Easing of COVID-19 in northern China

The north­ern Chi­nese province of Hebei offers great poten­tial for phar­ma­ceu­ti­cal invest­ment as it has been one of the lead­ing regions for phar­ma­ceu­ti­cal pro­duc­tion. Though it has been heav­i­ly impact­ed by COVID-19 in recent months, the region has strong merg­er and acqui­si­tion (M&A) poten­tial due to a large num­ber of small com­pa­nies with a sin­gle facil­i­ty oper­at­ing in the area, says Glob­al­Da­ta, a lead­ing data and ana­lyt­ics company.

Adam Brad­bury, Pharm­Source Ana­lyst at Glob­al­Da­ta, com­ments: “On 6 June 2020, Hebei and neigh­bor­ing Bei­jing low­ered their COVID-19 emer­gency response from lev­el two to lev­el three, which allows for essen­tial trav­el by lift­ing cer­tain pur­chas­ing restric­tions on plane and train tick­ets from trav­el­ers from low-risk areas. This reduc­tion of COVID-19 alert­ness lev­els is a sign that the North­ern provinces are slow­ly get­ting back to busi­ness. If a sec­ond wave of infec­tion can be avoid­ed, the area has much poten­tial for invest­ment from inter­na­tion­al phar­ma man­u­fac­tur­ers to fur­ther expand their pres­ence among the pre­dom­i­nant­ly domes­tic companies.”

Most com­pa­nies with more than one facil­i­ty in the region are head­quar­tered in Chi­na. There is a small pres­ence of inter­na­tion­al phar­ma com­pa­nies and CMOs, a sign this region’s phar­ma­ceu­ti­cal indus­try is still devel­op­ing and will need to do more to encour­age invest­ment from inter­na­tion­al companies.

Brad­bury con­cludes: “The major­i­ty of facil­i­ties (84%) in north­ern Chi­na belong to com­pa­nies with a sin­gle site in the region, which indi­cates the high M&A poten­tial of the area’s phar­ma indus­try. In addi­tion, Chi­nese phar­ma man­u­fac­tur­ing is becom­ing more devel­oped and increas­ing­ly export­ing to oth­er coun­tries. The val­ue of the Chi­nese phar­ma mar­ket is increas­ing due to the domes­tic aging pop­u­la­tion and there­fore, the inevitable increas­ing demand for medicines.”