Easing of COVID-19 in northern China is an investment opportunity, says GlobalData

The northern Chinese province of Hebei offers great potential for pharmaceutical investment as it has been one of the leading regions for pharmaceutical production. Though it has been heavily impacted by COVID-19 in recent months, the region has strong merger and acquisition (M&A) potential due to a large number of small companies with a single facility operating in the area, says GlobalData, a leading data and analytics company.

Adam Bradbury, PharmSource Analyst at GlobalData, comments: “On 6 June 2020, Hebei and neighboring Beijing lowered their COVID-19 emergency response from level two to level three, which allows for essential travel by lifting certain purchasing restrictions on plane and train tickets from travelers from low-risk areas. This reduction of COVID-19 alertness levels is a sign that the Northern provinces are slowly getting back to business. If a second wave of infection can be avoided, the area has much potential for investment from international pharma manufacturers to further expand their presence among the predominantly domestic companies.”

Most companies with more than one facility in the region are headquartered in China. There is a small presence of international pharma companies and CMOs, a sign this region’s pharmaceutical industry is still developing and will need to do more to encourage investment from international companies.

Bradbury concludes: “The majority of facilities (84%) in northern China belong to companies with a single site in the region, which indicates the high M&A potential of the area’s pharma industry. In addition, Chinese pharma manufacturing is becoming more developed and increasingly exporting to other countries. The value of the Chinese pharma market is increasing due to the domestic aging population and therefore, the inevitable increasing demand for medicines.”

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