Pfizer ($PFE) has taken its relationship with China's Shanghai Pharmaceutical to a new level. Currently cooperating on Pfizer's Prevenar pneumococcal vaccine, the two companies plan to beef up those promotional efforts. They've also signed a memorandum of understanding on another "innovative Pfizer product," covering everything from Chinese government approval to distribution.
Pfizer and Shanghai will also look toward cooperating on manufacturing, R&D or distribution. That additional cooperation might also include an equity investment, presumably Pfizer's cash for Shanghai equity.
"The Chinese pharmaceutical market is very dynamic," Shanghai Chairman Lu Mingfang said in announcing the deal, a classic business-speak understatement. China promises double-digit growth for years to come, at a time when Western markets such as the U.S. and Europe are slowing to a crawl.
"Our intention to explore a range of business opportunities with Shanghai Pharmaceutical is an example of our commitment to expand our presence in China in collaboration with the local industry," Pfizer's Emerging Markets chief David Simmons said in a statement. In other words, Pfizer intends to claim its share in China.
Pfizer is far from the only Big Pharma with the Chinese drug market firmly in its sights. Companies have been announcing new plants and development--think Novo Nordisk with its $400 million plant, or Sanofi-Aventis' $126 million manufacturing expansion--and setting up new partnerships with domestic drugmakers. Novartis bought an 85 percent share of vaccine market Zhejiang Tianyuan, for instance, aiming to make China its No. 3 market. Plus, drug companies have been recruiting hundreds of sales reps to cover more Chinese territory.