) and Chinese pharmaceutical company, Zhejiang Hisun
Pharmaceuticals, recently announced the launch of their joint
venture (JV) - Hisun-Pfizer Pharmaceuticals Co., Ltd. The joint
venture, Hisun-Pfizer, will focus on the development, manufacture
and commercialization of off-patent products in China and across
Pfizer and Hisun had signed a memorandum of understanding (MOU)
in June 2011 for the establishment of the joint venture.
Hisun-Pfizer, which has a registered capital of $250 million, has a
total investment of $295 million. While Hisun has a 51% share in
the joint venture, Pfizer holds the balance 49%.
The joint venture will focus on providing more patients with
high-quality and low-cost medicines in the branded generics
segment. Off-patent medicines, including branded generics, are one
of the fastest growing segments in the global pharma market,
especially emerging markets. China represents significant
commercial potential with branded generics representing 70% of the
domestic pharma market.
The joint venture will focus on cardiovascular disease,
infectious disease, oncology, mental health, and other therapeutic
areas. While Hisun will contribute a strong product portfolio, wide
market reach and expertise in the production and commercialization
of branded generics, Pfizer will provide the joint venture with its
research and development, marketing and manufacturing
We currently have a Neutral recommendation on Pfizer, which
carries a Zacks #3 Rank (short-term 'Hold' rating). While the
setting up of the joint venture will help transform Hisun into a
branded generics company from an an active pharmaceutical
ingredients manufacturer, Pfizer should be able to strengthen its
presence in China.
We note that several pharma companies have been working on
expanding their presence in emerging markets especially China. Some
) joint venture with
) for the development and commercialization of MEDI5117 in China,
) acquisition of Beijing Skywing Technology Co., Ltd. and
) acquisition of a majority stake in Chinese vaccines company
Zhejiang Tianyuan Bio-Pharmaceutical Co., Ltd.
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