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…
I’ve written lots about the huge potential that China offers for drug makers as Beijing rolls out a multibillion-dollar reform of the country’s medical system. But there’s also huge potential for medical equipment makers, whose devices will fill the thousands of smaller local clinics being set up as part of a massive national plan to provide basic medical coverage to hundreds of millions of Chinese who lack access to such services. That potential was on display with the announcement by US-based Medtronic (NYSE: MDT), one of the world’s top medical equipment suppliers, that it would buy New York-listed Chinese peer Kanghui Holdings (NYSE: KH) for a nifty $816 million, in what looks like the biggest acquisition of a Chinese medical device firm by a western company.
Global drug makers like Merck (NYSE: MRK) and Bristol-Myers (NYSE: BMY) have been piling into China’s drug market over the last few years in a bid to take advantage of huge new opportunities presented by the nation’s ongoing health care reform, even as growing signs emerge that risks also exist alongside the potential to make money. The latest of those risks was recently on display in the nation’s patent office, where an intellectual property law was modified to make it easier for Chinese companies to make generic versions of drugs that otherwise would still receive patent protection. (
more focused on sales and marketing, setting them apart from previous efforts that were mostly focused on using China as a base for cheap manufacturing. Both are aimed at capitalizing on an expected spending bonanza that will see China spend billions of dollars each year to provide basic healthcare to its less affluent majority under an ongoing reform plan. One interesting difference here is that Merck has found its partner in a smaller New York-listed company with market cap of about $600 million, whereas Pfizer’s partner is listed in Shanghai with a larger market cap of around $3.2 billion. I tend to like the smaller, overseas-listed companies like Simcere as they are often more entrepreneurial and adaptable to market conditions. Bigger, Shanghai-listed firms like Hisun tend to have better connections, which are obviously important in this major government-led overhaul of China’s health care system. But they also tend to move more slowly, and their decisions are often based as much or even more on non-economic considerations as they are on what’s best for business. Still, both of these partnerships look good to me in light of China’s health care reform, and investors clearly like the Simcere deal, bidding its stock up nearly 5 percent in Friday trading.
