<h3>The Challenge</h3>
<p>As Celltrion continued to grow and expand across Europe, the regional treasury hub in Hungary became the primary purchasing entity. This Hungarian center would sell the purchased products to Celltrion subsidiaries around the world, receiving payment from the subsidiaries in each of their local currencies. Celltrion Healthcare did not wish to open accounts in all the currencies of the subsidiaries, as it knew that this would be complicated and costly from an efficiency perspective. Instead, it sought an automated solution which would provide FX centralization, full control, and instant visibility so that it could mitigate currency risks and more effectively manage cash. The currencies initially in scope were Danish Krone, Swedish Krona, Norwegian Krone, Swiss Franc, Pound Sterling and Romania Leu.</p>
<h3>The Solution</h3>
<p>Citi has been providing Celltrion with global cash management since 2018, and we have formed a strong relationship with the company that allowed us to understand the challenges and suggest an integrated FX solution that could simplify operations. Citi proposed a process for Celltrion Hungary whereby FX spreads could be pre-agreed and locked in when the subsidiaries were sending local currency payments. The Hungarian entity would receive the payments in a single currency, at the expected exchange rates, without having to open multiple accounts. The speed of implementation was also important for Celltrion. Citi was able to set up the solution in under 24 hours, and the day after implementation the company was up and running, immediately benefiting from the solution. After the success of the initial currencies in scope, Celltrion has already started adding more, such as Canadian Dollar, and continues to look for further opportunities.</p>
<h3>The Benefits</h3>
<ul>
<li>Speed: No technological implementation needed</li>
<li>Automation: Automated FX conversion without manual interruption</li>
<li>Cost efficiency: Negotiated pricing in advance, no foreign exchange markups from suppliers, and reduced 3rd party bank charges on local currency payments</li>
<li>Simplicity: Simple, straight through wire payments that allowed the company to redeploy resources to other important tasks</li>
</ul>
<p>&nbsp;</p>
<p><img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/64834692ef207e3f74ae09e1.PNG" alt="VIEW ALL INSIGHTS 2023.PNG"></p>

Case Study: Multi-Currency Payment Solution for Healthcare Company

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INDUSTRY REPORT

<p>In today's dynamic healthcare landscape, agility is crucial. With advances in technology, the rise of consumer-focused healthcare, and innovations in medical practices, maintaining the status quo is not an option. Similarly, in banking, you need solutions that can enable your progress. At Citi Commercial Bank, we have been supporting healthcare companies for many years. We understand the need for innovation and can help you streamline treasury processes, improve banking connectivity, and grow.</p>

<p>Learn about Nauman Ansari, Global Industry Head for Healthcare at Citi Commercial Bank.</p>

Get to Know Our Leaders: Nauman Ansari

Commercial Banking for Healthcare Companies

Kimberly Young

Kimberly Young, Global Head for Life Sciences, Citi Commercial Bank

Thor Perplies

Thor Perplies, Team Leader Treasury Sales, Healthcare and Nonprofit, Citi Commercial Bank

<p>Life Sciences companies are unique not only in how quickly they scale, but also how early they go public in their life cycle. Listing on a stock exchange is usually a momentous milestone for a business, and for months leading up to it, attention understandably turns almost exclusively to the IPO process, investor roadshows, and ringing the opening bell. What often gets overlooked is the importance of an automated, efficient treasury setup. Getting this right not only delivers a major boost for a healthcare company&rsquo;s operations in general, but in many cases is necessary to meet the increased expectations and scrutiny that comes with being a public entity.</p>
<p>Once the bell rings, expectations from investors, regulators and other key stakeholders become significantly higher, essentially overnight. However, the internal transformation needed to meet these heightened expectations cannot always happen as quickly. Ideally, a life sciences company should begin preparations up to a year before the IPO is anticipated. Key to these preparations is a review of treasury operations and the creation of a system that facilitates the strong governance, transparency, and accountability that&nbsp;stake holders expect.</p>
<h3><strong><span style="font-size: 16px;">Governance: Laying the Foundations</span></strong></h3>
<p>All companies, public or private, have a policy that sets out the rules (or governance) for each team across the organization and how that organization functions. It is acceptable and understood that the governance structure of a private company is more fluid than that of a public one, especially for healthcare or life sciences companies that are often growing rapidly, and in a decentralized way. Once that company takes on public funding, however, it is held to a higher standard in order to protect investors, and the same fluidity is no longer tolerated. New infrastructure and processes may be required to fulfill key tasks.</p>
<p>Understanding the scope of the changes that need to be made before an IPO can be daunting. Many of the requirements associated with becoming a public company are prosaic but absolutely critical in order to ensure best practices. If the firm has a bank that understands the journey, they can jointly conduct a detailed survey of their treasury practices across multiple areas; answering questions early on &ndash; even the seemingly mundane ones &ndash; will have a beneficial impact at later stages. For example:</p>
<ul>
<li><strong>Encryption:</strong> At a basic level, companies must establish security encryption protocols for payments, setting out whether they intend to encrypt connectivity to their bank or both connectivity and payment files. The bank can help the company decide what makes the most sense in its specific circumstances.</li>
<li><strong>Authorized Signers:</strong> Especially when a healthcare company has multiple overseas subsidiaries, it may have a variety of practices related to authorized signers. To ensure proper controls, healthcare companies should keep their signer list updated, and consider a centralized structure that leaves room for local signatories where relevant. The bank will be able to provide detailed guidance on issues such as authorized signatory requirements in various jurisdictions.</li>
<li><strong>Investment Policy:</strong> Raising cash is the primary objective of an IPO, but many firms fail to build a plan for how to manage that cash once it arrives, with some maintaining balances in a demand deposit account. The asset management arm at the bank can work with the company to understand its priorities and develop an investor policy statement and strategy that balances risk and return with any strategic projects such as investment in new facilities and research and development. <a href="https://www.citigroup.com/global/insights/commercial-bank/youve-raised-the-funds-now-what" target="_blank" rel="noopener" data-link-source="tiny">Explore this topic further here</a>.</li>
<li><strong>Cash Deployment:</strong> Proceeds from Healthcare IPOs may be used to fund subsidiaries to expand operations, conduct clinical trials, and repay debt. Separate from the investment policy for any excess balances, a healthcare company should think about how it will deploy cash for these various purposes in the most efficient way. A centralized banking operation streamlines funding at the headquarters rather than individually at each subsidiary, enabling greater visibility and control.</li>
</ul>
<p>Some banks might be able to help their clients automatically implement their governance policies, such as the authorization process for electronic payments. Authorization at the ERP level when releasing file payments is the most common, but banks can support additional authorizations as well. FX transactions, for example, may be more sensitive than regular payments, and so Healthcare companies can have defined processes and employees to input and authorize those particular transactions. Such procedures and processes make it easier to ensure robust governance.</p>
<h3><strong><span style="font-size: 16px;">Transparency: The Key to Building Trust</span></strong></h3>
<p>In addition to necessitating stronger governance, accessing the capital markets requires increased financial reporting capabilities to ensure greater transparency for stakeholders. Treasury has an obligation to consolidate and report ongoing financial data relating to key trial developments. If the company cannot easily synthesize information across the organization and provide granular reporting, it should consider building the infrastructure upfront to avoid wasting time later on.</p>
<p>The international nature of the life sciences and healthcare sector complicates this further; companies often expand rapidly to conduct clinical trials in Asia and Europe in order to commercialize products to these key markets. Similarly, companies may launch operations in a new market to benefit from R&amp;D credits or tax incentives in places such as Australia. If companies work with multiple providers or correspondent banks in different countries, they will need to negotiate a variety of processes, formats and reports, increasing complexity and making it harder to consolidate the necessary information.</p>
<p>Working with a global bank that can easily scale with the company can solve some of these problems. Consolidation provides much greater control over the data that companies receive into their ERP system, making reporting fast and accurate even as they add incremental countries. Relevant data can then be efficiently mapped for each project or drug.</p>
<h3><strong><span style="font-size: 16px;">Accountability: Oversight is Critical</span></strong></h3>
<p>The importance of accountability cannot be overstated: accurate reporting to Wall Street is essential. The treasury policies and procedures put in place as part of the governance structure described earlier can help with accountability and regulatory compliance, but much more is required.</p>
<p>For instance, companies must adhere to the target capital structure that they communicate to stakeholders. Company management will define the ideal debt/equity ratio, but it is the treasury team that takes responsibility for the actual execution of the plan and management of the day-to-day flow of cash, by repaying debt and partnering with capital markets bankers to ensure an appropriate funding structure is in place.</p>
<p>In terms of compliance, being publicly listed transforms the regulatory burdens placed on companies. Following an IPO, a company must be in compliance with a number of regulations, which can have significant treasury and operational implications. For example, some regulations require companies to perform audits on their bank account balances or to report their tax compliance status, FX exposure, and interest rate exposure. A company&rsquo;s bank should have the infrastructure to enable this.</p>
<p>The collation of such information, which is documented in MT940 and other message types as well as cash management statements, is significantly easier if a company works with a single bank. Similarly, a bank can provide simplified reporting of FX and interest rate exposure that can be fed into the company&rsquo;s ERP system, automatically populating accounting statements.</p>
<h3><strong><span style="font-size: 16px;">Conclusion: Preparation is Essential</span></strong></h3>
<p>An IPO is a marquee event in a healthcare company&rsquo;s growth trajectory, and many factors need to go right in order for it to succeed. With an IPO on the horizon, treasury preparation should not be overlooked: it is an enabler of the company&rsquo;s efficiency and controls after the bell rings. Because this kind of financial transformation can take time, refining a company&rsquo;s treasury setup should start well before the bell. Choosing the right banking partner will make it easier to establish an appropriate treasury foundation that can support an organization as it scales, from a private start-up to public company, and from the clinic to commercialization.</p>
<p><span style="font-size: 16px;"><img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/64834692ef207e3f74ae09e1.PNG" alt="VIEW ALL INSIGHTS 2023.PNG"></span></p>

