Choosing a Cooperation Plan

Kuncheng's Hilton Grand Hotel had practically been booked out by representatives from global pharmaceutical giants and major domestic drug companies.

Over the past few days, pharmaceutical representatives had been constantly coming and going from the hotel, running into countless peers every day.

Everyone greeted one another with beaming smiles, but once they turned away, they secretly inquired about other companies' proposals while studying each other's expressions to guess whether there had been any substantive progress in negotiations with Sanqing Pharmaceutical.

Sanqing Pharmaceutical's people greeted the drug company representatives with smiles every day, talking until their mouths went dry and their faces nearly froze from smiling.

Yet every one of them was full of energy, proud and spirited, with strength to spare.

Wei Kang had not been idle these past few days either. He had discussed it with Sun Chengren: if Sanqing Pharmaceutical wanted to grow rapidly, it needed not only capital, but also powerful sales channels.

Those channels included not only the domestic market, but also pathways for getting its drugs approved and launched overseas.

Domestic channels were easier to handle. Sanqing Pharmaceutical had been established for years and had long built its own sales system, so expanding its domestic market channels would not be a problem.

Moreover, this New Anti-Cancer Drug filled a gap in China's new drug research and development sector. It would inevitably receive state support, and its future launch would surely be smooth sailing.

But Sanqing Pharmaceutical was, after all, a small drug company with no overseas sales channels, and building a complete network on its own within just a few years would be difficult.

For top-tier pharmaceutical companies, there were countless ways to enter a country's market. Whether by building wholly owned or joint-venture factories, or cooperating with local companies, everything was simple and feasible.

Through such straightforward methods, they could rapidly establish sales channels in a country without facing much resistance.

As for international pharmaceutical giants like Pfizer Inc., Bayer, and Johnson & Johnson, not only were they flush with capital, but their resources and connections in every country were top-notch. Their sales channels had long since been established.

In the shortest possible time, and with hardly any effort, they could get a drug into hospitals, clinics, pharmacies, and other medical institutions in dozens or even hundreds of countries.

Nor did they need to spend much on marketing and promotion. Their brand alone guaranteed efficacy, earning patients' trust and prompting them to choose their drugs willingly.

Patients trusted not only the efficacy of top pharmaceutical companies' products. More importantly, if anything went wrong, they could obtain astronomical compensation from them.

That sort of reputation was even more important than efficacy.

Take Pfizer Inc., for instance. It had once received the largest fine in corporate history, setting a world record and leaving giants from other industries far behind.

In 2009, Pfizer was accused of improperly marketing its blockbuster drug Bextra and concealing potential adverse reactions, ultimately paying $2.3 billion to settle the lawsuit.

This was the fourth time Pfizer had been punished for the same reason, and nearly every global pharmaceutical company had faced similar accusations.

So if people continued trusting pharmaceutical giants such as Pfizer in the future, it would only be because the fines they paid kept getting higher.

After all, even the largest fine in the world amounted to no more than three weeks of Pfizer's sales revenue.

People were willing to believe that even if a major brand's drugs caused problems, they would still receive sufficiently high compensation.

That was an advantage other companies simply could not match.

Therefore, for Sanqing Pharmaceutical, cooperation was the fastest way to make money. It would also allow the company to rapidly build up its assets and raise its brand recognition in the shortest possible time.

But how to cooperate was also something Wei Kang needed to weigh carefully.

Over the past few days, all the pharmaceutical companies had submitted their cooperation proposals, and each company had offered several different plans.

Co-development, a lump-sum buyout, or the complete acquisition of Sanqing Pharmaceutical, including all assets such as its drug research laboratories.

Those pharmaceutical companies still refused to give up, offering enormous sums for buyouts and acquisitions in an attempt to sway Wei Kang.

The multinational giants in particular offered prices more ruthless than the last.

Even Wei Kang had not expected Bayer to offer 10 billion euros.

When Sun Chengren saw that figure in the proposal, his hand could not help but tremble.

"Uncle Sun, isn't this price tempting?"

"Ten billion, and euros at that. If we sold, we could retire immediately and never have to worry about the rest of our lives."

Old Sun pressed a hand to his chest and nodded. "I'd be lying if I said I wasn't tempted. When I saw that number, my heart nearly stopped. And that price can definitely still be negotiated. If I were Sanqing's major shareholder, I'd definitely agree. I'm nearly fifty already. Retiring at my age wouldn't be a loss."

"But I know you. You definitely want to make Sanqing bigger and stronger, to turn it into a source of national pride for China. Your career matters more to you than money. Otherwise, when the company was on the verge of bankruptcy, you would have sold Sanqing long ago."

"Haha, Uncle Sun really does understand me. As expected of someone who watched me grow up."

Wei Kang laughed heartily. "But don't worry. Ten billion is nothing more than the difference between getting it now and getting it in two years."

"And that price has definitely been leaked already. The cooperation terms offered by the other pharmaceutical companies won't be too far off."

That was indeed true. That price had scared off most pharmaceutical companies. After all, 10 billion euros was not a sum an ordinary drug company could produce.

Wei Kang continued, "I've already decided that we should mainly discuss cooperation with multinational giants. Selling is out of the question."

"But if we cooperate, I prefer a long-term partnership. They definitely won't be willing to give up the initiative, though, so this will be a difficult negotiation process. We need to compare our options and choose a partner that is as sincere as possible."

"There are currently three possible approaches. The first is equity investment cooperation: they directly invest in the anti-cancer drug project and participate in its subsequent development. That is generally more suitable during the early stages of new drug development. We already have results now, so giving up equity would be like handing it over on a silver platter. We can rule that out."

"The second is agency rights cooperation. We grant them overseas agency rights for the finished drug. After importing it, they would handle subsequent development. They could even rename it and sell it under their own brand, while we receive sales commissions. This method offers a great deal of freedom and should theoretically be the best option. Unfortunately, Sanqing is simply too weak right now and has nowhere near enough production capacity. It looks like we can only consider it later."

"The third is licensing cooperation. We can quickly receive a large upfront payment to ease our immediate crisis, while continuing to earn revenue afterward. Although the total amount would be capped, it could greatly accelerate the company's growth. This is currently the most suitable plan for us."

"However, this plan also comes with different terms. It still depends on how deeply both sides cooperate. If we can reach a strategic partnership with one of the giants and jointly develop overseas markets, then this would be the best option."

"So we still need to negotiate properly with every giant and secure the best possible terms before making a final decision."

Old Sun said approvingly, "It seems President Wei has thought this through very clearly. I fully agree with your ideas."

Wei Kang set down the report in his hand. "Then we'll negotiate according to these standards. As for the domestic pharmaceutical companies, I'll first look through their abandoned drug formulas. If there are any good ones, we can't let them go. It would be best if we could buy them. Since they've already prepared to give them away, I'm sure they won't mind selling them to us cheaply as a package deal."

"You! How did you suddenly become so superstitious?" Old Sun shook his head with a laugh.

Wei Kang scratched his head and chuckled. "Isn't that just the lucky mindset caused by survivor bias? Everyone has their own particular preferences."

The two discussed a few more details, and Old Sun took his leave.

Wei Kang, meanwhile, fell into deep thought.

The desk before him was neatly covered with cooperation proposals from major pharmaceutical companies.

He reached out and picked up the proposals from three international pharmaceutical giants: Pfizer, Bayer, and Johnson & Johnson.

For now, these three offered the most persuasive terms, but which one he would ultimately choose—

would depend on their sincerity.

The choice was in his hands.