China-based HutchMed (China) Ltd (HKG: 0013, NASDAQ: HCM) has reached an agreement to divest its 45% equity interest in Shanghai Hutchison Pharmaceuticals Limited (SHPL) to GP Health Service Capital Co., Ltd and Shanghai Pharmaceuticals Holding Co., Ltd. (SPH, HKG: 2607, SHA: 601607) for a combined total of USD608 million.
Background on SHPL and Its JV with SPH
SHPL, established in 2001 as an equally shared joint venture with SPH, is a company engaged in the manufacturing, sales, and distribution of its own-brand prescription medicines in China, with a primary focus on cardiovascular diseases. This strategic divestment aligns with HutchMed’s broader business objectives.
Financial Impact and Future Plans for HutchMed
In 2023, the consolidated net income attributable to HutchMed from its investment in SHPL was USD47.4 million. Despite not consolidating any revenue from SHPL, HutchMed plans to utilize the proceeds from this transaction to bolster its internal product pipeline and enhance its core business strategy. This move signifies HutchMed’s commitment to focusing on its core operations and maximizing shareholder value.-Fineline Info & Tech