Life Sciences companies are unique not only in how quickly they scale, but also how early they go public in their life cycle. Listing on a stock exchange is usually a momentous milestone for a business, and for months leading up to it, attention understandably turns almost exclusively to the IPO process, investor roadshows, and ringing the opening bell. What often gets overlooked is the importance of an automated, efficient treasury setup. Getting this right not only delivers a major boost for a healthcare company’s operations in general, but in many cases is necessary to meet the increased expectations and scrutiny that comes with being a public entity.

Healthcare IPOs: Treasury's Role Before the Bell

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Kyle DiLella 

<p>However, while China offers clear opportunities, it is important that companies plan their entry into the market carefully to lay the foundations for future success. While it can be tempting to take shortcuts to accelerate market entry, preparation &ndash; and consideration of future objectives &ndash; can save significant time and resources in the future. In particular, companies must ensure they select an appropriate corporate structure for their operations in China: it should be designed with long-term regional goals in mind so that potential future pitfalls are avoided.</p>
<h3>Which corporate structure?</h3>
<p>China recognizes a wide range of business vehicles, many of which are open only to local investors. For foreign companies, there are several structures to choose from, all of which have their own distinct benefits and challenges. Navigating these options requires input from legal counsel and accounting advisors to ensure the correct entity is established for a company&rsquo;s specific needs. Since the enactment of the Foreign Investment Law in 2020, foreign investors can establish a commercial presence in China as a foreign invested enterprise (limited liability company or company limited by shares), a representative office, or some other form of enterprise as permitted by PRC laws. According to Ryan Cuddyre of Citi&rsquo;s Commercial Subsidiaries Group in Shanghai, limited liability companies and representative offices are the most common entities established by life sciences companies when they set up in China.</p>
<ul>
<li>A limited liability company (LLC) is classified as an independent legal person that bears liability on its own behalf. The liability of the shareholder(s) is limited to the amount of the applicable capital contribution. An LLC can be wholly owned by a foreign investor or jointly owned by two or more shareholders (with an upper limit of 50 shareholders). The business scope of the entity must be registered with the relevant authorities and operations must fall within this scope. All LLCs should have a registered capital amount contributed by the respective shareholders in the form of equity. There is no requirement regarding the minimum amount and the timing of capital contributions associated with an LLC under PRC Company Law (with the exception of some specific industries). The shareholder(s) of an LLC can, at their own discretion, decide the amount of registered capital and specific time period over which it is paid. Most industries and shareholders determine the capital amount based on the needs of the company. The shareholders of an LLC distribute profits according to the proportion of paid-in capital contributions and share risks and losses relative to the proportion of registered capital.</li>
<li>A wholly foreign-owned enterprise (WFOE) is a common type of LLC in China. It is 100% owned by a foreign investor (i.e., a Chinese partner is not required under investment regulations). A WFOE requires registered capital, and its liability is limited to its equity. This entity can generate income: the entity must allocate 10% of its annual after-tax profit to a general reserve fund account (until this account balance reaches 50% of the company&rsquo;s registered capital); any after-tax profits above these levels can be repatriated back to a home country. WFOEs are popular structures for life sciences companies. One particular attraction is that the structure has no paid-in minimum capital requirements for firms from the sector.</li>
<li>A representative office is the quickest and least complex corporate structure to establish. However, the structure has some significant drawbacks. A representative office, which does not qualify as a legal person, is established by a foreign enterprise and used for marketing or exploratory purposes but cannot book sales or creates profits. Permitted activities for representative offices are limited to product or service promotion, market research of a parent company&rsquo;s business, quality control, or contact liaison. They are prohibited from entering into contracts with local businesses and have no registered capital requirements.</li>
</ul>
<h3>Working with the right partner</h3>
<p>International expansion is a big step in the development of a company and the scale and pace of growth in China makes it an obvious target for many firms. Companies are understandably excited by the commercial possibilities of China&rsquo;s market. However, it is imperative to take the time to select an appropriate corporate structure when setting up a new entity if a company is to achieve its objectives and avoid complex and costly changes at a later date. Choosing the correct partners for support and assistance when evaluating this decision is critical. A company&rsquo;s legal counsel and accountants can provide significant guidance. In addition, the right banking partner can offer insights about appropriate corporate structures for life sciences companies, especially in relation to the impact on in-country treasury operations in China and the implications for global liquidity strategies.</p>
<p><sup>1 <a href="https://www.trade.gov/country-commercial-guides/china-healthcare" target="_blank" rel="noopener" data-link-source="tiny">https://www.trade.gov/country-commercial-guides/china-healthcare</a></sup></p>
<p><img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/64834692ef207e3f74ae09e1.PNG" alt="VIEW ALL INSIGHTS 2023.PNG"></p>
<p>&nbsp;</p>

