Julia Gross recently penned an article in Focus Money shedding light on the USA’s reluctance to do business with pharmaceutical manufacturers from China, and the considerable market consequences for contract manufacturers. In this summary, we capture key points from the interview and provide a link to the full article in German.
Since the onset of the COVID-19 pandemic, the article highlights the reliance on Chinese suppliers. As a result, there have been initiatives in the US and plans in the EU to bring drug production back home, framed as protecting vital industries akin to the tech sector.
This shift has caused unease among Contract Development and Manufacturing Organisations (CDMO) and Contract Research Organisations (CRO), which typically handle significant portions of production, research, and development for pharmaceutical and biotech companies in the Asia-Pacific region.
This would severely restrict the opportunities for healthcare companies to work with Chinese CDMOs, including Wuxi Apptec and Wuxi Biologics. “More half of their turnover comes from US customers,” states Paul de Mestier.
What lies ahead for the future of CDMOs and CROs?
“Pharmaceutical and biotech companies want to work with local partners,” states Raphael Bidaut.
The article highlights the challenges in investing in companies that operate in the Contract Development and Manufacturing Organization (CDMO) and Contract Research Organization (CRO) space, but it also sheds light on three promising shares with investment potential.
Paul de Mestier
Investment Banking | Healthcare
Raphael Bidaut
Investment Banking | Healthcare
About Bryan, Garnier & Co
Bryan, Garnier & Co is a European growth investment bank that helps healthcare and technology companies become global champions. By combining extensive sector expertise with an entrepreneurial mindset, Bryan Garnier provides companies and their investors with independent growth strategic advice, and privileged access to buyers and capital in Europe, the US and Asia.
As a full-service investment bank, the firm offering includes private and public growth financing solutions, mergers and acquisitions (M&A) advisory, research insights, and institutional sales & execution. Founded in 1996, Bryan Garnier & Co is an independent partnership with around 200 employees located in major financial centres in Europe and the US.