Bristol Myers Squibb has concluded a landmark transaction by selling its 60% controlling stake in Sino-American Shanghai Squibb Pharmaceuticals (SASS), marking the end of an era for what was the first U.S.-China pharmaceutical joint venture established in 1982. The move represents a pivotal shift in BMS's global strategy as the company reallocates resources toward innovative therapeutics.
Strategic Realignment Toward Innovation
The divestiture aligns with BMS's long-term strategy to prioritize high-growth areas such as oncology and immunology. The joint venture primarily manufactured off-patent drugs including cefradine capsules, metformin hydrochloride tablets, Baraclude, and Bufferin—legacy products that no longer aligned with BMS's innovation-driven roadmap.
"The sale is meant to better align global resource allocation and regional market strategy, ensuring that Bristol Myers's products remain reliably available to patients in China and around the world over the long term," according to an insider at the New York-based firm.
Importantly, the sale does not impact BMS's core innovative drug business in China, which includes high-margin products like Opdivo and Eliquis. This strategic pivot allows BMS to streamline its global supply chain while redirecting capital toward R&D for cutting-edge therapies.
Industry-Wide Transformation
BMS's divestiture reflects a broader industry trend of multinational pharmaceutical companies exiting non-core markets in China. This shift is driven by China's centralized drug-buying program under its national health insurance system, which has sharply reduced profits from off-patent branded drugs.
Several global drugmakers have already sold their off-patent drug businesses in China, including UCB, Eli Lilly, GlaxoSmithKline, Takeda, and Pfizer. Belgium's UCB notably sold its local business for $680 million last year, highlighting the sector's realignment away from legacy assets.
The SASS Plant, formed with Shanghai Pharmaceuticals Holding and Sinopharm Group after China started its economic reforms and opening-up, represents a 58,000-square-meter Shanghai facility that has served as a cornerstone of U.S.-China pharmaceutical cooperation for over four decades.
Continued Commitment to Chinese Market
Despite the divestiture, BMS remains firmly committed to China through its innovative drug portfolio. The company plans to accelerate the introduction of cutting-edge treatments for a wider range of diseases into the Chinese market while working to improve drug accessibility.
This strategic approach mirrors industry-wide trends where legacy pharmaceutical assets are increasingly viewed as opportunities for private equity firms rather than core growth engines for multinational corporations. The transaction ensures long-term supply reliability for BMS's core portfolio while mitigating exposure to price pressures in China's mature drug market.
The sale of SASS represents both an end and a beginning—closing a historic chapter in U.S.-China pharmaceutical cooperation while positioning BMS for future growth in China's evolving healthcare landscape focused on innovative therapeutics.