<p>For many life sciences companies, expansion into China is an attractive goal. As the second largest healthcare market in the world,<sup>(1)</sup> China has enjoyed significant growth and a maturing of technological infrastructure, approval processes and financial ecosystems.</p>

Entering China: Why Preparation Pays for Life Sciences Firms

<div><img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/64994e93fbdd7d5369572636.png" alt="" width="404" height="115" /></div>
<div>&nbsp;</div>
<p><span style="font-size: 24px; background- float: none; display: inline;">Debt or equity? From a bank or the capital markets? When it comes to finding the right formula that enables your business to grow optimally, no two companies are the same &ndash; there is no onesize- fits-all capital structure. That said, our high growth clients often follow a natural sequence of lending solutions as they evolve; understanding common strategies may be helpful as you embark on your own growth journey.</span></p>
<p>Assessing the implications of each financing option is more important than ever given macroeconomic headwinds that are impacting the cost of debt: inflation and interest rates have reached levels not seen in a decade, and investor scrutiny is intensifying. The funding choices described below are not prescriptive &ndash; companies can leapfrog to a strategy that suits them or forge their own path entirely. By understanding the options, you can plan and make the right choice for your company&rsquo;s unique situation.</p>

<p>The archetype of a start-up is an entrepreneur in their garage, growing their business with funds from family and friends. Even if the first part of this picture isn&rsquo;t always the case, the second part is often close to the truth. Unless you are a tech start-up that takes on venture capital funding, it is common for new businesses to rely on small scale debt &ndash; whether that&rsquo;s from family and friends, government programs, or an overdraft line with their account at a local bank.</p>

Getting started

<p>Many organizations move on to fund their growth through short-term working capital. Sales rise, and hopefully margins with them, freeing up cash to fund growth internally. Quite often, though, companies will have to pay suppliers sooner than they collect from customers. To accelerate growth, a short-term working capital loan can help address this timing mismatch and give you a flexible tool to continue your expansion.</p>

Working your capital

<p>After a while, many organizations decide to invest in capacity &ndash; such as a new factory, warehouse, office, or production facility &ndash; to supercharge growth. These kinds of expenditures can be sizeable and take time, so longer-term financing may be necessary. Bilateral term loans, with maturities that align more to the longer duration of the investment, are commonly used at this point of a company&rsquo;s journey.</p>

Investing in capacity

<p>Once companies reach a certain size, their funding requirements will exceed a level beyond what a single bank can provide. Organizations at this stage may also be interested in diversifying their sources of financing. In such situations, a club or syndicate of banks may come together to offer a more significant funding boost compared to what would be available from bilateral arrangements.</p>

Diversifying your funds

<p>At the upper end of the market, companies may conclude that their needs exceed what a bank &ndash; or even a group of them &ndash; can provide. When this happens, it&rsquo;s time to think about options in the capital markets. Organizations may stick with debt and choose to issue bonds or could adopt the newer approach of seeking private institutional debt investors. However, many companies aspire to &ldquo;ring the bell&rdquo; and go public. An IPO is an important milestone event in a company&rsquo;s growth journey, at which point it will typically have a sophisticated capital structure that enables it to tap into both private and public capital markets through a diversity of financial instruments.</p>

Ringing the bell?

<p>Once a company brings equity into the funding equation, the question of capital structure comes into play. What combination of debt and equity is optimal? How much debt capacity does the company have? We work with clients to help them tackle these questions and can benchmark a company&rsquo;s working capital and debt structures against its peer group, discuss bank group strategies, explore the possibility of mergers and acquisitions, and review the firm&rsquo;s target cost of capital. Although this stage represents mature commercial growth, the journey is far from over.</p>

The capital structure question

<h3><span style="font-size: 24px;">Thinking ahead is key</span></h3>
<p>It&rsquo;s common for Citi to work with entrepreneurs who can think two steps ahead for their business, but who are more uncertain about what their funding will look like at that point. The most successful organizations anticipate future inflection points and position themselves accordingly. For instance, if your business model requires 30-day payment terms for your suppliers, but you&rsquo;re collecting from buyers in 90 days, it&rsquo;s time to start thinking beyond what you can fund with internal working capital. And if syndicated lending might be valuable to fund future growth, it&rsquo;s a good idea to start building relationships with banks early on.</p>
<p>&nbsp;</p>
<h3>In conclusion</h3>
<p>Companies are all different: some will never go through the funding stages described above. You may be leading an organization that took on equity funding from the beginning, or maybe even bootstrapped your way to unicorn status. But more often than not, the companies that we work with will generally follow this sequence, even if they leapfrog certain stages. Regardless, Citi is here to help you think through your funding journey and plan ahead so you can access the funding you need to achieve your strategic goals in today&rsquo;s ultra-competitive market.</p>
<p>&nbsp;</p>
<p><a title="VIEW ALL INSIGHTS" href="https://www.citigroup.com/global/insights/commercial-bank?pk_campaign=view_all_insights" target="_blank" rel="noopener" data-link-source="tiny"><img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/64834692ef207e3f74ae09e1.png" alt="VIEW" /></a></p>

Debt or equity? From a bank or the capital markets? When it comes to finding the right formula that enables your business to grow optimally, no two companies are the same – there is no onesize- fits-all capital structure. That said, our high growth clients often follow a natural sequence of lending solutions as they evolve; understanding common strategies may be helpful as you embark on your own growth journey.

