Financial intelligence for Asia's healthcare markets
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Analysis: Winning in Vietnam

In the second part of his series about operating healthcare companies across the APAC region, Marcus Pitt, managing partner of Fortuna Corpus Asia, focuses on the opportunities in Vietnam.

For the last two years, I have had the privilege of working with one of Vietnam’s largest pharmaceutical companies, Traphaco, in the capacity of a board and sub-committee member. Having this opportunity with a domestic company has provided me a unique insight into the challenges and opportunities in the market. Similar to the Indonesian setting, Vietnam enjoys steady double digit growth and this looks set to continue.

Larger pharmaceutical companies such as Traphaco, DHG, Imexpharm and Domesco (with Sanofi the larger of the multinational companies) enjoy significant market share and are typically categorised by their generic and traditional medicine portfolios. There has been a recent push by the government to lift the image and potential of domestic companies. They have done this through engaging with service providers and healthcare professionals to promote the use of locally produced medicines and the development of a 2030 vision for the industry. The government will be encouraging greater investment in the industry and has the ambition of Vietnam becoming a regional hub for manufacturing and innovation.

Vietnam has also attracted a mix of investors. Groups such as Taisho and Abbott have partnered and taken positions with local pharmaceutical companies – a strategy aimed at creating a truly local presence. Similarly, financial investors have also seen opportunities. Mekong Capital, to take just one example, was an early investor in Traphaco and has contributed significantly to the group’s continued growth and performance since 2011. Other financial investors such as Quadria Capital, have focused on the hospital sector with a recent investment in FV Hospital in Ho Chi Minh City.

Another interesting recent development is in the pharma retail space. New startup Pharmacity based in HCM attracting funding earlier this year from a number of local investors. Last year, Saigon Asset Management acquired a 15% stake in My Chau Pharmacy, a retail group that has operated in Vietnam for more than 30 years. New regional healthtech startups are also seeing Vietnam as an opportunity. Recently Singapore based mClinica raised more than US$6 million in a series A round for the purposes of continued expansion across the region. The tech startup has a platform that helps government, Industry and donors; it collects information / data to help groups better access quality medicines and create efficiencies across the value chain.

The government is also focused on improving access to medical treatment facilities. Top foreign investors of hospitals include European and US groups, such as Eukaria, a company that owns Hanoi French Hospital. In addition to adding more hospitals, improvements of the healthcare system open up many opportunities for foreign medical equipment and pharmaceutical manufacturers. Manufacturers of medical equipment and devices are being encouraged to invest and establish operations in Vietnam and recent changes in policy allow foreign firms to own a majority share in a local entity. Currently, most products are being imported and the government is providing a range of policy changes and incentives to encourage both domestic and foreign firms to invest in locally manufactured products. 

I have tried to highlight just a few examples, of course there are many more. There are many challenges and understanding this market, its culture, investing in relationships and partnering with local players is key. Opportunities exist across the whole value chain: drug manufacturing, distribution, service providers (and auxiliary services), labs, diagnostics, and so on.

Marcus Pitt is a board member, advisor and consultant for the healthcare and life-sciences industries across southeast Asia. He can be reached via email: marcus.pitt@fortunacorpusasia.com.

Posted on: 01/11/2017 UTC+08:00


News

Beijing-based healthcare service platform Miaoshou Doctor has completed a ¥1.5 billion (US$232 million) Series F round of financing.
Chinese digital technology company, Xisoft Technology, which focuses on hospital operation management, has raised ¥100 million ($15.65 million) in Series A+ financing.
Hearing health company Olive Union has closed a $7M Series B round led by Beyond Next Ventures, Bonds Investment Groups and Japan Policy Finance Corporation.
Long Hill Capital, a venture capital firm in China, has closed on more than $300 million for its third fund on 15 March.
Eluminex Biosciences, an ophthalmic biotechnology company has completed a $50 million Series A financing co-led by Lilly Asia Ventures, GL Ventures (venture capital arm of Hillhouse Capital), and Quan Capital.
TVM Capital Healthcare, a global private equity and growth capital firm focused on emerging markets, has announced two team additions today.
In partnership with VeChain and DNV GL, Renji Hospital, a hospital in China affiliated with the Shanghai Jiaotong University School of Medicine, has launched the world's first blockchain-enabled intelligent tumour treatment centre.
Hong Kong-based BuyHive, a new global sourcing start-up that connects buyers with trusted verified overseas suppliers, has launched a PPE programme to help US companies optimise their post-Covid supply chains.



Analysis

L.E.K. Consulting’s Fabio La Mola tells HealthInvestor Asia about a healthcare market going through major changes – creating significant opportunities for investors in the region.
Edwin Tong, senior minister for health, explains how the Ministry of Health in Singapore is supporting the growth in the number of seniors with Alzheimer's.
Penny Wan, regional vice-president and general manager, Japan and APAC, Amgen, writes about the public health challenge of cardiovascular diseases.
French-based international ophthalmic optics company Essilor has signed Letters of Intent with the Royal Government of Bhutan and the Central Monastic Body to strengthen the country’s vision care infrastructure.
April Chang, country manager at Cigna Singapore, argues that wellness programmes at work can lead to reduced absenteeism, higher productivity and increased morale among employees.
Steven Fang understands how to set up a healthcare company. Not only is he chief executive and founder of ASX-listed oncology company Invitrocue, he was also the founder of Singapore-based Cordlife Group, a healthcare company which provides cord blood and cord lining banking services.
Imagine a world in which you can consult with your doctor via video. She asks for a blood sample, which can be collected and analysed from a device in your home. After that is diagnosed, the prescription is automatically sent to the pharmacy and Uber then picks it up. The time from diagnosis to drugs at your home is only 60 minutes.
The digitisation of health data through blockchain technology is a groundbreaking solution that will empower patients and provide them with better access to healthcare.


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