The two companies are now in a honeymoon period.
GlaxoSmithKline now understands that this Hong Kong-based pharmaceutical company has unknown research capabilities and can create a variety of blockbuster new drugs.
For the sake of current interests and future cooperation, they are willing to make concessions as long as it does not touch upon issues of principle.
As for the Pumpkin Vine Pharmaceutical Company, they can only be regarded as a rootless duckweed now. Their own strength is too weak, so weak that without external support, they may not even be able to survive in Hong Kong.
Don't forget that this is 1986, more than ten years away from 1997. Now those foreigners are still the ones who have the final say, and the one with the photo hanging on the wall is still that "super long standby".
Therefore, we maintain good relations with major pharmaceutical giants in the world and, when necessary, use their power to maximize our profits.
Just like the acquisition of Margaret Hospital, if there was no help from GlaxoSmithKline, would it have been sold to a small, unknown company with no experience in hospital management?
Would they be willing to lower the price so much? Even if you had the money to acquire the hospital, could you successfully hand it over without GlaxoSmithKline's full cooperation?
Although Chen Xia gave up most of the benefits, he also received generous rewards.
Although the first patent fee has not yet been paid, it can be expected that the patent fees of the three companies will not be less than US$500 million a year.
500 million US dollars, this is almost like picking up money for free for Chen Xia.
Moreover, the Chinese and Hong Kong markets are still in his hands. Just these two markets are enough to make him a little fat man.
Once China develops, I'm afraid he will eat too much and die of it.
So even though Chen Xia was not satisfied with the patent licensing method of cooperation, he did not say anything too harsh. Business negotiations are, after all, a process of mutual compromise.
"Mr. Chris, I think we have a little disagreement now. Regarding sildenafil, we originally wanted to produce and sell it ourselves."
"Oh no, Chen, we are friends. You can't abandon your friends. And without our help, it will be very, very difficult for you to open up the international market."
Chris became anxious when he heard this and quickly gave some kind "advice".
Chen Xia certainly understood what this "advice" meant, so he smiled and said, "So you see, there's a disagreement. We at Pumpkin Vine can't always be controlled by you pharmaceutical giants, right?"
Chris was about to explain something, but Chen Xia waved his hand:
"I know that from a business perspective, you don't want Pumpkin Vine to grow too quickly. After all, competitors are enemies, and you don't want to see a new competitor."
Chris nodded very frankly:
"You're right, Chen. Believe me, if your actions threaten those pharmaceutical giants, they'll have plenty of ways to make it difficult for you to move forward. Even if you have good drugs, it will be difficult to promote them."
This is a nice statement, as if from the pumpkin vine's perspective and for its own good, but in fact the threat has not been reduced at all.
Chen Xia thought for a moment and said, "How about this? I have a new proposal. We can adopt a new model. That is, we cooperate with each other and establish a new wholly-owned company. How about it?"
Chris didn't expect Chen Xia to make such a proposal. He originally thought he would ask for an increase in patent fees.
"Chen, could you please elaborate on your suggestion so I can report it to the board of directors? You know, I don't have the final say."
Chen Xia explained, "We will set up a wholly-owned company in Hong Kong. We'll invest in it with our patents, and you'll invest in it with your capital and sales channels. We can discuss the specific division of equity later. What do you think?"
This form of cooperation is actually the most beneficial to the pumpkin vines.
The first one can maximize profits. The reason why sildenafil is priced high is because of the research and development costs. In fact, from the perspective of production costs, it is super cheap, but the selling price is super expensive and the profit is super high.
If we can cooperate to set up a factory, the profit will be far higher than the 5% patent fee, which is simply an astronomical figure.
Secondly, the closer the cooperation with GlaxoSmithKline, the more harmonious the relationship between the two parties will be. As an old British company, they still have a big presence in Hong Kong, and we have to give them face in all aspects.
This will also help Pumpkin Vine Pharmaceutical Company to develop stably and grow steadily before 1997, so that it will not be noticed by any capitalist who wants to take over Pumpkin Vine.
Without a backer, Pumpkin Vine Company would be completely vulnerable.
The two sides finished the first round of negotiations. Before Chris left, Chen Shuqin brought in a bag of small gifts.
We are allies now, and accepting some small gifts is not a big deal. Mr. He is just accepting the medicines produced by Pumpkin Vine Company.
Of course, the drug was a full 20 boxes of Sildenafil. Chris really wanted to shout, "I appreciate it."
In fact, this is just the surface. Why were there only three of them at the scene during the negotiation? It was because there were some things that could be discussed privately.
For example, Chen Shuqin promised that as long as Chris could facilitate the establishment of a joint venture between the two companies, it would maximize the interests of Pumpkin Vine Company.
Then Chris will have an additional fee of $2 million in a secret account in Switzerland.
How could GlaxoSmithKline's manager, Chris Grayling, not love such a sophisticated company as Pumpkin Vine Pharmaceuticals?
How could he not help to speak well of the company in the board of directors, or even mislead the board of directors in favor of Pumpkin Vine Company?
$2 million wouldn't make him risk his life, but it would definitely make him the best "accomplice".
Two weeks later, after several rounds of negotiations, the two parties finally reached a business agreement that satisfied both parties:
England's GlaxoSmithKline acquired the Pumpkin Vine Xiangjiang Pharmaceutical Factory in the Tsuen Wan Industrial Area for US$200 million.
This item alone made Pumpkin Vine a huge profit. Don’t forget that the previous acquisition was only 70 million Hong Kong dollars, less than 10 million US dollars.
In addition, GlaxoSmithKline invested US$200 million and Pumpkin Vine Pharmaceuticals provided the sildenafil patent, and the two parties established a new pharmaceutical factory - Hong Kong Tsuen Wan Pharmaceutical.
GlaxoSmithKline holds a 75% stake and has absolute controlling rights;
Pumpkin Vine holds a 25% stake and does not ask for anything other than financial supervision rights. In any case, GlaxoSmithKline is definitely more experienced in pharmaceutical factory management.
As for the old employees of the former Australia-America Pharmaceutical Factory, namely Ye Shirong and others, they were asked to stay in the mainland. All the pharmaceutical factories in Hong Kong were sold, and the mainland would be developed as a production base in the future.
It seems that Pumpkin Vine suffered a huge loss from this equity. After all, the sales of sildenafil are at least tens of billions or even hundreds of billions of dollars a year.
But the same thing goes, if you have a patent but no channels, no matter how good the medicine is, it will be impossible to promote it. There is nothing you can do about it.
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