Arterione.com: What are your suggestions for healthcare companies to go overseas in the Middle East?
Shawn Choi: It's better to have a good understanding of the local market than to follow it blindly. We can't just imagine that we have a friendly relationship with the Middle East and our products have bargaining rights in the Middle East, and the reality may not be so beautiful. The Middle East has a lot of demands on the product itself. If you're just selling products, there will be restrictions. They may prefer to put the technology to the ground to solve the problem of their own industrial chain. In addition, too early stage businesses are not advised to venture in. It is best for enterprises to have certain experience in other markets.
Arterial Network: The Middle East market is also a growing market. Where do you see the future growth opportunities in the Middle East market for healthcare?
Shawn Choi: We need to have a clear understanding of the local market. On the one hand, the local construction cost is very high; On the other hand, it would be wrong to draw parallels with China in the 1980s and 1990s. The Middle East is not poor, with a high GDP per capita. If we want to understand the Middle Eastern market, we need to understand their religious culture. In addition, when overseas companies set up businesses locally, they need a certain percentage of local people in the business. With the liberalization of policies in Saudi Arabia and other countries, the secularization process in Saudi Arabia is accelerating, and the importance of women's role in consumption is becoming increasingly prominent.
From the perspective of female roles, on the one hand, local families have 3-4 children, and the overall expenditure of maternal and infant classes is even higher than that of surrounding developed countries; On the other hand, women show their beauty to their families, which also means the "beauty" consumption demand in the home scene. From the overall market point of view, because the median age of residents is 35 years old, it may be more suitable for the development of some body management drug device applications.
Arterial network: Under the wave of enterprises going to sea, what is the mainstream trend that may appear in the future?
Shawn Choi: From a macro perspective, overseas licensing of innovative drugs is a major trend. In 2023, Hengrui Medicine SHR-1905 injection project is licensed to OneBio for compensation, and OneBio will subsequently pay Hengrui Medicine a down payment and a recent milestone payment of US $25 million, a cumulative R & D and sales milestone of up to US $1.025 billion, and a sales commission reaching a double-digit percentage of annual net sales. Going overseas or licensing innovative drugs is a better entry point. Selling product rights and interests, on the one hand, in the research and development side can achieve complementary advantages, reduce the risk of innovative drug research and development. On the other hand, it can also use the sales network of international pharmaceutical companies. There are a lot of overseas licenses for China's innovative drugs, with more than 50 in 2022. Overseas licensing will become more common in the future.
