Waters CEO highlights China as key innovation source in the biopharma market
Water CEO Udit Batra said China has emerged as a critical source of innovation in the global pharmaceutical industry despite some investors remaining wary of the region.
“They are basically the leading biotech industry globally right now,” he said on “Mad Money.” “About a third of the molecules licensed by major pharmaceutical companies today come from China.”
On Tuesday, Waters reported adjusted earnings per share of $2.70, beating estimates of $2.31. Revenue also beat expectations, coming in at $1.27 billion versus estimates of $1.20 billion.
Much of that strength came from the company’s pharmaceutical segment, which grew 14%, driven by broad-based demand among major drugmakers, contract manufacturers and Chinese biotech firms. Regionally, growth was strongest in Asia.
“Growth was broad-based with high single-digit growth in the Americas and Europe,” Batra said in the earnings call. “Asia grew about 30%, led by over 50% growth in China, low-teens growth in India and low-teens growth in Japan.”
Batra said the performance reflects a deeper shift underway in China’s pharmaceutical market, where innovation is compensating for weakness in other areas.
“The generic drug segment in China has been in decline for many years due to price restrictions,” he said. “But innovation is rewarded.”
As more innovative drugs are developed in China, Batra noted that contract manufacturers are growing rapidly, not only producing drugs but increasingly handling the entire process from discovery to development.
“They are trying to create their own versions of Pfizer or AstraZeneca,” he said.
