Orion Holdings to Enter Chinese Pharmaceutical and Bio Market

[Asia Economy Reporter Choi Saeng-hye] Orion Holdings announced on the 23rd that it has signed a joint venture agreement with the Chinese state-owned pharmaceutical company ‘Shandong Lukang Pharmaceutical’ to enter the bio business. This marks a full-scale entry into the 160 trillion won Chinese pharmaceutical and bio market, beyond the confectionery market. Orion Holdings and Lukang will invest 65% and 35% of the shares respectively and will promote the business through a joint venture company tentatively named ‘Shandong Lukang Haoliyou Biological Technology Development Co., Ltd.’

Orion Holdings will play the role of discovering excellent domestic bio companies and serving as a partner for entry into China. To this end, it regularly holds the ‘Korea-China Pharmaceutical and Bio Development Forum,’ which includes top experts from the domestic financial sector in the pharmaceutical and bio fields. The bio technologies discovered at the forum undergo objective technical evaluation and marketability verification by experts from the bio academia and medical fields in Korea, China, Japan, and other countries. The final selected domestic bio technologies will be pushed forward for clinical trials and regulatory approval within China by the Chinese joint venture, while Lukang will be responsible for product manufacturing and sales within China.

Orion Holdings has selected ‘diagnostic kits’ for early detection of high-incidence ‘cancer severe diseases’ and ‘infectious diseases’ as its core business area. The strategy is to initially build bio business capabilities and then expand the business scope long-term into synthetic drugs and new drug development.

Initially, Orion plans to pursue regulatory approval and sales in China for the tuberculosis diagnostic kit from the bio-diagnostic specialist company ‘Sugentech’ and the colorectal cancer diagnostic kit from ‘Genomictree.’ China ranked second worldwide in tuberculosis patient incidence as of 2019, and the number of elderly tuberculosis patients is expected to increase sharply due to aging. Sugentech’s ‘tuberculosis diagnostic kit’ is a blood-based tuberculosis diagnostic technology that can diagnose tuberculosis with a small amount of blood. It is expected to receive strong responses in the Chinese market, which mainly relies on X-ray examinations.

Through Genomictree, Orion will introduce a ‘colorectal cancer diagnostic kit’ that can detect colorectal cancer with 90% accuracy using only 1 to 2 grams of stool. The penetration rate of colonoscopy equipment in Chinese medical institutions is only about 35%, and the Chinese government’s need for early cancer diagnosis to alleviate health insurance financial burdens makes the market potential in China significant.

Heo In-cheol, Vice Chairman of Orion Holdings, said, “Based on Orion’s brand power in China, high market trust, and business network, we will showcase Korea’s excellent bio technologies in the local market and serve as a platform contributing to the growth of the domestic bio industry. Following convenient meal replacements and beverages, we will successfully promote the bio business as a new growth engine for the group and leap forward as a global food and healthcare company.”