It seems appropriate that 2 more longtime-listed Chinese companies are bowing out of New York as we head into the final days of 2013, with word that shareholders have approved plans to privatize telecoms software maker AsiaInfo-Linkage (Nasdaq: ASIA) and drugmaker Simcere Pharmaceutical (NYSE: SCR). AsiaInfo was the more lively of these 2 de-listing stories, with a narrow majority of shareholders approving a buy-out offer after several months of protest from others who thought the price was too low. Meantime, Simcere’s looming privatization raises the question of what’s next for this neglected company, whose foreign partners include Bristol-Myers Squbb (NYSE: BMY) and Merck (NYSE: MRK). Read Full Post…
US-listed drug maker Simcere Pharmaceutical (NYSE: SCR) must be eagerly looking forward to completing its pending privatization, following the release of its latest quarterly results that show the fast-growing Chinese healthcare market is suddenly losing some of its luster. Simcere is just the latest drug maker to encounter headwinds in China, where fierce competition and strict government oversight are suddenly giving both domestic and foreign drug makers a major headache. Many of those companies were hoping to make big bucks as China rolled out a new national healthcare network to replace its old system where everyone got medical care through their state-run work units. But Beijing is pushing back by showing it aims to get maximum value for its money, and also that it won’t tolerate aggressive sales tactics practiced by many companies. Read Full Post…
A few interesting news bits on the medical front are spotlighting both the opportunities and risks that drug and medical equipment makers face in developing the China market. On the opportunity side, Bristol-Myers Squibb (NYSE: BMY) has announced an expansion of its relationship with Simcere Pharmaceutical (NYSE: SCR) to introduce its drugs into China. Meantime, homegrown medical equipment maker Mindray Medical (NYSE: MR) is also banking on the market’s potential with its newly announced acquisition of a US ultrasound equipment maker. But US drug giant Johnson & Johnson (NYSE: JNJ) is also finding the market contains some risks, as it comes under fire for double standards related to its product recall policies in China. Read Full Post…
A couple of new tie-ups involving major foreign players in pharmaceuticals and computing provide an interesting glimpse at how multinationals are trying to target their China initiatives to be in sync with Beijing’s latest policy agendas. The strategy of working with a local partner isn’t all that new, but in this case what’s more interesting is the targeted approach these two new tie-ups are taking, the first aimed at taking advantage of China’s ongoing massive overhaul of its healthcare system and the second at Beijing’s push to become a leader in cloud computing. Let’s look at the pharmaceuticals deal first, which is seeing Bristol-Myers Squibb (NYSE: BMY) teaming up with local drugmaker Simcere Pharmaceutical (NYSE: SCR) to make and sell a cardiovascular compound in China. (company announcement) The compound was developed by Bristol-Meyers Squibb, but Simcere will make and sell the drug in China, drawing on its strong connections to local regulators and other health care officials. This kind of deal is smart as it gives Bristol-Myers exposure to a coming boom for quality medicines as Beijing signs a series of multimillion-dollar deals to make those drugs available under its ongoing overhaul to make basic healthcare affordable for everyone. The second deal will see faded PC firm Great Wall Computer form a cloud computing joint venture with EMC (NYSE: EMC), the world’s biggest maker of data storage devices. (Chinese article) China has repeatedly said that cloud computing will be a major focus for development in the next few years, prompting a wide range of players to get in on the action, including Huawei and Alibaba. I see no reason why a big western name like EMC should try to get a piece of the action, and indeed, Microsoft (Nasdaq: MSFT) made a similar move last month with its own China-based R&D initiative in the space. (previous post) My only cause for concern with EMC is that Great Wall is hardly a big name in China anymore, and it also has a strong legacy as a state-run company, meaning it might not be the best partner for this kind of venture that calls for a more entrepreneurial approach. But that said, at least I have to credit EMC for being foresighted enough to get into this space while it’s still in the formative stages in China.
Bottom line: New China tie-ups between Bristol Myers-Squibb and EMC with partners in their respective sectors look like smart moves to take advantage of Beijing’s latest development priorities.
The following press releases and media reports about Chinese companies were carried on December 15. To view a full article or story, click on the link next to the headline.
A couple of new tie-ups involving major foreign players in pharmaceuticals and computing provide an interesting glimpse at how multinationals are trying to target their China initiatives to be in sync with Beijing’s latest policy agendas. The strategy of working with a local partner isn’t all that new, but in this case what’s more interesting is the targeted approach these two new tie-ups are taking, the first aimed at taking advantage of China’s ongoing massive overhaul of its healthcare system and the second at Beijing’s push to become a leader in cloud computing. Let’s look at the pharmaceuticals deal first, which is seeing Bristol-Myers Squibb (NYSE: BMY) teaming up with local drugmaker Simcere Pharmaceutical (NYSE: SCR) to make and sell a cardiovascular compound in China. (
