Page 19 - Bloomberg_Businessweek

BUSINESS Bloomberg Businessweek January 29, 2018

may wind up facing, they may have no choice but
to ask the bankruptcy courts to help them dispose
of those cases,” he says.
Campanelli has heard the B-word before. “The
use of the word ‘bankruptcy’—it’s not something
that we’re contemplating at this point in time,”
he says. “We’re looking to collaborate to deal
with the opioid situation. If we ever got to that
process, and I’m not saying that we’re thinking
of it, it would be years and years before we would
be addressing it.”
It’s also possible that any opioid manufacturer
settlement could be structured in such a way that
Endo doesn’t end up underwater. “There could be
some giant master settlement—it would just make
life that much more difficult for Endo, but I don’t
think these state AGs are going to make Endo go
out of business,” says Gabelli’s Kedra. Arranging bottles
Despite the financial and legal clouds, Endo at Kweichow Moutai’s
factory in Renhuai
officials say they’re concentrating on expand-
ing the business and working on new injectable
drugs. The company is also developing one of
its key products, Xiaflex, which is used to treat Grain is prepared at
a hand deformity and curvature of the penis, for the company’s distillery
new uses such as improving the appearance of in Guizhou
cellulite. Cosmetic drugs, such as Allergan Plc’s
Botox, have turned into powerhouses for pharma 17
companies, and Campanelli has been praising
Xiaflex’s prospects. “It fits the model of the new
Endo,” he says. Campanelli, however, still has are available. The buying frenzy and resulting
plenty of problems from the old Endo to fix first. inventory shortages extend nationwide.
—Cynthia Koons and Jef Feeley Moutai baijiu’s fiery flavor and potential to
appreciate in price are driving the insatiable thirst.
THE BOTTOM LINE Generic drugmaker Endo has agreed to Demand has pushed the company’s market value
pay billions of dollars in settlements for vaginal mesh suits—and
possibly faces much more for testosterone and opioid claims. to more than $145 billion, well past that of British
whiskey giant Diageo Plc, owner of such popu-
lar brands as Johnnie Walker and Smirnoff. The
Chinese company sells each bottle of its main Flying
China’s Liquor Giant Fairy brand to distributors for 969 yuan ($150) and
sets a suggested resale ceiling of 1,499 yuan, yet
Needs More Booze they routinely go for double that online and off. Its ○ Moutai’s 2016 revenue
website is out of stock. On Chinese e-commerce site
JD.com, a 500 milliliter bottle of 80-year-old Flying
Fairy is listed for 207,999 yuan. 94.7%
○Moutai,theworld’smosthighlyvalued Chinese buyers say they like Moutai’s baijiu China
distiller,can’tmakeenoughofitsfieryspirits for its complex flavor and a purity that prevents 5.3%
QILAI SHEN/BLOOMBERG; DATA: COMPILED BY BLOOMBERG You know you’re in Maotai when you smell it. The grain and water used to make it must come from Rest of
hangovers—but the company’s special manufac-
turing process also puts limits on production. The

Maotai, and the brew must be buried in urns for
the world
picturesque town of about 100,000 in southwest-
at least four years before it’s sold.
ern China is home to the world’s most valuable
All that gives Moutai’s chairman, Yuan
liquor company—and the soy sauce-like scent of the
Renguo, the difficult task of sustaining growth
Chinese grain alcohol baijiu made by Kweichow
even as his company literally runs out of
Moutai Co. permeates the main street. But inside
the liquor stores along the road, the distiller’s main
liquor. He says the answer will lie partly
brands are sold out. Lines form wherever bottles
in introducing more ultrapremium and