Pharma tycoon looks for overseas healthcare deals

Liu Dianbo, chairman of Luye Group Ltd, is on a hunt for overseas healthcare businesses as he seeks to expand beyond pharmaceuticals and tap rising demand from more affluent Chinese for higher-quality services.

After agreeing to buy an Australian hospital operator in a $688 million deal last year, the group is looking for more hospital assets to acquire outside China, Liu said in an interview this week in Jiangsu province. A professor-turned businessman, he plans to list Luye's healthcare arm in Asia within three years.

The group already has a publicly traded pharmaceutical business－Luye Pharma Group Ltd, which sells drugs for conditions including cancer and cardiovascular disease.

Liu's goal is to introduce more international hospital brands into the country as patients show a greater willingness to pay for better care. Public hospitals in China are overburdened by the rising incidence of illnesses like heart disease and diabetes, and patients often face overflowing waiting rooms and lengthy lines.

Luye is looking for hospital deals in regions including Australia, Singapore, Southeast Asia, the United States and Europe, and is putting a special focus on those with treatment specialties that can be useful for China.

By buying up established foreign brands, it would gain the financial ability to raise funds and bundle them later into an initial public offering. Liu plans to accomplish that within three years, possibly through a listing of that business in Singapore, Hong Kong or the Chinese mainland.

"Healthcare assets have to be listed because the cycle is long and requires large amounts of funding," Liu said.

The group has also acquired Singapore-based Vela Diagnostics to venture into precision medicine, while its affiliates have made similar acquisitions in other parts of Asia.

The pharmaceutical company hopes to have the extended-release version of its Parkinson's drug to be approved in the US by as early as the second half of 2018. Extended-release medicines typically deliver their ingredients more slowly into the bloodstream. It expects another schizophrenia medicine approved in the US in late 2017.

While Luye probably won't see new drugs coming out of the existing pipeline over the coming year due to regulatory delays, it is looking at other ways to boost growth, Liu said.

"We are still hoping to push out some relatively large products to the market through acquisitions, cooperation or business development domestically or overseas," said Liu.

Luye is not likely to license its drugs to another company to sell overseas, and prefers to build its own global capacity through M&As and tie-ups to market products in developed markets.

A former biology lecturer, Liu started his own business with two partners in 1994. By 2014, Luye had revenue of about 3.2 billion yuan ($480 million).