PLYMOUTH MEETING, Pa.--(BUSINESS WIRE)--Beijing Med-Pharm Corporation (Nasdaq: BJGP - News) today announced that an entity formed by it and Alliance Boots plc (AB.LSE), Europe’s leading pharmacy-led health and beauty group, has agreed to acquire a 50 percent interest in Guangzhou Pharmaceuticals Corporation (“GP Corp.”), the third largest pharmaceutical wholesaler in China.
Alliance BMP Limited, the UK-based investment vehicle formed by Alliance Boots and Beijing Med-Pharm, will take a 50 percent interest in GP Corp. for RMB 545 million ($69.0 million) in cash, constituting a direct capital injection into GP Corp. Alliance Boots will own 80 percent of Alliance BMP Limited and Beijing Med-Pharm will own 20 percent. Alliance BMP will hold four of the eight GP Corp. board seats. David Gao, who played a key role in the negotiations for the transaction with GP Corp., will continue as CEO of Beijing Med-Pharm, and will serve as Chairman of GP Corp. The formation of Alliance BMP also creates a vehicle through which Beijing Med-Pharm and Alliance Boots can make additional investments in China.
“This agreement creates an important alliance for Beijing Med-Pharm with Alliance Boots, a global leader in pharmaceutical distribution, and highlights the appeal of our expertise in the Chinese pharmaceuticals marketplace to Western partners,” said Gao. “Our stake in GP Corp. through this joint venture will provide Beijing Med-Pharm with access to key distribution facilities in southern China to complement our existing distribution infrastructure. This helps complete our strategic vision of offering a comprehensive, end-to-end solution to Western pharmaceutical companies seeking to enter the Chinese market while expanding distribution of our own products across China.”
“The unique knowledge and capabilities of Beijing Med-Pharm made them an ideal partner for this transaction,” said Stefano Pessina, Executive Deputy Chairman, of Alliance Boots. “This investment gives Alliance Boots a strong and scalable platform in one of the world’s largest and fastest growing markets and represents an exciting opportunity for expansion within China.”
GP Corp. was founded in 1951 and prior to this transaction, was a subsidiary of Guangzhou Pharmaceutical Company Ltd. (“GPCL”), a Hong Kong Exchange-listed company whose ultimate parent is the Municipality of Guangzhou. GPCL will retain ownership of the remaining 50 percent of GP Corp.
The transaction, which is subject to a number of closing conditions including GPCL shareholder approval and various regulatory approvals, is expected to be completed in the second half of 2007. No assurance can be provided that the acquisition will be completed until the closing conditions are satisfied, including the receipt of Chinese government approval.
GP Corp. has grown rapidly in recent years, with annual revenues increasing from RMB 4.4 billion ($565 million) in 2003 to RMB 6.4 billion ($820 million) in 2005. GP Corp. serves more than 12,000 hospitals, pharmacies, and other wholesalers from eight distribution facilities located throughout Guangdong Province and southeast China.
About Alliance Boots plc
Alliance Boots was created as Europe’s leading pharmacy-led health and beauty group through the merger of Alliance UniChem and Boots Group in July 2006. The merger builds upon the existing strategies of both groups, combining complementary skills and businesses to create an international force in pharmacy-led health and beauty whilst reinforcing the Group’s commitment to the independent pharmacists through enhanced wholesale distribution and related services. The formation of the GP Corp. joint venture will expand Alliance Boots wholesale presence to 15 countries.
About Beijing Med-Pharm Corporation
Beijing Med-Pharm is a pharmaceutical marketing and distribution company that offers the following services in China: pre-market entry analysis; clinical trial management; product registration; market research; pharmaceutical distribution to hospitals; and pharmaceutical marketing to physicians, hospitals and other healthcare providers.
Forward Looking Statements
In addition to historical facts or statements of current condition, this press release contains forward-looking statements within the meaning of the “Safe Harbor” provisions of The Private Securities Litigation Reform Act of 1995, including statements regarding the terms of the proposed joint venture, the expected benefit for Beijing Med-Pharm and the expected timing of the closing. Forward-looking statements provide Beijing Med-Pharm’s current expectations or forecasts of future events. Actual results could differ materially from those reflected in these forward-looking statements due to the inability to satisfy closing conditions, and if closed the ability for the joint venture to be successful and execute on our strategic plan, general financial, economic, regulatory and political conditions affecting the biotechnology and pharmaceutical industries and the Chinese pharmaceutical market. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Beijing Med-Pharm undertakes no obligation to update publicly any forward-looking statement.
Contact: Beijing Med-Pharm Fred M. Powell, CFO, 610-940-1675 or Media: Sam Brown Inc. Mike Beyer, 773-463-4211 beyer@sambrown.com
Source: Beijing Med-Pharm Corporation
