Biotech Values

[DewDiligence]

Actavis*, the world’s second-largest generic-drug company, is pulling out of China:

http://www.bloomberg.com/news/2014-01-15/actavis-to-quit-china-as-trouble-seen-for-little-profit.html

“It is not a business friendly environment,” [CEO] Bisaro said at the JPMorgan Chase & Co. health-care conference in San Francisco. “If we’re going to allocate capital, we’re going to do so where we can get the most amount of return for the least amount of risk. And China is just too risky.”

I would label this statement as somewhat disingenuous. The problem is not so much that China is risky, but rather that Actavis can’t charge a premium price for its drugs because the company doesn’t have a strong reputation for quality. Such companies as PFE and ABT, which do have a reputation for quality, are doing ok selling branded generic (i.e. off-patent) drugs in China and other emerging markets.

See #msg-81873449 for related story.

*Actavis is the company formerly known as Watson Pharmaceuticals, who acquired the original Actavis in 2012 and assumed its name (#msg-74848828).