Print“There’s a list of 25 companies that are considering doing this, but Novartis is the only pharmaceutical company.”
Novartis is weighing the idea of initial public offering in China. Company officials are not talking, but sources have told Reuters that the Swiss drugmaker has been consulting relevant government agencies about the possibility of listing on Shanghai’s planned international board.
“There’s a list of 25 companies that are considering doing this, but Novartis is the only pharmaceutical company,” says Greg Scott, president and founder of ChinaBio, a consultancy based in China and the United States.
A Chinese listing would enable Novartis to raise money in China to grow its operations and increase its brand awareness.
Novartis has a strong presence in the country, having invested more than $700 million and employing more than 5,000 people there, according to Reuters. In 2009, the drugmaker announced it would invest $1.2 billion in China over the next five years. Its majority stake in the Chinese vaccine maker Zheijing Tianyuan BioPharmaceutical and a new facility it is building in Shanghai anchor its operations in the country.
Novartis’ Chinese business grew 12 percent in 2010, and accounted for 10 percent of the Swiss biopharmaceutical’s global revenue in 2010, or $4.6 billion, according to its annual report.
China’s international board is not expected to be operational until mid-2012 at the earliest. Local media has reported that it will host only ten companies initially.
ChinaBio’s Scott said he doesn’t think a Novartis will cause many pharmaceutical companies to follow suit in China. “But I do think it will give Novartis additional exposure to the population, increase brand awareness, and that may be what they are really trying to accomplish.”
July 16, 2011
http://www.burrillreport.com/article-novartis_eyes_potential_chinese_ipo.html
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