The Tiger Finds Its Way Into The Dragon Cave: Aurobindo Pharma’s Subsidiary To Form Joint Venture With Luoxin In China
Indian pharmaceutical major, Aurobindo Pharma’s subsidiary, Helix Healthcare BV, will form a Joint Venture (JV) with the Chinese pharma company, Shandong Luoxin, to compete in China, as reported by The Hindu. Helix, a company based out of The Netherlands, is a wholly subsidiary of Aurobindo Pharma, a Hyderabad-based firm.
“The percentage of shareholding in the JV company will be 30 per cent and 70 per cent between Helix and Luoxin [respectively],” a statement released by Aurobindo noted. “Commencement of commercial production of the JV is expected during 2021,” the company added.
This JV comes at an opportune time for the Indian company as Chinese pharma market is set to witness explosive growth in the next decade. According to IQVIA, health-care information company, China was the world’s second-largest pharmaceutical market, with sales of $122.6 billion in 2017.
However, an analyst stated, “the development of China's healthcare industry is still in its infancy, evidenced by its low healthcare expenditure as a percentage of GDP ... and a smaller proportion of its population aged 60 and over.” The Chinese market will grow to be $145 billion to $175 billion opportunity by 2022.
Aurobindo Pharma also agreed to buy the generics arm of Novartis’ US business for $1 Billion in September 2018.