Novartis has reached an agreement to acquire an 85% stake in the Chinese vaccines company Zhejiang Tianyuan Bio-Pharmaceutical Co., Ltd. as part of a strategic initiative to build a vaccines industry leader in this country and expand the Group's limited presence in this fast-growing market segment. This proposed acquisition will require government and regulatory approvals in China.
Tianyuan is a privately-owned vaccine company offering a range of marketed vaccine products in China and R&D projects focused on various preventable viral and bacterial diseases. Tianyuan has been delivering dynamic and profitable growth, having more than doubled its net sales to approximately USD 25 million in 2008 compared to 2006.
"Novartis has a long-standing commitment to improving healthcare in China. Our future activities with Tianyuan are an important step in our strategy to enhance the prevention of diseases in China with high-quality products," said Dr. Daniel Vasella, Chairman and CEO of Novartis. "The leadership and associates of Tianyuan share with Novartis the same ambition of offering a broad range of vaccines that can prevent many potentially deadly diseases and greatly improve quality of life."
As part of the collaboration, the two companies will work together to expand Tianyuan's product portfolio and R&D pipeline through targeted investments in vaccines innovation, manufacturing technologies and commercial networks. This collaboration is also expected to facilitate the introduction of Novartis vaccines into China, where Novartis currently has a limited presence with an offering of vaccines against influenza and rabies.
"Our mission is 'To build the Great Wall of Health for the people.' I personally look forward to working with Novartis to continue our mission by bringing more innovative vaccines to China and building Tianyuan into a true international vaccines company," said Mr. Ding Xiaohang, who is the founder, Chairman and CEO of Tianyuan and will continue to lead this business while holding a minority stake.
China is the world's third largest vaccines market, with annual industry sales of more than USD 1 billion and expectations for sustained double-digit growth in the future given the government's commitment to improve access to quality healthcare.
Transaction terms
Novartis has signed a definitive agreement with the shareholders of Zhejiang Tianyuan Bio-Pharmaceutical Co., Ltd., to acquire an 85% stake for approximately RMB 850 million (USD 125 million in cash). The transaction is subject to certain closing conditions, including receipt of government and regulatory approvals in China.
About Tianyuan
Zhejiang Tianyuan Bio-Pharmaceutical Co., Ltd., which was founded as a private enterprise by Mr. Ding Xiaohang, entered the Chinese vaccines industry in 1994 with the first vaccine in China against Hemorrhagic Fever with Renal Syndrome (HFRS) caused by hantaviruses. Tianyuan has since become one of the country's leading private manufacturers and distributors of vaccines with approximately 400 associates and an R&D/manufacturing site in Hangzhou (near Shanghai).
About Novartis
Novartis provides healthcare solutions that address the evolving needs of patients and societies. Focused solely on healthcare, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, cost-saving generic pharmaceuticals, preventive vaccines, diagnostic tools and consumer health products. Novartis is the only company with leading positions in each of these areas. In 2008, the Group's continuing operations achieved net sales of USD 41.5 billion and net income of USD 8.2 billion. Approximately USD 7.2 billion was invested in R&D activities throughout the Group. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 99,000 full-time-equivalent associates and operate in more than 140 countries around the world. For more information, please visit http://www.novartis.com.