C&O Pharm

C&O Pharm: Controlling shareholder and chairman, Mr Gao has sold approx half of his 58.17% stake to Sumitomo Corp at S$0.50. Sumitomo will own 29.0% of C&O for S$96.2m. Completion of sale is conditional on Mr Gao serving a minimum of 3 yrs with C&O unless waived by Sumitomo. Last done price of co was at S$0.485…

This follows news of China implementing price caps for more than 174 medications, effectively reducing prices by avg of 19% by 12 Dec in a bid to curb inflation. Drugs account for 40% of health care costs and pharma sales is expected to increase by a further 25% to more than US$50b in 2011. This presents a viable long-term strategy for Sumitomo.