Bangalore -headquartered Strides Pharma Science Limited (Strides) on Monday announced a joint venture (JV) with Sihuan Pharmaceutical for entering the Chinese market, the second-largest pharmaceutical market in the world, after the US, offering a USD 137 billion market opportunity.
"The company said that its step down subsidiary Strides Pharma Global Pte, Singapore (SPG) has entered into a joint venture (JV) with Sun Moral International (HK) Limited, a wholly-owned subsidiary of Sihuan Pharmaceutical Holdings Group Ltd (Sihuan)," Strides said in an exchange filing.
Sihuan is one of the leading pharmaceutical companies in China's prescription drug market with a market share of 8.3% in the cardio-cerebral vascular market and strong positioning in other therapeutic areas.
Both the companies will set up a new JV company based in Hong Kong to be christened as Sihuan Strides HK Ltd. SPG will own a 49% stake in this company.
"Strides will license four products immediately to this JV with an option to expand the portfolio subsequently. Strides will receive a licensing fee for each product in-licensed to the JV," the company said in the filing to the Bombay Stock Exchange.
The development came in wake of the recent regulatory developments in China that has enabled fast track approvals of differentiated high-quality generics approved in key regulated markets. Strides' specialized basket of over 140 products qualifies for the program, and this JV will be able to leverage it in China.
The drug maker stated that it will immediately license four high potential products to the JV which will add significant value to Sihuan's existing portfolio
"Strides will supply these products to the JV from its manufacturing facilities at India and Singapore. The JV will explore setting up local manufacturing in China in due course," it added.
Commenting on the development, Arun Kumar, Group CEO and Managing Director, Strides, said, "We are delighted to partner with Sihuan Pharmaceutical with the initial set of products having a significant market opportunity in China. We look forward to strengthening the partnership in the near term to build a strong pharmaceutical franchise in China."
"The cooperation between Sihuan Pharmaceutical and Strides is a powerful collaboration. Sihuan will give full scope to the JV in sales and marketing strategies and continue to expand the market rapidly through our marketing channels," said Che Fengsheng, Chairman and Executive Director, Sihuan.
In a separate development, the board of directors of the company has approved the merger of Arrow Remedies, Fagris Medica and Strides Emerging Markets Limited (SEML) with the company, subjected to requisite approval.
"Arrow Remedies, Fagris Medica and SEML are, direct or indirect, wholly-owned subsidiaries of the company," it said.
Edited by Chitranjan Kumar