Brokers post earnings drop and cut salaries
February 13th, 2009Latest 2008 figures from 50 stock brokerage firms showed an average 68.91 percent fall in profit from 2007 and a 11.99 percent cut in annual executive pay.
Industry analysts said the pay cut in 2008 would have been much deeper if it had not been for the deferred payment of the 2007 bonus.
Of the 50 brokerage firms, five said their average executive compensation was above one billion yuan ($146 million), with Guotai Jun'an Securities Co topping the list with 3.07-billion-yuan total staff payout, up 96.8 percent from a year before. The other four were Guangfa Securities, China Merchants Securities, CITIC China Securities and Guoxin Securities.
The total staff payout of the five brokerage firms totaled 9.11 billion yuan, exceeding the combined 7.4 billion yuan of the other 45 companies.
Roche Seeks Biotech Licensing, Takeovers in China
February 12th, 2009Roche Holding AG, Switzerland’s biggest drugmaker, may make its first acquisition of a Chinese biotechnology company or buy rights to a compound developed in the country later this year.
Two executives from Roche’s drug-partnering unit based in China are scouting for opportunities, including licensing experimental medicines, Lee Babiss, the head of Global Pharma Research at the Basel, Switzerland-based company, said in a Feb. 4 interview.
“They’re looking not only for those types of assets but also drug formulation because know-how is really very, very deep in China,” Babiss said. “We are also narrowing down a few opportunities that might involve mergers and acquisitions or simple in-licensing.”
Chief Executive Officer Severin Schwan said earlier this week that the drugmaker is “constantly” looking for acquisition targets in addition to the planned $42.1 billion purchase of partner Genentech Inc. Roche, which reported a drop in second-half net income on Feb. 4 and said earnings may not grow this year, went hostile in its bid for full control of Genentech a week ago after failing to secure a negotiated deal.
Bigger Slice
Pharmaceutical companies are seeking a bigger slice of sales in emerging markets such as China as revenue in mature markets in the U.S. and Europe sags. The deepening global recession is spurring industry consolidation as governments increasingly favor generics and cheaper medicines as a way to stem the rising cost of health care.
Roche spent about 100 million Swiss francs ($85.4 million) in research and development in China from 2004 to early 2008, focusing on cancer, arthritis and anemia. The Swiss drugmaker, which opened its first subsidiary in the country more than 80 years ago, operates four sites in Shanghai and Hong Kong with a total of 2,000 staff.
Roche’s hostile bid for South San Francisco, California- based Genentech is 2.8 percent lower than the price it initially offered in July. It follows a $68 billion offer by Pfizer Inc. for U.S. peer Wyeth last month.
Genentech, whose Avastin and Herceptin cancer drugs have made Roche the world’s biggest seller of anti-tumor medicines, has helped the Swiss drugmaker grow faster than its peers and left it less exposed to patent expirations than Basel neighbor Novartis AG or Pfizer, which is the world’s largest drugmaker.
Harvard Graduates
Roche is conducting about six research projects in China and is working with a local partner on an experimental cancer treatment. The collaboration isn’t a “traditional” licensing relationship, Babiss said, without providing details.
The Swiss drugmaker is also looking to hire “excellent” scientists in China and is transferring more chemistry-related research to partners there, Babiss said.
“Most of the people that we’ve hired that have come back were trained at Harvard and MIT and these are brilliant people,” Babiss said, referring to Harvard University and the Massachusetts Institute of Technology. “At the beginning it was chemists, now the biologists are coming over. More of them are going to come back to China and shape that environment.”
Germany’s Bayer AG, Sanofi-Aventis SA of France, and London-based AstraZeneca Plc are among European rivals also expanding their presence in China. Economic growth in China and India is creating pharmaceutical markets that are growing twice as fast as those of developed nations, PricewaterhouseCoopers LLC said in a report last year.
Science Spin-Offs
GlaxoSmithKline Plc, the world’s second-largest drugmaker, in 2007 earmarked $40 million for a research and development facility in Shanghai. Novartis, the same year, decided to open a $100-million research center in the same city.
Roche may also create spin-offs in the country by helping scientists to set up their own companies with compounds licensed from the Swiss drugmaker, he said. Roche hasn’t lost many scientists in China, though “eventually in that type of dynamic environment people will leave,” he said.
“The question is do we want to lose the talent or do we want to have some hook back to that talent and I’d rather do the latter,” Babiss said. “If someone’s going to leave, I’d say well alright you want to leave, you’re entrepreneurial - how can we help you leave?”
Babiss is considering hiring “a few people” with the understanding that in two or three years they would leave and form a startup.
“This is all about testing new ways of doing drug discovery,” Babiss said. “This won’t work in New York or the U.S. or here Basel, but it may work in China.”
Bayer says to build 100 mln euro R&D centre in China
February 12th, 2009BEIJING, Feb 12 (Reuters) - A unit of Bayer AG (BAYG.DE) will spend about 100 million euros ($129 million) over five years to build a research and development centre in Beijing, the company said on Thursday.
