Recently, multiple sources have indicated that Bristol-Myers Squibb(BMS) will sell 60% of its stake in Shanghai Bristol-Myers Squibb Co., Ltd., and the buyer may be an affiliate of Hillhouse Capital Group.

According to an email circulating online, BMS has signed an agreement to sell its 60% stake in Shanghai Bristol-Myers Squibb Pharmaceuticals Co., Ltd. and several related products manufactured and sold exclusively in mainland China to an affiliate of Hillhouse Capital. These products include Baraclude, Bufferin, Theragran, Monopril, and Velosef (Velosef). The transaction is expected to close in early 2026, and the specific amount was not disclosed. BMS stated that this divestiture will help it focus resources on core areas and optimize its business layout.

BMS divests major assets

According to data, in 1982, Shanghai Bristol-Myers Squibb was established by the American company Bristol-Myers Squibb and Shanghai Pharmaceuticals, the predecessor of Shanghai Pharmaceuticals Group.It was established as a joint venture between Xi'an Janssen and Sino-US Merck. This was the first Sino-US joint venture pharmaceutical company in China, earlier than Xi'an Janssen and Sino-US Merck.

It is worth noting that with the development of China's innovative drugsWith the rise of the Chinese market, many Sino-US joint ventures are exiting the market. If the Shanghai Bristol-Myers Squibb equity transaction is successful, the first three companies to enter China after the reform and opening up: Sino-US Shanghai Bristol-Myers Squibb, Xi'an Janssen, and Sino-US Merck will all exit the market.

Industry insiders believe that with the liberalization of policies allowing multinational pharmaceutical companies to enter China as wholly-owned enterprises, joint ventures have fulfilled their historical mission and are gradually withdrawing from the market. In the future, more foreign companies may choose to exit the joint venture model.

　　As an early enterprise in the Chinese market, many of the drugs under Shanghai Bristol-Myers Squibb are widely used by the general public.For example, it brought the first "pril-type" antihypertensive drug Captopril tablets in China, the "miracle drug" for hypoglycemics Metformin Hydrochloride Tablets, the third-generation anti-hepatitis B drug Entecavir Tablets "Boluding", and vitaminsThe company also produced over-the-counter (OTC) medications such as the tablet "Shierkang" and the cold medicine "Jiahe Baifuning." Shanghai Bristol-Myers Squibb was also the first joint venture to obtain FDA certification and export Western medicine preparations to the United States.

Thanks to a number of blockbuster drugs, Shanghai Bristol-Myers Squibb achieved operating revenue of 4.72 billion yuan in 2016, with sales and profit reaching record highs. However, in recent years, Shanghai Bristol-Myers Squibb's performance has deteriorated, primarily due to the continued centralized procurement of core products and increasingly fierce competition from peers. In the third round of centralized procurement in 2020, the prices of generic captopril and metformin were driven down to a penny per tablet, and Shanghai Bristol-Myers Squibb's original product failed to win the bid. Furthermore, its branded drug competition faces multiple pressures. In the OTC and health supplement sectors, where Baifuning and Shierkang are located, competition is increasingly fierce. Not only does it face competition from numerous domestic pharmaceutical companies, but similar products from other multinational giants are also steadily encroaching on the market.

Amidst the price war, Shanghai Bristol-Myers Squibb capitalized on its established reputation and capitalized on the opportunity to sell its business to Hillhouse Capital. Although its original drug had expired, some of its established brands remained popular with consumers in the Chinese market. After restructuring and cost-cutting, Hillhouse Capital was still able to profit from the acquisition.

Bristol-Myers Squibb's sale of its joint venture stake is also part of its transformation plan. According to its financial report for the first half of 2025, the company's cumulative revenue reached $23.47 billion, a 2.48% year-on-year decrease from $24.066 billion in the same period last year. This decline was primarily due to the impact of increased generic competition on its mature product portfolio and adjustments to US healthcare policies.

Bayer bets on China's innovation source

Industry insiders believe that BMS's sale of its equity and selected products in its China business is a prime example of a multinational pharmaceutical company's strategic adjustments in China in recent years. With the continuous development of the domestic pharmaceutical market and changes in the policy environment, more and more multinational pharmaceutical companies are re-evaluating their business layout in China, divesting non-core assets and focusing on core businesses to adapt to market changes and enhance their competitiveness.

While some companies are busy divesting their Chinese operations, others are expanding their presence .The alliance was established in China. Bayer's Co.Lab co-creation platform launched in Shanghai's Pudong District in September 2024, dedicated to building an ecosystem cluster in China encompassing diverse technology platforms and cutting-edge innovation. In May of this year, the platform was recognized as a large-scale open innovation center in Shanghai's Pudong New Area.

It is reported that the first batch of partners of Bayer Co.Lab Venture Capital Alliance are Shanghai Industrial Capital, Legend Capital, IDG Capital and Kangjun Capital. They will help the settled companies connect with leading international venture capital and private equity investment institutions and accelerate their connection with the global investment and financing network.

The Bayer Co.Lab Venture Capital Alliance, 　　launched in China, targets Chinese and global biopharmaceutical startups. The platform aims to bring together leading international venture capital firms, connect Bayer Co.Lab's four global co-creation platforms in China, the United States, Japan, and Germany, and cultivate the local innovation ecosystem, building channels for investment, financing, and strategic collaboration to more efficiently connect local startups with capital. Currently, Bayer Co.Lab has welcomed seven startups to join in China, including Yijieli Ke, Iminokang, Ruizheng Gene, Lingtai Ke Bio, and Tengdi Bio, with the latest additions being Yudao Bio and Aolu Pharmaceuticals.

MerckBehind "Stop in London"

As multinational pharmaceutical companies released their first-half financial reports in 2025, transformation, adjustments to regional development strategies, and downsizing became major trends. On September 10th, US pharmaceutical giant Merck & Co. announced it would terminate its early-stage drug development projects in the UK and cancel its £1 billion investment in a research and development center at the Belgrove Building in London's King's Cross. The campus, originally scheduled to open in 2027, will no longer proceed.

Merck also plans to withdraw from its Francis Crick Institute laboratory in London by the end of the year, a business restructuring that will result in the elimination of 125 jobs. The company stated that the UK government has underinvested in life sciences and failed to properly assess the value of innovative drugs and vaccines, leading to the decision to relocate related R&D operations to its existing US office.

Following Merck, Eli LillyAfter AstraZeneca, French pharmaceutical giant SanofiIt has also become the latest pharmaceutical company to suspend its R&D investment decisions in the UK. The root cause of this turmoil lies directly in the deadlocked drug pricing negotiations between the UK government and the pharmaceutical industry.

It is worth noting that unlike other markets around the world, the UK National Health ServiceThe core of the NHS system is to control high drug prices through a rebate scheme (effectively equivalent to kickbacks). Simply put, pharmaceutical companies are required to pay the government a proportionate share of sales, with the goal of "the higher the price, the more you pay." To a certain extent, this pricing mechanism gives pharmaceutical companies flexibility in setting prices. However, as pharmaceutical companies set prices higher, their "rebates" will also rise, and the percentage will be adjusted annually.

E-drug managers commented that while on the surface this appears to be a strategic adjustment by a multinational pharmaceutical company, in reality it has thrust the ongoing tug-of-war between the UK government and pharmaceutical companies over pricing and payment for innovative drugs from within the industry into the spotlight of global capital and public opinion.
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