Chinese drug firm readies for Pfizer unit takeover

09:10, June 11, 2010      

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Harbin Pharmaceutical Group (HPG), the Chinese buyer of Pfizer's swine vaccine unit, is preparing workshops and technicians to take over the production line, the company announced Thursday.

"The production preparations are underway, and we hope to obtain production certificates for Pfizer's vaccines of RespiSure and RespiSure-One a year from now," said Jiang Linkui, general manager of HPG, at a press conference in Harbin, capital of northeast China's Heilongjiang Province.

It was the first news briefing by the company after the 50-million-U.S.-dollar deal was completed in May.

Juan Ramon Alaix, president of Pfizer Animal Health, sent a letter on the occasion saying Pfizer was confident that the two vaccines represented "a strategic fit for HPG," and HPG shared Pfizer's commitment to protecting animal health.

"The market for swine production is growing and thriving in China, and the need for more choices in products for veterinary use to help protect animal health is increasing," he said in the letter.

Pfizer was required by the Anti-Trust Bureau of China's Ministry of Commerce to divest the animal vaccine business as a condition for approval of its 68 billion-U.S.-dollar merger with Wyeth, which closed last October.

RespiSure and Respisure-One are vaccines for pigs against mycoplasma hyopneumoniae (MH). Pfizer's sales of the two vaccines in China reached 9.3 million U.S. dollars in 2009, which accounted for 38 percent of the market, and saw an annual increase of 20 percent.

After the divestment, Pfizer retains the IP rights to the vaccines outside China's mainland and will only sell Wyeth's MH vaccine in China, which boasts a 12-percent market share.

The deal between HPG and Pfizer has been eyed as the first of many such transfers of Western intellectual property to Chinese firms after China's anti-monopoly law took effect in August 2008.

Jiang said Pfizer's plant in America would continue to supply the vaccines to the China market till HPG is ready to roll out qualified vaccine products.

He said the company was aiming to make 10 percent of its revenues from the animal vaccine business by 2015, while the current ratio was only 2 percent.

As part of the agreement, Pfizer has to provide HPG with technical assistance and training for up to three years.

"Technicians from Pfizer will arrive in HPG later this month to help with the transfer of the intellectual property rights of the vaccine production," said Jiang.

Yu Li, an animal epidemic expert with the Harbin Veterinarian Research Insitute under the Chinese Academy of Agricultural Sciences, said HPG's takeover was expected to boost the country's overall level in the research and production of high-end animal vaccines.

"Pfizer's files on vaccine technology pile up half a meter high. We are not worried about mastering the framework technology, but the technical management, which is key to the quality and per-unit output of the vaccines," said Zhang Fengqiang, director of the corporate management department of HPG's bio-vaccine production division.

Zhang said the company had prepared a workshop covering 7,000 square meters and a team of 20 experienced technicians for the takeover.

"We are confident of our potential, since HPG's vaccine division boasts 200 professional technicians," said Zhang, who has 20 years in the company.

HPG is a state-owned joint venture. It has been the country's top drug firm in terms of profits and brand value since 2005. Its major investors include CITIC capital, Warburg Pincus and the Chenneng High-Tech Risk Investment Co..



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