Bayer Schering Pharma, a division of Bayer HealthCare, will build the centre, becoming only the third country besides Germany and the U.S. to host a global R&D centre for Bayer Schering, it said in a statement.
China is the third largest market worldwide for the Bayer group. The new centre aims to include Asian patients earlier in global drug development, it said.
"Our goal is to build a world class organization here in Beijing that will lead drug development not only for China but also for other Asian countries," said Kemal Malik, a Bayer Schering Pharma board member, in the statement.
China said last month it planned to spend about $124 billion on health care over the next three years, aiming to improve basic medical insurance, expand local-level clinics, improve the public health system and initiate pilot public hospital programmes.
Foreign health-care firms are seeking to fill a huge gap in China's health care sector that leaves hundreds of millions of people with little or no coverage.
GlaxoSmithKline Plc (GSK.L), the world's second-largest drug maker, said last year it planned to double its R&D staff in China to 350 people in the next few years, as China could become the world's fifth-biggest pharmaceuticals market by 2010.
Bayer says to build 100 mln euro R&D centre in China
February 12th, 2009BEIJING, Feb 12 (Reuters) - A unit of Bayer AG (BAYG.DE) will spend about 100 million euros ($129 million) over five years to build a research and development centre in Beijing, the company said on Thursday.
Bayer Schering Pharma, a division of Bayer HealthCare, will build the centre, becoming only the third country besides Germany and the U.S. to host a global R&D centre for Bayer Schering, it said in a statement.
China is the third largest market worldwide for the Bayer group. The new centre aims to include Asian patients earlier in global drug development, it said.
"Our goal is to build a world class organization here in Beijing that will lead drug development not only for China but also for other Asian countries," said Kemal Malik, a Bayer Schering Pharma board member, in the statement.
China said last month it planned to spend about $124 billion on health care over the next three years, aiming to improve basic medical insurance, expand local-level clinics, improve the public health system and initiate pilot public hospital programmes.
Foreign health-care firms are seeking to fill a huge gap in China's health care sector that leaves hundreds of millions of people with little or no coverage.
GlaxoSmithKline Plc (GSK.L), the world's second-largest drug maker, said last year it planned to double its R&D staff in China to 350 people in the next few years, as China could become the world's fifth-biggest pharmaceuticals market by 2010.
Resume helps migrants too
February 12th, 2009More rural migrant workers should learn how to use resumes to enhance their job-seeking missions, says an article in Dazhong Daily. The following is an excerpt:
At a recent job fair in Wuhan, Yu Bo, a 41-year-old rural migrant worker, used a carefully designed resume, rarely used by his peers, to win the hearts of recruiters.
Yu designed his resume as fashionably as college graduates usually do - he put into a file holder all the sheets that describe his work experience, skills and talents, achievements, and various types of certificates and diplomas. A secondary technical school graduate as Yu is, he left a deep impression on recruiters.
Usually, resumes seem to be the exclusive tool for college graduates to find jobs and few migrants have ever used resumes to boost their chances of being hired. Yu's innovative action has set a good example for his peers.
Rural migrant workers have long been the disadvantaged group in the job market - they don't dress up for job fairs and don't expect too much about working conditions and payment; they lack confidence and have few skills to sell themselves to the market.
Today's rural migrant workers are no longer only working with their muscles. They should rely more on their brains. Resumes are an effective tool for them to show off their talents and past achievements to their would-be employers
Companies to inform govt of layoffs 30 days prior
February 11th, 2009As layoffs and labor disputes become frequent with the global economic slowdown wiping out more businesses, the central government yesterday told employers to inform trade unions of their plans of mass layoffs at least 30 days in advance.
If a company plans to layoff more than 20 employees, or over 10 percent of the total staff in one go, it must submit written reports to the local labor and social security department 30 days prior to the action, the State Council said in a statement issued on its official website (www.gov.cn) yesterday.
The State Council emphasized that priority should be given to ensure the legal rights of the employees.
Moreover, employers should not refuse to pay for social insurance as long as the working relations still exist, it said.
Local labor officials should keep a watch on such companies to ensure employers do not flee or postpone wages and insurance payment, it said.
Mo Rong, deputy chief of the labor science research institute under the Ministry of Human Resources and Social Security, said stable employment should be the top priority under the current financial circumstances.
"In the long term, mass layoffs are not good for the development of an enterprise," he said.
The government has launched a series of favorable policies "to either reduce or postpone five types of social security insurance fees to give private enterprises some relief", he added.
"The State Council's notice reiterated the regulation of Labor Law, and it is a good reminder to both enterprises and employers," Li Kui, a lawyer of the Beijing-based Yingke Law Firm, told China Daily.
"But I hope the regulation would be further clarified, as different scales of companies and official organizations that manage layoffs need to be more clear," he said.
Meng Qinghuan, an employer of a Beijing-based fund management company, said he was doubtful if the new regulation would be implemented successfully.
"Some small enterprises have no ability to anticipate the crisis and go bankrupt overnight," he said.