An article in Bloomberg piqued my interest in the Chinese...

An article in Bloomberg piqued my interest in the Chinese pharmaceutical industry, which led me to think about where JAT fits into the picture, or could fit into the picture. Main takeaways from the article, in no particular order:

$240b Pharma market, with 40% going to traditional medicines.

Traditional medicine is still a big player in the Chinese health market. A Nobel prize was awarded to an anti-malarial drug derived from traditional medicine.

Cost of medicines forcing government to mandate price cuts. Drug companies are struggling, more so the traditional medicine industry.

Drug companies focussing on IP, patents, and Gucci cancer drugs. Mundane products are being neglected.

There is a push to medicines that work quickly, especially as China grapples with its rapidly ageing population. Traditional meds focus on long-term prevention and recovery so are less favoured by hospitals.

We don’t know what JATPharm intends to make, clearly JAT does or they wouldn’t know what sort of factory to buy or build. But by reading the tea leaves of the Bloomberg article we can suggest a factory that makes modern style medicines that are quick acting, possibly mundane formulations for the aged, and are relatively cheap. They also need to have proven efficacy, be approved for hospital use and personal purchase, and most of all - feature on the national drug reimbursement list.

However, the release talks about JATPharm producing health products, including vitamins and supplements, and other over-the-counter products. While this isn’t medicines, per-se, can we suggest the market has similar characteristics?