Editor’s Note: ChinaBio® and the EBD Group will be holding the first Partnering Forum in China on June 23-24 in Shanghai. Over 400 attendees from around the world are expected, including many representatives of big pharma. Bayer Healthcare will be present in force, including Liam Condon, Managing Director, Bayer HealthCare China, who will be one of the keynote panelists. Mr. Condon was recently interviewed by EBD Group’s partneringNEWS™, and that interview is reprinted here with their permission.

We recently had the opportunity to catch up with Liam Condon, Managing Director of Bayer (XETRA: BAYG.X) Healthcare China, to discuss Bayer's China growth strategy.

Thanks for taking the time out of your busy schedule to speak with partneringNEWS™. With start of the ChinaBio® Partnering Forum only weeks away, we are all interested to learn about Bayer's approach to the high potential Chinese market.

Can you fill us in on what is Bayer’s strategy for the Chinese market?

In China, we had sales of over USD 750 million in 2008 with a growth rate of 56%. According to the IMS Health Data for 2008, Bayer was both the leading healthcare company in China and the fastest growing healthcare company amongst the top multinationals. China is already the third largest market worldwide for the Bayer group and we don’t ask if China can become our number one market, we ask when can this happen? So our long-term strategy is built around the vision of China as a global growth driver for our company, which means we need to be ready to invest and look to the long-term, rather than get caught up in any short-term pessimism.

We will support innovation and new ideas in every area of the company, not just in research and development. We will identify, test and implement new ways of doing business, across all functions. And we must lead the changes in our industry, not just respond to them. We will improve the productivity and effectiveness of our key functions further, rewarding and promoting talented and effective people. We will mainly grow organically, but we are always on the lookout for attractive external growth opportunities, which explains why we acquired the Topsun OTC business last year.

This year, we expect to expand further in the rapidly developing western provinces and utilize the opportunities that the new Healthcare Reform in China will bring. In addition, Bayer Schering Pharma together with the Ministry of Health has initiated one of the biggest community welfare investments among international pharmaceutical companies aimed at improving health services in western China. Such investments are all part of our longer term plan to play a leading role in the development of healthcare in China and by doing so create a strong and sustainable source of growth for the Bayer group.

How does Bayer view the Chinese market, as potential large market for its products, or as a burgeoning R&D sector developing New Molecular Entities (NME), or both?

The large patient population, growing incidence of chronic disease, dramatic pace of urbanization and the rapid aging of society all contribute to the fact that China will grow as a healthcare market in the future. All market forecasts predict this and in this sense China as a market is the largest growth opportunity in the global healthcare industry. However, China is still a developing country and the level of innovation needs to be increased for the country to progress further. The government has clearly recognized this and now strongly promotes the path of scientific development and innovation. Once China commits to something, it usually happens quite fast, so at Bayer we are convinced that a major wave of innovation will eventually come out of China and we need to tap into this potential now, not only when the innovations start becoming market realities. Although it is still early, for sure NMEs will eventually come out of China for global use, but also entirely new products and markets will develop here to deal with the unique challenges faced by managing the health of such a huge population that is aging before it gets rich enough to pay for the most advanced level of healthcare technology.

Bayer has been both one of a first mover and one of the most active healthcare companies in China. What type of relationships has Bayer developed with China over the years?

Bayer HealthCare has four divisions in China: Bayer Schering Pharma, Bayer Consumer Care, Bayer Diabetes Care, Bayer Animal Health.

Milestones in history:

1936 Bayer sets up its first production company. Bayer Pharma Co. starts manufacturing of a range of products, among them the famous Aspirin® pain reliever
1992 Bayer returns to the mainland China market
1995 Bayer registers Bayer HealthCare Company Ltd. in China
1996 Bayer HealthCare starts construction of state-of-the-art pharmaceutical manufacturing facility
1999 Bayer HealthCare facility obtains GMP certification issued by the State Food & Drug Administration
2002 Glucobay approved by the State Drug Administration for IGT
China becomes the first country to use drugs to screen IGT
2005 Bayer HealthCare successfully acquires Roche OTC business
2007 Bayer HealthCare Co., Ltd. and Schering Pharmaceuticals Ltd. completes merger on August 1, 2007. The new pharmaceuticals group is named Bayer Schering Pharma and becomes a division of Bayer HealthCare in China.
2008 Completes Acquisition of Western OTC Cough and Cold Business of Topsun Science and Technology
2009 Bayer Shering Pharma to invest EUR 100 million in China to build a global R&D center

There are sure to be many companies attending ChinaBio® Partnering Forum eager to learn what Bayer’s partnering strategy is and the type of products you seek, can you fill us in?

