Drug maker Shionogi, Ping An Insurance of China to invest $466 mil. in JVs

14, Jul. 2020

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TOKYO, NNA - Japanese pharmaceutical firm Shionogi & Co. and its Chinese partner Ping An Insurance (Group) Company of China Ltd. will set up two joint ventures next month to develop drugs and healthcare services for the Asian market.

The ventures will operate in Hong Kong and Shanghai.

“We are positioning China as a target area alongside Japan and the U.S.,” Shionogi said in a press release Monday.

“The two joint ventures to be established will be playing a central role in bringing about Shionogi’s business transformation into a total healthcare company, establishing a new drug-discovery/development model, and delivering top-line growth,” it said.

The Shanghai venture will become a base for Shionogi’s China and Asia operations to build develop drugs using online data collection and create a manufacturing and quality control system with artificial intelligence technology.

Establishment of the two joint ventures follows Shionogi’s announcement in March that Ping An Insurance will buy shares in the Japanese firm through a third-party allotment. Ping An will hold roughly 2 percent of the voting rights in Shionogi.

Group subsidiary Ping An Life Insurance of China will own 49 percent of the Shanghai operation and venture management firm Shionogi (Hong Kong) Co. will hold the rest. They will invest a combined 45 billion yen ($420 million).

Shionogi (Hong Kong), Shionogi’s wholly owned subsidiary, will have a 51 percent stake in the Hong Kong venture, Ping An Shionogi (Hong Kong) Ltd. while Ping An Insurance Overseas (Holdings) Ltd., another subsidiary of the Chinese insurance group, will hold a 49 percent stake. Their total capital comes to 5 billion yen.

Their Hong Kong enterprise will do trade around Asia and manage intellectual property licenses.