the pharma partners china forum 2015: jan 15/16 san francisco
TRANSCRIPT
Advice + Action for Transformational Growth
+The Pharma Partners
China Forum1-on-1 Partnering Event
San Francisco, USAJan 14-15th 2015
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China Forum1-on-1 Partnering EventSan Francisco, USAJan 14-15th 2015
+ Event Highlights:- Late Stage & Commercial Assets- Drugs, Devices & Diagnostics- Licensing of China rights- Investment from Chinese funds- Pre event diligence & partnering
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Hosted by:
China
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• Commitment by the Chinese government to improve healthcare access is creating millions of new pharmaceutical customers. The market is forecasted to become the world’s second-largest drug market by 2015.
• Domestic pharmaceutical companies are jostling to be the most important and influential: - Those in the Top 20 need to differentiate to compete- Those outside the Top 20 need new avenues of growth to break through
• Both sets have identified international products and technologies as an immediate opportunity to achieve their goals:
- Sales, marketing and distribution is already in place.- Funding of registration costs and clinical studies is not a barrier.
• Massive healthcare funds have been established in partnership with public healthcare companies to inject more capital and speed into the race.
• Navigating the complex and highly competitive market is difficult, once business culture is added it is clear why finding the right partner is the key to successfully tapping the Chinese market.
For more information on the China market, please see slides at the end of this deck.
The TPP China Forum is a first-of-its-kind event.
It will be the first time that so many Chinese dealmakers will be in one building. Not just that, the event has other major attributes others do not:
• Pre-event diligence co-ordinated by a team of bilingual analysts• Pre-arrange meetings with parties having confirmed interest• Independent PhD translators available for every meeting• Cross border business specialists on hand to assist
Whilst the focus is the partnering meetings, there will also be an educational track focused on the Chinese healthcare market, doing business in China, regulatory and clinical requirements, Law & IP and more.
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Why This Event?
Executives who are interested in exploring the massive potential of the Chinese Healthcare market and engaging investors with large amounts of capital to deploy overseas.
• Companies who believe their products should have potential for significant revenue in China.
The event will have coverage with over 300 Chinese pharma companies who are all seeking exciting products to commercialise locally.
• Companies seeking investment for their exciting late-stage drug, device or diagnostic.
Public Pharma companies are seeking ground breaking technologies to help them stand out from their peers. Healthcare funds have $billions of US dollars under management and a mandate to invest in cross-border deals.
Who Should Attend?
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How Will It Work?
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Selection Screening SF Event Shanghai Event
Invited companies provide information for analysts to quickly evaluate China market potential.
Essential data translated into Mandarin. Potential investors or licensors educated by internal analyst team. Likely partnership or deal confirmed.
Matched parties are put into hour long meetings at the China Forum in San Francisco.
Deal signature meetings arranged for follow up event in Shanghai Spring 2015.
Who Is Coming?
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A sample of the companies attending. Over 100 have started the matching process.
TPP Previous Success in China
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Help Ironwood seek strategic partnership in China with its novel IBS/constipation drug Linzess. Ironwood announced partnership deal with AstraZeneca in China. AstraZeneca paid $25M upfront for this partnership.
Help Ipsen seek strategic partnership in China with a late stage asset. Also help Ipsen expand its partnership with KOLs in leading academic institutes in China for early stage collaboration.
Help Icon’s strategic expansion in China through M&A and partnership. Help Icon acquired Beijing Wits in 2012.
Helped the company secure a license deal for ANGIOMAX® (bivalirudin) and CLEVIPREX® (clevidipine) to SciClonePharmaceuticals for total upfront and milestones of >$50m.
Help Stallergenes with two marketed products to develop market entry strategy. Help the company to develop a specific partnership structure including JV, MA to build its presence in China
Helped an Australian biotech company to divest an HIV/HBV compound in preclinical development. The process involved more than four parties to close the deal.
1. Basic Corporate Information2. Product Information Summary3. Registration and Certifications4. Status of Regulatory Filings5. Geographic Distribution Strategy6. Competitive Advantage
Initial Matching Information
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TPP will translate this information into Mandarin for distribution to Chinese attendee’s with known interest.
Only summary information is required in order to get the ball rolling.
Company presentations will be occurring continually throughout and there will be an advisory track. Topics to be discussed.
Deal Structuring. A lot of options, multiple countries, multiple currencies, holding companies, issuance of in multiple markets.
Intellectual property issues. Is China the IP Risk that it has been warned to be?
Holding companies. The role of Hong Kong. Using Structures such as holding companies to oversee investment partnerships offers considerable flexibility for both US and Chinese investors.
Currency movement. To what extent is capital flight a driver in external investment by Chinese investors. To what extent is equity ownership in US companies a factor in the decision to joint venture.
Equity vs. Licensing vs. Cash. How to craft the optimal blend? What are the considerations that factor into the equation for both the Chinese investors and US technology providers.