“Innovation” is at the core of Bayer’s partnering strategy, we are basically interested in research, development and commercialization opportunities for any innovative products that fit our strategic therapeutic area priorities. These priorities are oncology, cardiology, women’s health/gynecology and diagnostic imaging.

We are clearly not interested in partnering for generics, we are really focusing on innovation and on better serving unmet market needs. In China we have an additional area of interest beyond the above mentioned global priorities and that is the area of Diabetes.

Diabetes is our largest franchise in China, so we have a unique situation and are always interested in partnering options to help further strengthen our presence in this therapeutic area. So in essence we can help smaller biotech companies to both develop and commercialize their assets in China as long as these assets are in line with our priorities. Bayer has a long and successful history of partnering and is a very reliable partner that can be trusted. Bayer places a big emphasis on open and transparent communication, this is also a crucial quality that we bring to every discussion with potential partners.

How do you see Bayer's presence in China five years from now?

From a sales point of view, Bayer aspires to be a leading player in the market and short term we should be able to achieve sales of over USD 1 billion this year. Our goal is to consistently grow above market, which means a growth of approx. 20% per year from our current high base. Secondly, our goal is to bring a significant number of new products to the Chinese market. Bayer aims to launch 20 truly innovative drugs within a 5 year period. The third key objective is to make a real contribution to the development of healthcare in China, particularly in rural areas. And finally, the fourth dimension is our desire to be perceived as the best partner for our core target group in China: physicians.

Bayer recently announced a collaboration with Tsinghua University in Beijing, what’s this about and how does it fit in with Bayer’s overall China strategy?

Bayer HealthCare AG and Tsinghua University have signed a comprehensive collaboration agreement in March 2009 to enter into a strategic partnership. The two partners will establish a joint research center at Tsinghua University.

The newly established joint research center is part of an initiative of Bayer HealthCare’s new Global R&D Center in Beijing where its scientists from the Global Drug Discovery–Innovation Center focus on the discovery of new therapies through research collaborations. At the Bayer–Tsinghua Research Center, scientists from the Institute of Biomedicine, the Department of Biological Sciences and Biotechnology, the School of Medicine, and the Department of Chemistry of Tsinghua University will collaborate with scientists from Bayer Schering Pharma’s Global Drug Discovery unit along the drug discovery and development value chain in the therapeutic research areas of oncology, women’s health, diagnostic imaging, and cardiology. Through this collaboration, Tsinghua scientists will make substantial contributions with their research findings to the discovery of new medicines.

As part of this strategic partnership, Bayer Schering Pharma is planning to promote life science education as well as to reward scientific excellence at Tsinghua. For these purposes two funds will be launched: a "Student Fund" and a "Faculty Fund". The “Student Fund” will enable a variety of Bayer sponsored life science programs at Tsinghua, including student and scientist exchange programs between Tsinghua and Bayer Schering Pharma. The “Faculty Fund” will reward creative individuals for their significant contributions to life sciences and cutting-edge research in drug discovery, in particular in the fields of Bayer Schering Pharma’s core therapeutic areas.

What are Bayer’s goals and expectation for the Chinabio® Partnering Forum?

We aim to position ourselves as a leading healthcare company in China that can help potential partner companies to maximize their assets from both an R&D and commercial point of view. We have a strong belief in the future of healthcare in China and we are actively looking for partners to help us fulfill our vision. We hope this forum will help facilitate this process.

See ChinaBio® Today's other articles on Bayer.

Disclosure: none. Bayer Healthcare is a sponsor of the ChinaBio® Partnering Forum being held June 23-24, 2009 in Shanghai.