Funding that fits: options for every stage of your company’s growth

PORTUGUESE

As the world pushes past the pandemic, healthcare companies are working to firm up their long term growth strategies. Though management often seek growth through acquisitions, sometimes the opposite is needed to reinvigorate the company and unlock long-term value. Among the largest healthcare players, there has already been a number of high-profile announcements where larger companies are splitting and creating separate healthcare units. Others are spinning off specific units and assets to allow greater focus and flexibility to pursue divergent growth paths. Planning for change Post separation, the independent entity likely have to set up its policies, processes, and systems. For treasuries, planning for the separation starts before day-one as teams from both side review capabilities and coordinate handoff. Sometimes, to ease transition, a Transition Service Agreement is agreed to for the parent to continue to perform certain treasury functions for the new company. The best way forward, however, is in-house so treasury can have control and visibility over its data. This involves setting up company specific plans that tie back to the organization’s strategic vision (do you want global visibility? real-time data? and automation?) Don’t go at it alone Building up a new treasury may involve leaner organizations and potentially fewer resources than what is available at a larger, legacy company. Often, technology must pave the way. One avenue for the new independent company is to leverage platforms that banking partners offer and explore technological solutions that may suit its workflows and strategic plans. An example of such partnership is in the workflow related to FX risk management and dealing. FX is a key area for the new treasury if company has a global footprint. Movements in the exchange rates – some can be upwards of 10-15% YOY change – can have material impact on operational results and financial metrics, thus affecting investors’ assessment of the company. Transition toward operational excellence For the new company, efficiency and operational excellence can be achieved with technology. Companies can decide on the degree of integration and connectivity that fits with their overall goals. Post-trade straight-through-processing (STP), for example, while not new, is a versatile starting point. Many banking partners can offer proprietary STP solutions that aggregate executed FX trades and automate delivery of transaction details to a company’s treasury management system (TMS). The ability to automate post-trade processes can produce many benefits by reducing error rates and speeding up processing and reconciliation. However, STP does not have to apply only to post-trade. Citi’s CitiFX Pulse can help companies create greater efficiency in pre-trade workflow with connectivity and auto execution of hedging trades. In the pre-trade, CitiFX Pulse can be connected to a company’s TMS to receive data related to FX exposures. The transmit frequency can be set to a desired interval: if payables and receivables are booked daily, data can be sent daily to capture new positions. The transmitted data can be converted and reconciled to a Citi format (with embedded ETL technology), creating FX exposures within the Exposure Management module. Critically, the module will allow companies the ability to implement their hedge policy and be in control of defining the auto-execution rule. Incoming exposures are hedged according to the pre-specified rules and executed trades are subsequently fed back to the TMS to calculate net position for next day. Benefits of automating the hedging process In CitiFX Pulse’s automated FX risk management solution, a company can run an efficient risk management process by leveraging technology to run end-to-end processes. Doing so would allow the new treasury to reduce time and resources expended on non strategic activities (reconciling formats, inputting trades, manually calculating net exposures to hedge). Moreover, when exposures and trade data are connected, risk monitoring can be better supported and updated on a timely basis. With volatile currency market conditions expected to continue, accurate FX data will be critical to allow companies better insight and make more informed decisions. For more information about how Citi Commercial Bank can assist you and your team, please contact us below

