More than 40 years after establishing the first U.S. pharmaceutical joint venture in China, Bristol Myers Squibb is handing over its controlling stake in the business.
BMS has inked an agreement to sell a 60% ownership stake in its China-based joint venture Sino-American Shanghai Squibb Pharmaceuticals (SASS), a BMS spokesperson told Fierce Pharma in an emailed statement. The move is primarily related to manufacturing of older medicines and consumer products in China and doesn't affect Bristol's core business in the country.
An internal email circulating online suggests Hillhouse Capital is on the other end of the transaction. Hillhouse is one of Asia’s biggest investment firms, having invested in such biopharma outfits as BeOne Medicines (formerly BeiGene) and Jiangsu Hengrui Pharmaceuticals. The BMS spokesperson didn’t address the buyer’s identity.
“As part of our long-term strategy, we continue to align our resources to support evolving business needs across our global network,” the BMS spokesperson said. “The planned sale of our interest in the SASS joint venture reflects the continued implementation of our manufacturing strategy—one that balances internal capabilities with strong external partnerships to enhance regional focus and ensure long-term supply reliability for patients in China and around the world.”
BMS will work to assist any employees impacted by the deal and is prioritizing a “smooth and respectful transition” during the ownership change, the spokesperson added. BMS did not elaborate on the financial terms of the agreement.
Crucially, the news does not mean that BMS’ core innovative drugs business will cease operation in China.
BMS originally linked up with China’s Sinopharm Foreign Trade to establish SASS as the first U.S.-China pharmaceutical joint venture back in 1982. When China opened its economy to foreign entities in the 1980s, multinational corporations were only allowed to enter the country through joint ventures with state-owned, local companies such as Sinopharm.
BMS’ China joint venture operates a 58,000-square-meter (roughly 624,307-square-foot) manufacturing facility in Shanghai responsible for production of antibiotics, cardiovascular drugs, analgesics and metabolic medicines, according to the company’s website.
BMS’ stake sale isn’t expected to disrupt facility operations or product supply in China. The transaction includes both the sale of the joint venture itself and products that SASS makes exclusively for the mainland China market, including the hepatitis antiviral Baraclude, the buffered aspirin product Bufferin, the vitamin deficiency supplement Theragran, Monopril for high blood pressure and heart failure, and Velosef, which is an antibiotic used to treat bacterial infections.
Several other prescription or over-the-counter medicines are listed under the joint venture, according to a database managed by China’s National Medical Products Administration.
These days, as China has become more amenable to foreign entities’ participation in the domestic market, legacy joint ventures established by Western drugmakers often maintain a mix of older drug brands, off-patent medicines and consumer products separate from the companies’ innovative therapeutics businesses.
Meanwhile, BMS isn’t the only ex-China drugmaker to dispense with certain legacy brands in the country.
Last August, Belgium’s UCB said it was selling its mature neurology and allergy business in mainland China to local healthcare asset manager CBC Group and the Abu Dhabi-based investment organization Mubadala in a deal worth $680 million.
The deal covered the divestment of seizure drugs Keppra and Vimpat, Neupro for Parkinson’s disease and restless leg syndrome, and the allergy meds Zyrtec and Xyzal, as well as a manufacturing facility in the city of Zhuhai, located in China’s Guangdong Province.
The deal was designed, in part, to free up UCB’s focus on potential innovative medicine launches across immunology, neurology and rare diseases in China, the company’s CEO, Jean-Christophe Tellier, said at the time.