Xi'an Janssen Pharmaceutical Ltd., the biggest subsidiary of US healthcare giant Johnson & Johnson in the Chinese mainland, is expected to see days be harder in the future.
It was established by Janssen-Cilag, a subsidiary of Jonson & Johnson, and four Chinese pharmaceutical firms in 1985 and with a total investment of CNY 290 million and a term of 50 years, it was 52 percent-controlled by Jonson & Johnson. The headquarters of it was in Beijing and the production base was in Xi'an. It performed well later and in line with people in the know, the profit tax it paid over the following two decades could even establish more than 20 entities similar to it. Notably, it once contributed to 45 percent of the sales Jonson & Johnson reaped in the Asia-Pacific market.
However, it began slowing down from 2000 and in line with people in the circle, this had a close tie with Shanghai Johnson & Johnson Ltd., a subsidiary Jonson & Johnson established in Shanghai, the financial hub of China, in 1995. Shanghai Johnson & Johnson, which was mainly engaged in the production and sale of OTC drugs and healthcare foods, was actually established as a joint venture between Jonson & Johnson and a Shanghai-based pharmaceutical firm initially and due to a 10-year loss-making operation, the Shanghai-based firm quit it in 2005. And by then, it became a wholly-owned subsidiary of Johnson & Johnson. Some industry observers believed that establishing it was actually a strategic move Johnson & Johnson took to consolidate it and Xi'an Janssen. And its establishment also urged the US firm to strengthen the control over the Xi'an-based one.
Johnson & Johnson saw stake in Xi'an Janssen rise to 70 percent in 2007, but because of the intention to control a 100 percent stake in the subsidiary, it laid a plan to introduce new products into the subsidiary on the table. And according to a new product introduction plan it released for the period from 2004 to 2014, more than 20 hi-tech products will be introduced into the Chinese market within a decade and sales of the products will account for 29 percent of the total.
An industry observer pointed out that Xi'an Janssen planned to merge Shanghai Johnson & Johnson at the beginning, but saw its OTC drug business be merged into the latter finally. It depended much on the business and saw up to 60 percent of the aggregate revenue be from the business once. Considering this, there was no doubt that days of it would be harder in the future.
