SWING YOUR PARTNER
Andras Gizur, chief representative of Gedeon Richter in China, whose expertise in the country dates back almost 20 years,
has a realistic assessment of the sometimes rosy views of the market from outside. "Everybody thinks China is big," Gizur
says, "and it's therefore very easy to make a successful business – but that's not true, because it's very complicated, everybody's
here, and the competition includes all the big MNCs plus the local companies, which are good and getting better." One way
around it is partnering, a longtime necessity for Gedeon Richter, a company which counts 90% of its sales originating from
outside its native Hungary. Enter GRmidas, the new OTC company, which will enable Gedeon Richter to be one of the only players
at its level to offer full service for both Rx and OTC lines.
Q. David Yang, CEO of MicroConstants China
"In the last 10 or 15 years, Gedeon Richter focused on Rx, which was the strong point because of our long term experience
and the fact that most of our products are Rx. However, our strongest therapeutic area consists of gynaecological products
which account for some 35-37% of global sales – and in China, these products are mainly OTC. This focus on OTC was one of
the main reasons we established the new JV GRmidas Pharmaceuticals, and we have also opened a new business line to further
develop primarily the gynaecological and women's healthcare business line as well," which currently includes Postinor, the
emergency contraceptive known in the US as Plan B. "Earlier we were not present with this portfolio in China, but it's an
area we want to develop in the coming years," Gizur says. "Every step is difficult, but we're on the right track."
Investment company Vivo Ventures specializes in therapeutic products in clinical development in the US and China, and is a
different kind of partner altogether. Managing Partner James Zhao gives the example of Kanghui, a former Vivo investment recently
acquired by Medtronic for USD 816 million, of how his firm can help local companies innovate and accrete significant value.
Found In Translation: Ancient Wisdom from the Middle Country, vol. 3
"By the end of 2008, Kanghui had two products in the pipeline in trauma and spinal. Right now, they have three, and the third,
a joint product, was brought in by Vivo after our investment. This joint technology comes from a company Vivo is very familiar
with, based in Sacramento [California]. One of the reasons why Kanghui invited Vivo to come onboard is that, while they were
not short of cash, they lacked technology. Chinese people are very smart – and they are rightfully well-known for their ability
to copycat products very soon – but technology like the one Vivo introduced to Kanghui represents a fine art of technology
and manufacturing to duplicate the natural mobility of the joint."
Zhao is clear about the value Vivo provided as a partner: "Were it not for Vivo, it would have taken Kanghui five to seven
years to build up such a capability in-house and bring the final product to a commercial stage. But Vivo introduced both companies
to establish an OEM opportunity for Kanghui, which is now the official OEM supplier worldwide. With this third product line
in joints, Kanghui can call itself a true orthopaedic company, and a total solution orthopaedic provider. Without Vivo, this
would not have happened, and this demonstrates in a very clearcut way how what we do is different."