<p><img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/649aced33a54ba018d0b2a90.png" /></p>
<div>As the world pushes past the pandemic, healthcare companies are working to firm up their long term growth strategies. Though management often seek growth through acquisitions, sometimes the opposite is needed to reinvigorate the company and unlock long-term value. Among the largest healthcare players, there has already been a number of high-profile announcements where larger companies are splitting and creating separate healthcare units. Others are spinning off specific units and assets to allow greater focus and flexibility to pursue divergent growth paths.</div>
<div>&nbsp;</div>
<div>
<h3>Planning for change</h3>
<div>Post separation, the independent entity likely have to set up its policies, processes, and systems. For treasuries, planning for the separation starts before day-one as teams from both side&nbsp; review capabilities and coordinate handoff. Sometimes, to ease transition, a Transition Service Agreement is agreed to for the parent to continue to perform certain treasury functions for the new company. The best way forward, however, is in-house so treasury can have control and visibility over its data. This involves setting up company specific plans that tie back to the organization&rsquo;s strategic vision (do you want global visibility? real-time data? and automation?)</div>
<div>
<h3>&nbsp;</h3>
<h3>Don&rsquo;t go at it alone</h3>
<div>Building up a new treasury may involve leaner organizations and potentially fewer resources than what is available at a larger, legacy company. Often, technology must pave the way. One avenue for the new independent company is to leverage platforms that banking partners offer and explore technological solutions that may suit its workflows and strategic plans. An example of such partnership is in the workflow related to FX risk management and dealing.</div>
<div>&nbsp;</div>
<div>FX is a key area for the new treasury if company has a global footprint. Movements in the exchange rates &ndash; some can be upwards of 10-15% YOY change &ndash; can have material impact on operational results and financial metrics, thus affecting investors&rsquo; assessment of the company.</div>
<div>&nbsp;</div>
<div><img style="display: block; margin-left: auto; margin-right: auto;" src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/649acfdbbd521c59b48d0808.png" /></div>
<div>&nbsp;</div>
<div>
<h3>Transition toward operational excellence</h3>
<div>For the new company, efficiency and operational excellence can be achieved with technology. Companies can decide on the degree of integration and connectivity that fits with their overall goals. Post-trade straight-through-processing (STP), for example, while not new, is a versatile starting point. Many banking partners can offer proprietary STP solutions that aggregate executed FX trades and automate delivery of transaction details to a company&rsquo;s treasury management system (TMS). The ability to automate post-trade processes can produce many benefits by reducing error rates and speeding up processing and reconciliation. However, STP does not have to apply only to post-trade. Citi&rsquo;s CitiFX Pulse can help companies create greater efficiency in pre-trade workflow with connectivity and auto execution of hedging trades.</div>
<div>&nbsp;</div>
<div>In the pre-trade, CitiFX Pulse can be connected to a company&rsquo;s TMS to receive data related to FX exposures. The transmit frequency can be set to a desired interval: if payables and receivables are booked daily, data can be sent daily to capture new positions. The transmitted data can be converted and reconciled to a Citi format (with embedded ETL technology), creating FX exposures within the Exposure Management module. Critically, the module will allow companies the ability to implement their hedge policy and be in control of defining the auto-execution rule. Incoming exposures are hedged according to the pre-specified rules and executed trades are subsequently fed back to the TMS to calculate net position for next day.</div>
<div>
<h3>&nbsp;</h3>
<h3>Benefits of automating the hedging process</h3>
<div>In CitiFX Pulse&rsquo;s automated FX risk management solution, a company can run an efficient risk management process by leveraging technology to run end-to-end processes. Doing so would allow the new treasury to reduce time and resources expended on non strategic activities (reconciling formats, inputting trades, manually calculating net exposures to hedge). Moreover, when exposures and trade data are connected, risk monitoring can be better supported and updated on a timely basis. With volatile currency market conditions expected to continue, accurate FX data will be critical to allow companies better insight and make more informed decisions.</div>
<div>&nbsp;</div>
<div>
<div>For more information about how Citi Commercial Bank can assist you and your team, please contact us below</div>
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Portuguese <p><span style="font-family: sans-serif; font-size: 16px;">Automatizando o hedge cambial em empresas de sa&uacute;de &mdash; melhor n&atilde;o fazer isso sozinho</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">&Agrave; medida que o mundo supera a pandemia, empresas de sa&uacute;de trabalham para firmar estrat&eacute;gias de crescimento de longo prazo. Embora muitas vezes os administradores busquem crescimento por meio de aquisi&ccedil;&otilde;es, &agrave;s vezes o oposto &eacute; necess&aacute;rio para revigorar a empresa e gerar valor de longo prazo. Entre os maiores players, j&aacute; houve v&aacute;rios an&uacute;ncios de alto n&iacute;vel em que empresas maiores est&atilde;o se dividindo e criando unidades de sa&uacute;de separadas. Outras est&atilde;o separando unidades e ativos espec&iacute;ficos para permitir maior foco e flexibilidade para buscar caminhos de crescimento divergentes.