Stravencon Uk China Entrepreneurship Conference Final Chinese

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  • Stravencon is a healthcare trading company, founded here in London in 2006, which provides a bi-directional product and technology trading platform for current life science products and technologies, including pharmaceuticals, medical devices and diagnostics as well as novel technologies. In support of this core mission, Stravencon also provides financial advisory and what we call “globalization” support services for our Chinese partner companies
  • Our core business is the product & technology trading platform, which works as follows: (from China to Europe) in collaboration with our Chinese partners, we put together the regulatory documentation required by European authorities which wefile in our own name, thus acquiring the marketing authorizations as our own intellectual property. We then distribute the approved products to 3rd party marketing partners and purchasing organizations (like the NHS) in Europe. Trade-related revenue consists of license fees for use of our marketing authorizations paid by our marketing partners in Europe as well as commissions on sales.
  • Stravencon Uk China Entrepreneurship Conference Final Chinese

    1. 1. Opportunities for Entrepreneurs in Chinese Healthcare UK China Entrepreneurship and Business Forum London, 19th May 2009
    2. 2. Opportunities for Entrepreneurs in Chinese Healthcare q What is Stravencon? q Status of Chinese Healthcare Reform & Industries – Key Trends affecting the healthcare market and industries – Demand – Supply Chain – Multinationals – Domestic Industry • Strengths/Weaknesses q Opportunities for Entrepreneurs in Chinese Healthcare – Healthcare Product Trading (Export/Import) – Investing in Chinese Healthcare – Developing the Healthcare Service Sector
    3. 3. What Is Stravencon? Product Trading Pharmaceuticals Diagnostics Medical devices Innovative Technologies Financial Globalization advisory support services
    4. 4. Stravencon Product Trading Platform-China to Europe q Stravencon obtains marketing authorizations q Products supplied directly to partner companies and purchasing organisations q Manufacturers hold strategic inventory q Revenues: – license of marketing authorizations – direct sales to purchasing organizations and partner companies – royalties on sales Products Marketing Authorization Products Partner Chinese Data Companies & Manufacturers Stravencon Ltd. Purchasing Payment Payment Organizations s s
    5. 5. Key Trends Affecting Chinese Health Industries q Entry into WTO (2001) q Development of regulatory system like USFDA/MHRA/EMEA, State Food and Drug Administration (SFDA) – Good Clinical Practice (GCP) in Sept 2003 – Good Manufacturing Practice (GMP) in June 2004, but – Corruption scandal in SFDA (2007), resulting in arrest and execution of director q Return of Chinese nationals with expertise and experience in Western biopharmaceutical companies (“sea turtles”) q Chinese government’s promise to expand Intellectual Property (IP) protection and enforce production quality
    6. 6. Background (1) DEMAND Large, rapidly aging population, growing economy, and increasing diagnostic and treatment rates will soon make China the world’s 4th largest market for health care products • Chinese Rx pharma market: expected to grow to US$ 24 billion by 2010 • OTC’s expected to reach US$ 5.7 billion by 2010 • Biopharmaceutical production reached US$ 4.2 billion in 2005 (with US$ 478 million in exports)-producing 8 of 10 top rDNA drugs/vaccines worldwide) • Value of medical devices market: US$ 10 billion • Value of in-vitro diagnostics market : US$500 million • Value of contract manufacturing services (CMO’s): US$ 7.5 billion • Value of clinical research services (CRO’s): only US$ 63 million
    7. 7. Background (2) SUPPLY Domestic Chinese pharma supply chain has undergone major changes in consequence of reforms and FDI • Migration of drug distribution from hospitals (still about 80% of dispensing • From 2003 to 2008, number of retail drugstores grew from 180K to 400Kand number of retailers owning pharmacy chains rose from 1,200 to 1,349 • Investments by Alliance Boots & Goldman Sachs in retail chains • Listing of Nepstar on the NASDAQ • E-pharmacy has been growing by 300% p.a. to reach 15% of total trade volume by 2008
    8. 8. Background (3) MULTINATIONALS Only major MNCs have established direct presence in China, and almost exclusively for domestic market penetration • China has > 6,000 pharmaceutical businesses, 700 of which are foreign-invested (either wholly-owned or JV’s) • Increase of multinational R&D investments (eg., Novartis, Astra Zeneca) • Foreign companies make 40 of the 50 most popular brands, but MNCs account for only 20-30% of market • Entry of foreign OTC healthcare/dermocosmetic companies in partnership with domestic retail chains (e.g., Garnier)
    9. 9. Background (4) DOMESTIC INDUSTRY China’s pharma and medical device manufacturers focus on copy, generic and OEM product marketing and, due to political, cultural and language barriers, have generally failed to establish alliances and access outside of China’s traditional export markets • 97% of drugs made by domestic companies are generic or copy products • Strong potential position in biosimilars (biogenerics) • API’s/bulk pharmaceuticals/traditional medicines (TCM’s) also major part of domestic production • 10 Chinese finished-drug manufacturers have received US FDA certification • Two are certified at present in EU-GMP • Low investment to-date in R&D although government providing incentives • Fledgling export industry of medical devices and diagnostics based on OEM experience
    10. 10. Strengths/Weaknesses of Chinese Healthcare Companies in World Markets Strengths Weaknesses Many traditional pharma cos. Most lack approved (US/EU) manufacture APIs a/w/a finished manufacturing facilities and adequate formulations product documentation Biotech producers have capabilities These producers lack European/US of entering global biosimilar markets market knowledge and strategic with minimal delays direction Vaccine producers/diagnostics Lack of EU/US-GMP facilities for manu- manufacturers are preparing for facturing vaccines/test kits in China and possible outbreak of avian influenza shortage of qualified personnel Chinese medical device suppliers Excessively dependent on manufacture are highly experienced (OEM) and to order and (in general) insufficiently cost effective market-oriented
    11. 11. Healthcare Product Trading (Export/Import) • Major opportunity to work with major/entrepreneurial Chinese pharma & medtech companies to access regulated markets • Planning very important given lead times, esp. in pharma • Opportunities to develop original Chinese health technologies • Development of TCM’s into conventional drugs • Life science start-ups (biotech/genomics) • Value-added medical devices & diagnostics • Source products from Europe & USA for Chinese pharma companies and distributors
    12. 12. Investing in Chinese Healthcare •Investing in healthcare infrastructure (hospitals, polyclinics, pharmacies) •Investing in already private healthcare companies •Privatizations of state-owned healthcare enterprises •Investing in novel technologies
    13. 13. Developing the Chinese Healthcare Service Sector •Major opportunity to develop CRO’s and other pharmaceutical industry services •Development of healthcare marketing services, including market measurement and research •Recruitment of experienced healthcare institution management •Training of Chinese healthcare institutional and industry` personnel
    14. 14. Chinese Life Scienes Trade & Investment Platform World Headquarters : US Office : Chinese Office : 454/458 Chiswick High Road 110 East 42 Street nd Level 29, Kerry Centre London W4 5TT, Suite 1301, New York, No. 1515 Nan Jing West Road United Kingdom N.Y. 10017 U.S.A. Shanghai 200040 China Tel. +44(0)788 18 20 416 • info@stravencon.com • www.stravencon.com

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