Collagen Solutions to form Chinese joint venture

Life sciences firm Collagen Solutions has annnounced plans to create a joint venture targeting the huge Chinese market.

Collagen Solutions develops components for regenerative medicine and medical devices. Picture: Contributed

The Glasgow-based company, which last week secured a supply deal with drugs giant Merck, said the tie-up with China Resources & Investment Vehicle (Cre8ive) would help to “maximise the potential of our business and to open up the market in China”.

Aim-quoted Collagen, which develops components for use in regenerative medicine and medical devices, will control 60 per cent of the joint venture, to be based in Beijing. Cre8ive, a conglomerate focusing on investment opportunities in China, will provide administrative and regulatory support along with “territory expertise”.

Collagen chief executive Stewart White said: “The purpose of the joint venture company will be to expedite the marketing and supply of our medical-grade collagen materials and regenerative medicine products to customers within the People’s Republic of China. It is our intention to build our business in China as well as exploring opportunities to expand our activities in finished medical devices.”

White added: “We believe that we have found a trusted partner in Cre8ive and that the company can benefit from their many years’ experience in the territory. Our control of the joint venture significantly de-risks this investment, whilst opening the business to significant upside both in terms of the supply of raw materials, but also the ability to increase value added opportunities, in what is clearly a sizeable and growing healthcare market forecast to grow to $2.5 billion (£1.7bn) in wound care alone by 2020.”

Mike Mitchell, analyst at house broker Panmure Gordon, said: “Collagen Solutions is clearly flagging its ambitions in terms of looking at new markets and mechanisms to drive future growth – we note, again, the recent supply agreement with Merck – and is aiming to take advantage, for example, of the growing China wound care and orthopaedics markets.”