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Planejando a mudan&ccedil;a</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Ap&oacute;s a separa&ccedil;&atilde;o, a entidade independente provavelmente ter&aacute; que definir suas pol&iacute;ticas, processos e sistemas. Para tesourarias, o planejamento da separa&ccedil;&atilde;o come&ccedil;a antes do primeiro dia, &agrave; medida que as equipes de ambos os lados revisam os recursos e coordenam a transfer&ecirc;ncia. &Agrave;s vezes, para facilitar a transi&ccedil;&atilde;o, um Acordo de Servi&ccedil;o de Transi&ccedil;&atilde;o &eacute; feito para que a controladora continue desempenhando determinadas fun&ccedil;&otilde;es de tesouraria para a nova empresa. O melhor caminho a seguir, no entanto, &eacute; interno, para que a tesouraria possa ter controle e visibilidade sobre seus dados. Isso envolve a cria&ccedil;&atilde;o de planos espec&iacute;ficos da empresa que se relacionam com a vis&atilde;o estrat&eacute;gica da organiza&ccedil;&atilde;o (voc&ecirc; quer visibilidade global? dados em tempo real? e automa&ccedil;&atilde;o?)</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">N&atilde;o fa&ccedil;a isso sozinho</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Construir uma nova tesouraria pode envolver organiza&ccedil;&otilde;es mais enxutas e potencialmente menos recursos do que os dispon&iacute;veis em uma empresa legada maior. Muitas vezes, a tecnologia deve abrir o caminho. Um caminho para a nova empresa independente &eacute; alavancar as plataformas que os parceiros banc&aacute;rios oferecem e explorar solu&ccedil;&otilde;es tecnol&oacute;gicas que possam se adequar aos seus fluxos de trabalho e planos estrat&eacute;gicos. Um exemplo desse tipo de parceria est&aacute; no fluxo de trabalho relacionado &agrave; gest&atilde;o e negocia&ccedil;&atilde;o de riscos cambiais.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">FX &eacute; uma &aacute;rea chave para a nova tesouraria se a empresa tiver presen&ccedil;a global. Oscila&ccedil;&otilde;es no c&acirc;mbio &ndash; &agrave;s vezes superior a 10-15% de varia&ccedil;&atilde;o anual &ndash; podem ter um impacto material nos resultados operacionais e nas m&eacute;tricas financeiras, afetando assim a avalia&ccedil;&atilde;o dos investidores sobre a empresa.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Transi&ccedil;&atilde;o para a excel&ecirc;ncia operacional</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Para a nova empresa, efici&ecirc;ncia e excel&ecirc;ncia operacional podem ser alcan&ccedil;adas com tecnologia. As empresas podem decidir sobre o grau de integra&ccedil;&atilde;o e conectividade que se adequa aos seus objetivos gerais. O processamento direto p&oacute;s-negocia&ccedil;&atilde;o (STP), por exemplo, embora n&atilde;o seja novo, &eacute; um ponto de partida vers&aacute;til. Muitos parceiros banc&aacute;rios podem oferecer solu&ccedil;&otilde;es STP propriet&aacute;rias que agregam transa&ccedil;&otilde;es FX executadas e automatizam a entrega de detalhes de transa&ccedil;&otilde;es para o sistema de gerenciamento de tesouraria (TMS) de uma empresa. A capacidade de automatizar os processos de p&oacute;s negocia&ccedil;&atilde;o pode produzir muitos benef&iacute;cios, reduzindo as taxas de erro e acelerando o processamento e a reconcilia&ccedil;&atilde;o. No entanto, o STP n&atilde;o precisa se aplicar apenas ao p&oacute;s-negocia&ccedil;&atilde;o. O CitiFX Pulse do Citi pode ajudar as empresas a criar maior efici&ecirc;ncia no fluxo de trabalho pr&eacute;-negocia&ccedil;&atilde;o com conectividade e execu&ccedil;&atilde;o autom&aacute;tica de negocia&ccedil;&otilde;es de hedge.</span></p>
<div>
<p><span style="font-family: sans-serif; font-size: 16px;">Na pr&eacute;-negocia&ccedil;&atilde;o, o CitiFX Pulse pode ser conectado ao TMS de uma empresa para receber dados relacionados &agrave;s exposi&ccedil;&otilde;es cambiais. A frequ&ecirc;ncia de transmiss&atilde;o pode ser ajustada para um intervalo desejado: se as contas a pagar e a receber forem registradas diariamente, os dados podem ser enviados diariamente para capturar novas posi&ccedil;&otilde;es. Os dados transmitidos podem ser convertidos e reconciliados para um formato Citi (com tecnologia ETL incorporada), criando exposi&ccedil;&otilde;es FX dentro do m&oacute;dulo Exposure Management. De forma cr&iacute;tica, o m&oacute;dulo permitir&aacute; &agrave;s empresas a capacidade de implementar sua pol&iacute;tica de hedge e controlar a defini&ccedil;&atilde;o da regra de execu&ccedil;&atilde;o autom&aacute;tica. As exposi&ccedil;&otilde;es recebidas s&atilde;o cobertas de acordo com as regras pr&eacute;-especificadas e as negocia&ccedil;&otilde;es executadas s&atilde;o subsequentemente realimentadas ao TMS para calcular a posi&ccedil;&atilde;o l&iacute;quida para o dia seguinte.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Benef&iacute;cios de automatizar o processo de hedge</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Na solu&ccedil;&atilde;o automatizada de gerenciamento de risco cambial do CitiFX Pulse, uma empresa pode executar um processo de gerenciamento de risco eficiente, alavancando a tecnologia para executar processos de ponta a ponta. Isso permitiria &agrave; nova tesouraria reduzir o tempo e os recursos gastos em atividades n&atilde;o estrat&eacute;gicas (conciliar formatos, inserir negocia&ccedil;&otilde;es, calcular manualmente as exposi&ccedil;&otilde;es l&iacute;quidas para hedge). Al&eacute;m disso, quando as exposi&ccedil;&otilde;es e os dados comerciais est&atilde;o conectados, o monitoramento de risco pode ser mais bem suportado e atualizado em tempo h&aacute;bil. Com a expectativa de que as condi&ccedil;&otilde;es vol&aacute;teis do mercado de c&acirc;mbio continuem, dados precisos de c&acirc;mbio ser&atilde;o essenciais para permitir que as empresas tenham uma vis&atilde;o melhor e tomem decis&otilde;es mais informadas.</span></p>
</div> 

