The Preferred Biotech Resource in Asia-Pacific
Vol 19, No 07, July 2015
Biotech in China
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EYE ON CHINA
Chi-Med and Sinopharm form China drug distribution and marketing joint venture

Chi-Med, a pharmaceutical and healthcare company based primarily in China, has established a new joint venture with Sinopharm Group Co. Ltd. (Sinopharm). Sinopharm is the largest distributor of pharmaceutical and healthcare products and a leading value added supply chain service provider in China. The joint venture will provide distribution and marketing services to both related and third party pharmaceutical companies in China.

Chi-Med will, through a wholly-owned subsidiary, invest approximately US$9.8 million in cash into Sinopharm Holding HuYong Pharmaceutical (Shanghai) Co., Ltd. (Huyong) for the subscription of 51% of the equity in the enlarged share capital of Huyong, which will mean that Huyong will be consolidated as a Chi-Med subsidiary. The Chi-Med investment will be largely deployed for expanding future commercial activities, particularly in the area of third party drug sales and marketing.

Huyong is a Good Supply Practice (GSP) certified pharmaceutical and healthcare distribution and marketing company that was originally established in 1993 and subsequently acquired by Sinopharm in 2010. Huyong will be renamed as Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Company Limited (Hutchison Sinopharm).

Hutchison Sinopharm will provide a platform for synergy across the China Healthcare Division of Chi-Med by utilizing the services of the approximately 2,800-person prescription drug and over-the-counter drug sales teams of SHPL and HBYS. A major aspect of the Hutchison Sinopharm business strategy will be to provide sales, distribution, and marketing services to major domestic and multi-national third party pharmaceutical manufacturers. It will also provide a broadened sales and marketing platform for HHL's products and potentially the future novel drugs registered by Hutchison MediPharma Limited, Chi-Med's Drug R&D Division.

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