Educational Content
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Event Organization
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TPP have partnered with OneMedForum to host the China partnering event.They have a long and successful history of bringing together companies and investors.
The TPP event will follow the highly respected OneMedForum, which is held during the long standing JP Morgan week.
2015 will be their 8th Annual Emerging Company Healthcare Conference.OneMedForum has continuously worked to facilitate the discovery of lesser-known companies.Since 2008, over 400 companies have presented at OneMedForum.Almost 300 leading investors have served on panels.
More information can be found here
US Media Partner
Event Fees
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If you are successful in being matched with Chinese investors or distributors, the following event attendance fee will be required before meetings are arranged in SF: $4500
Services to Companies
- Convert presentation to Mandarin.- Circulate summary in China to source appropriate investment partners.- Arrange meetings with pre-screened, capable and interested in San Francisco January.- Distribution to audience beyond the participants. - Listing in the TPP/OneMedChina Catalogue of available US technologies and products.- Ongoing advisory services.- Opportunity to participate in meetings in Shanghai Spring 2015.
Registration
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If you are interested in attending the TPP China Forum, please contact our event partner OneMedPlace.
Derrick LiOneMedConferencesE-Mail: [email protected]: (516)606-6763
Alternatively use the quick online registration survey.
China
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Continued
China will become the 2nd largest market ahead of Japan by 2017 …
2010 rank
1 United States
2 Japan
3 China
2016 rank
1 United States
2 Japan
3 China
2017 rank
1 United States
2 China
3 Japan
*Source : IMS Health Market Prognosis, March 2011
JOINT-VENTURE
IMPORT
LOCAL
25
34
43
20
Billion USD
52
Pharmerging markets
2012-16
Tier 1 (China) 15-18%
Tier 2 11-14%
Brazil 12-15%
Russia 10-13%
India 12-15%
Tier 3 7-10%
Pharmerging 11-14%
Mature markets
2012-2016
US (-1) - 3%
Japan 1-4%
Germany 2-3%
France (-1)-1%
Italy (-4) - 3%
Canada (-1) - 4%
Spain (-8)–(-2)%
UK 2 - 3%
S. Korea (-4) - 0%
Mature 0-3%
Data source: IMS 2012
The Chinese market takes time to build, but the brand value lasts much longer…
Time
US/Europe
China
• In China, brand value will continue to grow for a long time after patent expiration. Ownership of MNC brands are key asset in China TPP
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Example: AstraZeneca China Product Portfolio is still dominant in the Chinese market
Brand
Losec
Betaloc
Plendil
Nexium
Pulmicort
Diprivan
Iressa
Zoladex
Arimidex
Rhinocort
184
157
147
91
84
82
77
38
28
25
20%
22%
24%
66%
48%
33%
48%
41%
63%
26%
AZ Product Growth CAGR
*Source : BFC Research
$M USD
•Plendil (felodipine) is a generic calcium channel blocker. Losec and Nexium are generic PPI. Betaloc is also a generic hypertensive drug
2010 sales
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Plenty of Challenges for Chinese CompaniesLack of R&D capabilities leads to lack of
sustainable future growth• Despite of the growth, plenty of challenges remain
– Healthcare industry is very fragmented• >3000 pharmaceutical companies in China• Only ~30 domestic diagnostic companies with annual sales over $15 M; most of the
IVD companies are very small– R&D investment is low for domestic companies
• Too much repetitive low-end products• Very short product life cycle due to commoditization• Lost of growth momentum due to lack of new products
– Shrinking profit margin despite sales growth• Price erosion due to lack of clear product differentiation
• Many companies start to invest in R&D globally– Mindray (medical device)– Henrui (pharmaceutical)– Hepalink (pharmaceutical)
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Product Licensing is Key Growth StrategyCross-board transaction still takes time to complete
• Product licensing is becoming a core part of growth strategy – Local companies:
• Need high-end product to grow and maintain the profit margin• Need to improve internal R&D capabilities
– Multinationals: • Need marketing partner to access the middle/low tier market• Need to find a local manufacturing partner to be competitive on cost
• Key Challenges: IP, market complexity, and management difference– Concern of IP integrity is still an issue– Complex market environment in China makes company indecisive
• “The market is too large to let partner to handle this product in China”• “We are not there in China yet, and we need to find a partner”
– Management style difference means more time for making deals
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Financing from Chinese partner is a new trendInvestment deals lower the long-turn partnership risk
• Chinese companies are quite eager to invest in US companies– Most Chinese companies want to make the investment in exchange for owning the China right of your products – Public Chinese companies pays close attention to earning impact– Likely to take less than 20% stake to avoid any impact to earnings – Approval from Chinese government is getting much easier
• Key challenges for getting investment from China:– Cultural difference makes some western companies cautions about getting board level from Chinese investors– Many of the Chinese companies also not too familiar with the overall investment process in US companies– Our goal is to bridge some of the cultural difference to keep the deal straight forward both parties.
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