<p><span style="font-family: sans-serif; font-size: 16px;">Automatizando o hedge cambial em empresas de sa&uacute;de &mdash; melhor n&atilde;o fazer isso sozinho</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">&Agrave; medida que o mundo supera a pandemia, empresas de sa&uacute;de trabalham para firmar estrat&eacute;gias de crescimento de longo prazo. Embora muitas vezes os administradores busquem crescimento por meio de aquisi&ccedil;&otilde;es, &agrave;s vezes o oposto &eacute; necess&aacute;rio para revigorar a empresa e gerar valor de longo prazo. Entre os maiores players, j&aacute; houve v&aacute;rios an&uacute;ncios de alto n&iacute;vel em que empresas maiores est&atilde;o se dividindo e criando unidades de sa&uacute;de separadas. Outras est&atilde;o separando unidades e ativos espec&iacute;ficos para permitir maior foco e flexibilidade para buscar caminhos de crescimento divergentes.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Planejando a mudan&ccedil;a</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Ap&oacute;s a separa&ccedil;&atilde;o, a entidade independente provavelmente ter&aacute; que definir suas pol&iacute;ticas, processos e sistemas. Para tesourarias, o planejamento da separa&ccedil;&atilde;o come&ccedil;a antes do primeiro dia, &agrave; medida que as equipes de ambos os lados revisam os recursos e coordenam a transfer&ecirc;ncia. &Agrave;s vezes, para facilitar a transi&ccedil;&atilde;o, um Acordo de Servi&ccedil;o de Transi&ccedil;&atilde;o &eacute; feito para que a controladora continue desempenhando determinadas fun&ccedil;&otilde;es de tesouraria para a nova empresa. O melhor caminho a seguir, no entanto, &eacute; interno, para que a tesouraria possa ter controle e visibilidade sobre seus dados. Isso envolve a cria&ccedil;&atilde;o de planos espec&iacute;ficos da empresa que se relacionam com a vis&atilde;o estrat&eacute;gica da organiza&ccedil;&atilde;o (voc&ecirc; quer visibilidade global? dados em tempo real? e automa&ccedil;&atilde;o?)</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">N&atilde;o fa&ccedil;a isso sozinho</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Construir uma nova tesouraria pode envolver organiza&ccedil;&otilde;es mais enxutas e potencialmente menos recursos do que os dispon&iacute;veis em uma empresa legada maior. Muitas vezes, a tecnologia deve abrir o caminho. Um caminho para a nova empresa independente &eacute; alavancar as plataformas que os parceiros banc&aacute;rios oferecem e explorar solu&ccedil;&otilde;es tecnol&oacute;gicas que possam se adequar aos seus fluxos de trabalho e planos estrat&eacute;gicos. Um exemplo desse tipo de parceria est&aacute; no fluxo de trabalho relacionado &agrave; gest&atilde;o e negocia&ccedil;&atilde;o de riscos cambiais.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">FX &eacute; uma &aacute;rea chave para a nova tesouraria se a empresa tiver presen&ccedil;a global. Oscila&ccedil;&otilde;es no c&acirc;mbio &ndash; &agrave;s vezes superior a 10-15% de varia&ccedil;&atilde;o anual &ndash; podem ter um impacto material nos resultados operacionais e nas m&eacute;tricas financeiras, afetando assim a avalia&ccedil;&atilde;o dos investidores sobre a empresa.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Transi&ccedil;&atilde;o para a excel&ecirc;ncia operacional</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Para a nova empresa, efici&ecirc;ncia e excel&ecirc;ncia operacional podem ser alcan&ccedil;adas com tecnologia. As empresas podem decidir sobre o grau de integra&ccedil;&atilde;o e conectividade que se adequa aos seus objetivos gerais. O processamento direto p&oacute;s-negocia&ccedil;&atilde;o (STP), por exemplo, embora n&atilde;o seja novo, &eacute; um ponto de partida vers&aacute;til. Muitos parceiros banc&aacute;rios podem oferecer solu&ccedil;&otilde;es STP propriet&aacute;rias que agregam transa&ccedil;&otilde;es FX executadas e automatizam a entrega de detalhes de transa&ccedil;&otilde;es para o sistema de gerenciamento de tesouraria (TMS) de uma empresa. A capacidade de automatizar os processos de p&oacute;s negocia&ccedil;&atilde;o pode produzir muitos benef&iacute;cios, reduzindo as taxas de erro e acelerando o processamento e a reconcilia&ccedil;&atilde;o. No entanto, o STP n&atilde;o precisa se aplicar apenas ao p&oacute;s-negocia&ccedil;&atilde;o. O CitiFX Pulse do Citi pode ajudar as empresas a criar maior efici&ecirc;ncia no fluxo de trabalho pr&eacute;-negocia&ccedil;&atilde;o com conectividade e execu&ccedil;&atilde;o autom&aacute;tica de negocia&ccedil;&otilde;es de hedge.</span></p>
<div>
<p><span style="font-family: sans-serif; font-size: 16px;">Na pr&eacute;-negocia&ccedil;&atilde;o, o CitiFX Pulse pode ser conectado ao TMS de uma empresa para receber dados relacionados &agrave;s exposi&ccedil;&otilde;es cambiais. A frequ&ecirc;ncia de transmiss&atilde;o pode ser ajustada para um intervalo desejado: se as contas a pagar e a receber forem registradas diariamente, os dados podem ser enviados diariamente para capturar novas posi&ccedil;&otilde;es. Os dados transmitidos podem ser convertidos e reconciliados para um formato Citi (com tecnologia ETL incorporada), criando exposi&ccedil;&otilde;es FX dentro do m&oacute;dulo Exposure Management. De forma cr&iacute;tica, o m&oacute;dulo permitir&aacute; &agrave;s empresas a capacidade de implementar sua pol&iacute;tica de hedge e controlar a defini&ccedil;&atilde;o da regra de execu&ccedil;&atilde;o autom&aacute;tica. As exposi&ccedil;&otilde;es recebidas s&atilde;o cobertas de acordo com as regras pr&eacute;-especificadas e as negocia&ccedil;&otilde;es executadas s&atilde;o subsequentemente realimentadas ao TMS para calcular a posi&ccedil;&atilde;o l&iacute;quida para o dia seguinte.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Benef&iacute;cios de automatizar o processo de hedge</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Na solu&ccedil;&atilde;o automatizada de gerenciamento de risco cambial do CitiFX Pulse, uma empresa pode executar um processo de gerenciamento de risco eficiente, alavancando a tecnologia para executar processos de ponta a ponta. Isso permitiria &agrave; nova tesouraria reduzir o tempo e os recursos gastos em atividades n&atilde;o estrat&eacute;gicas (conciliar formatos, inserir negocia&ccedil;&otilde;es, calcular manualmente as exposi&ccedil;&otilde;es l&iacute;quidas para hedge). Al&eacute;m disso, quando as exposi&ccedil;&otilde;es e os dados comerciais est&atilde;o conectados, o monitoramento de risco pode ser mais bem suportado e atualizado em tempo h&aacute;bil. Com a expectativa de que as condi&ccedil;&otilde;es vol&aacute;teis do mercado de c&acirc;mbio continuem, dados precisos de c&acirc;mbio ser&atilde;o essenciais para permitir que as empresas tenham uma vis&atilde;o melhor e tomem decis&otilde;es mais informadas.</span></p>
</div>

