Business strategies

The overall aim of Chi-Med is to draw on the untapped wealth of knowledge and history of usage in the TCM industry to develop pharmaceutical and consumer products for the global market. In support of this aim, Chi-Med has developed three complimentary businesses with the following strategies.

• Discovery, development and international commercialisation of Western-approved pharmaceuticals derived from TCM botanicals

  TCM, with its botanical origins, has demonstrated its efficacy and safety under scientific scrutiny over several decades. We see it as a major and substantially untapped reservoir of novel drugs for the global pharmaceutical market. Our Drug R&D Division is dedicated to using the highest standards of modern science to identify and develop both botanical substances and small molecule compounds derived from TCM, which can deliver new treatments, especially in the areas of oncology and auto-immune diseases.

  The validation of our drug research and development business, reflected by the Eli Lilly deal, our existing partnerships with Merck KGaA and Procter & Gamble, and the successful Phase II proof-of-concept (“POC”) result on HMPL-004, gives us great confidence that we have a first-in-class operation with very high potential that justifies the accelerated investment that we expect to make in 2008.

• Expansion of presence in the fast growing Chinese healthcare industry through organic growth and acquisitions

  Chi-Med sees particularly strong opportunity in the China Healthcare area and due to our range of fast growth and profitable products can target to maintain organic growth rates of over 20% for the foreseeable future.

  The Group’s China Healthcare strategy is to combine organic growth with acquisition. A key strength of our business is the infrastructure, reputation, experience and depth of connections of Hutchison Whampoa in China, all of which we leverage and which provides significant support in identifying potential, value creating acquisitions and joint ventures (collectively “acquisitions”). We are currently engaged in due diligence on multiple projects and hopeful to begin completing such acquisitions during the current financial year.

• Developing a global consumer brand in TCM derived products and services

  With our Sen business, we have always stated that one route to accelerated growth is to leverage synergy with Hutchison Whampoa’s global chain of over 7,800 health and beauty shops, 1,600 of which are luxury focused and consistent with the Sen brand image. We believe this will be transformational for our consumer products division.