Global pharma giants turn to Chinese biotech to tap innovation, valuation growth
Global pharmaceutical giants are doubling down on investing in China’s fast-growing biotech companies given the sector’s huge room for valuation growth, according to speakers at the Global Health Summit, which concluded in Hong Kong on Saturday. “Multinational pharmaceutical companies are shifting their business strategies in China away from asset-heavy operations,” said Xu Chenming, head of the…
Global pharmaceutical companies are increasingly turning to Chinese biotech firms to tap into innovation and drive valuation growth, according to speakers at the Global Health Summit in Hong Kong. Xu Chenming, head of the healthcare group at Citic Securities, noted that multinational pharmaceutical firms are shifting their strategies in China from asset-heavy operations to investing in companies with strong innovation capabilities and deeper integration with Chinese partners.
This investment could help Chinese companies compete on the global stage. AstraZeneca recently established a joint venture with CSPC Pharmaceutical Group to build a manufacturing site in Shijiazhuang, while Mölnlycke formed a joint venture with Zhende Medical to combine business portfolios and co-develop future products. Despite China's growing role in global innovation, Chinese healthcare companies still lag behind their US counterparts in valuations, with only four Chinese healthcare companies worth over US$20 billion compared to 73 US companies.
However, investor appetite for Hong Kong-listed biotech and healthcare stocks has improved, with the Hong Kong capital market making a full recovery.
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