Acquisitions, Joint Ventures, and Licensing for Medical Devices and Pharmaceuticals/Drugs in Asia

PBM assists clients with acquisitions, joint ventures, and licensing in Asia. PBM can help by:

  • Identifying and qualifying prospective partners through our Asian contacts.
  • Making presentations to partner candidates.
  • Arranging introductions to appropriate partner candidates.
  • Accompanying the client to meetings and assisting with negotiations on the client's behalf.
  • Providing guidance on appropriate deal structure, pricing, and other related issues.
  • Providing extensive on-the-ground due diligence.
  • Closing the deal.
  • Following up once the deal is signed and providing guidance during the implementation phase.

Acquisitions

More and more Western medical companies and investors are interested in acquiring Asian medical device and pharmaceutical/drug companies. Acquisition in Asia will vary depending on the rules, regulations, and cultures of each country. While you may purchase a company in Japan via a P/E ratio, China acquisition may be based on Net Asset Value plus a premium. Successfully acquiring medical assets at an appropriate price in Asia requires plenty of due diligence. PBM can help Western medical companies and investors in the Asian medical markets with target identification, on-the-ground due diligence, and negotiations in each local language.

Joint Ventures

Joint venture structures, regulations, and opportunities will vary in each Asian country. For example, in negotiating a joint venture in China, it is often difficult to determine who is in charge on the Chinese side of the table. Representatives from the government (including officials from different levels of government), industry representatives, factory officials, Communist party leaders, and others may be included in the negotiations. These different parties on the Chinese side may have competing interests. Chinese documentation is often very vague, and negotiations can drag on much longer than one would expect. The Chinese know that you want to go home with a signed agreement, and may use this factor to get the best deal possible. In the 1990s, most Chinese joint ventures were 50/50 deals. Today, deals with an 80/20 or even 90/10 ownership structure (with the foreign partner holding the majority) are more common.

 

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Licensing

Licensing of pharmaceuticals/drugs and medical devices will vary according to the Asian country you are doing business in. For example, in Japan in the early to mid-1990s, licensing activity between U.S. biotech companies and Japanese pharmaceutical/drug firms was frenetic. Many deals were done with little due diligence, and as a result, there were many failures. In recent years, however, Japanese pharmaceutical/drug companies have become more cautious, so fewer deals are being struck with Western bio or pharmaceutical/drug companies. Today, Japanese investors are more sophisticated and more due diligence is being done. Japanese firms today are likely to invest only in later stage deals.

For more information on acquisition, joint venture, and licensing issues in Asia, please see the following PBM publications and/or contact us to discuss your specific needs.


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