- check out the Pfizer release
- read the Reuters news