Portuguese

As the world pushes past the pandemic, healthcare companies are working to firm up their long term growth strategies. Though management often seek growth through acquisitions, sometimes the opposite is needed to reinvigorate the company and unlock long-term value. Among the largest healthcare players, there has already been a number of high-profile announcements where larger companies are splitting and creating separate healthcare units. Others are spinning off specific units and assets to allow greater focus and flexibility to pursue divergent growth paths. Planning for change Post separation, the independent entity likely have to set up its policies, processes, and systems. For treasuries, planning for the separation starts before day-one as teams from both side review capabilities and coordinate handoff. Sometimes, to ease transition, a Transition Service Agreement is agreed to for the parent to continue to perform certain treasury functions for the new company. The best way forward, however, is in-house so treasury can have control and visibility over its data. This involves setting up company specific plans that tie back to the organization’s strategic vision (do you want global visibility? real-time data? and automation?) Don’t go at it alone Building up a new treasury may involve leaner organizations and potentially fewer resources than what is available at a larger, legacy company. Often, technology must pave the way. One avenue for the new independent company is to leverage platforms that banking partners offer and explore technological solutions that may suit its workflows and strategic plans. An example of such partnership is in the workflow related to FX risk management and dealing. FX is a key area for the new treasury if company has a global footprint. Movements in the exchange rates – some can be upwards of 10-15% YOY change – can have material impact on operational results and financial metrics, thus affecting investors’ assessment of the company. Transition toward operational excellence For the new company, efficiency and operational excellence can be achieved with technology. Companies can decide on the degree of integration and connectivity that fits with their overall goals. Post-trade straight-through-processing (STP), for example, while not new, is a versatile starting point. Many banking partners can offer proprietary STP solutions that aggregate executed FX trades and automate delivery of transaction details to a company’s treasury management system (TMS). The ability to automate post-trade processes can produce many benefits by reducing error rates and speeding up processing and reconciliation. However, STP does not have to apply only to post-trade. Citi’s CitiFX Pulse can help companies create greater efficiency in pre-trade workflow with connectivity and auto execution of hedging trades. In the pre-trade, CitiFX Pulse can be connected to a company’s TMS to receive data related to FX exposures. The transmit frequency can be set to a desired interval: if payables and receivables are booked daily, data can be sent daily to capture new positions. The transmitted data can be converted and reconciled to a Citi format (with embedded ETL technology), creating FX exposures within the Exposure Management module. Critically, the module will allow companies the ability to implement their hedge policy and be in control of defining the auto-execution rule. Incoming exposures are hedged according to the pre-specified rules and executed trades are subsequently fed back to the TMS to calculate net position for next day. Benefits of automating the hedging process In CitiFX Pulse’s automated FX risk management solution, a company can run an efficient risk management process by leveraging technology to run end-to-end processes. Doing so would allow the new treasury to reduce time and resources expended on non strategic activities (reconciling formats, inputting trades, manually calculating net exposures to hedge). Moreover, when exposures and trade data are connected, risk monitoring can be better supported and updated on a timely basis. With volatile currency market conditions expected to continue, accurate FX data will be critical to allow companies better insight and make more informed decisions. For more information about how Citi Commercial Bank can assist you and your team, please contact us below Portuguese <p><span style="font-family: sans-serif; font-size: 16px;">Automatizando o hedge cambial em empresas de sa&uacute;de &mdash; melhor n&atilde;o fazer isso sozinho</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">&Agrave; medida que o mundo supera a pandemia, empresas de sa&uacute;de trabalham para firmar estrat&eacute;gias de crescimento de longo prazo. Embora muitas vezes os administradores busquem crescimento por meio de aquisi&ccedil;&otilde;es, &agrave;s vezes o oposto &eacute; necess&aacute;rio para revigorar a empresa e gerar valor de longo prazo. Entre os maiores players, j&aacute; houve v&aacute;rios an&uacute;ncios de alto n&iacute;vel em que empresas maiores est&atilde;o se dividindo e criando unidades de sa&uacute;de separadas. Outras est&atilde;o separando unidades e ativos espec&iacute;ficos para permitir maior foco e flexibilidade para buscar caminhos de crescimento divergentes.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Planejando a mudan&ccedil;a</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Ap&oacute;s a separa&ccedil;&atilde;o, a entidade independente provavelmente ter&aacute; que definir suas pol&iacute;ticas, processos e sistemas. Para tesourarias, o planejamento da separa&ccedil;&atilde;o come&ccedil;a antes do primeiro dia, &agrave; medida que as equipes de ambos os lados revisam os recursos e coordenam a transfer&ecirc;ncia. &Agrave;s vezes, para facilitar a transi&ccedil;&atilde;o, um Acordo de Servi&ccedil;o de Transi&ccedil;&atilde;o &eacute; feito para que a controladora continue desempenhando determinadas fun&ccedil;&otilde;es de tesouraria para a nova empresa. O melhor caminho a seguir, no entanto, &eacute; interno, para que a tesouraria possa ter controle e visibilidade sobre seus dados. Isso envolve a cria&ccedil;&atilde;o de planos espec&iacute;ficos da empresa que se relacionam com a vis&atilde;o estrat&eacute;gica da organiza&ccedil;&atilde;o (voc&ecirc; quer visibilidade global? dados em tempo real? e automa&ccedil;&atilde;o?)</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">N&atilde;o fa&ccedil;a isso sozinho</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Construir uma nova tesouraria pode envolver organiza&ccedil;&otilde;es mais enxutas e potencialmente menos recursos do que os dispon&iacute;veis em uma empresa legada maior. Muitas vezes, a tecnologia deve abrir o caminho. Um caminho para a nova empresa independente &eacute; alavancar as plataformas que os parceiros banc&aacute;rios oferecem e explorar solu&ccedil;&otilde;es tecnol&oacute;gicas que possam se adequar aos seus fluxos de trabalho e planos estrat&eacute;gicos. Um exemplo desse tipo de parceria est&aacute; no fluxo de trabalho relacionado &agrave; gest&atilde;o e negocia&ccedil;&atilde;o de riscos cambiais.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">FX &eacute; uma &aacute;rea chave para a nova tesouraria se a empresa tiver presen&ccedil;a global. Oscila&ccedil;&otilde;es no c&acirc;mbio &ndash; &agrave;s vezes superior a 10-15% de varia&ccedil;&atilde;o anual &ndash; podem ter um impacto material nos resultados operacionais e nas m&eacute;tricas financeiras, afetando assim a avalia&ccedil;&atilde;o dos investidores sobre a empresa.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Transi&ccedil;&atilde;o para a excel&ecirc;ncia operacional</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Para a nova empresa, efici&ecirc;ncia e excel&ecirc;ncia operacional podem ser alcan&ccedil;adas com tecnologia. As empresas podem decidir sobre o grau de integra&ccedil;&atilde;o e conectividade que se adequa aos seus objetivos gerais. O processamento direto p&oacute;s-negocia&ccedil;&atilde;o (STP), por exemplo, embora n&atilde;o seja novo, &eacute; um ponto de partida vers&aacute;til. Muitos parceiros banc&aacute;rios podem oferecer solu&ccedil;&otilde;es STP propriet&aacute;rias que agregam transa&ccedil;&otilde;es FX executadas e automatizam a entrega de detalhes de transa&ccedil;&otilde;es para o sistema de gerenciamento de tesouraria (TMS) de uma empresa. A capacidade de automatizar os processos de p&oacute;s negocia&ccedil;&atilde;o pode produzir muitos benef&iacute;cios, reduzindo as taxas de erro e acelerando o processamento e a reconcilia&ccedil;&atilde;o. No entanto, o STP n&atilde;o precisa se aplicar apenas ao p&oacute;s-negocia&ccedil;&atilde;o. O CitiFX Pulse do Citi pode ajudar as empresas a criar maior efici&ecirc;ncia no fluxo de trabalho pr&eacute;-negocia&ccedil;&atilde;o com conectividade e execu&ccedil;&atilde;o autom&aacute;tica de negocia&ccedil;&otilde;es de hedge.</span></p>
<div>
<p><span style="font-family: sans-serif; font-size: 16px;">Na pr&eacute;-negocia&ccedil;&atilde;o, o CitiFX Pulse pode ser conectado ao TMS de uma empresa para receber dados relacionados &agrave;s exposi&ccedil;&otilde;es cambiais. A frequ&ecirc;ncia de transmiss&atilde;o pode ser ajustada para um intervalo desejado: se as contas a pagar e a receber forem registradas diariamente, os dados podem ser enviados diariamente para capturar novas posi&ccedil;&otilde;es. Os dados transmitidos podem ser convertidos e reconciliados para um formato Citi (com tecnologia ETL incorporada), criando exposi&ccedil;&otilde;es FX dentro do m&oacute;dulo Exposure Management. De forma cr&iacute;tica, o m&oacute;dulo permitir&aacute; &agrave;s empresas a capacidade de implementar sua pol&iacute;tica de hedge e controlar a defini&ccedil;&atilde;o da regra de execu&ccedil;&atilde;o autom&aacute;tica. As exposi&ccedil;&otilde;es recebidas s&atilde;o cobertas de acordo com as regras pr&eacute;-especificadas e as negocia&ccedil;&otilde;es executadas s&atilde;o subsequentemente realimentadas ao TMS para calcular a posi&ccedil;&atilde;o l&iacute;quida para o dia seguinte.</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Benef&iacute;cios de automatizar o processo de hedge</span></p>
<p><span style="font-family: sans-serif; font-size: 16px;">Na solu&ccedil;&atilde;o automatizada de gerenciamento de risco cambial do CitiFX Pulse, uma empresa pode executar um processo de gerenciamento de risco eficiente, alavancando a tecnologia para executar processos de ponta a ponta. Isso permitiria &agrave; nova tesouraria reduzir o tempo e os recursos gastos em atividades n&atilde;o estrat&eacute;gicas (conciliar formatos, inserir negocia&ccedil;&otilde;es, calcular manualmente as exposi&ccedil;&otilde;es l&iacute;quidas para hedge). Al&eacute;m disso, quando as exposi&ccedil;&otilde;es e os dados comerciais est&atilde;o conectados, o monitoramento de risco pode ser mais bem suportado e atualizado em tempo h&aacute;bil. Com a expectativa de que as condi&ccedil;&otilde;es vol&aacute;teis do mercado de c&acirc;mbio continuem, dados precisos de c&acirc;mbio ser&atilde;o essenciais para permitir que as empresas tenham uma vis&atilde;o melhor e tomem decis&otilde;es mais informadas.</span></p>
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As the world pushes past the pandemic, healthcare companies are working to firm up their long term growth strategies. Though management often seek growth through acquisitions, sometimes the opposite is needed to reinvigorate the company and unlock long-term value. Among the largest healthcare players, there has already been a number of high-profile announcements where larger companies are splitting and creating separate healthcare units. Others are spinning off specific units and assets to allow greater focus and flexibility to pursue divergent growth paths.

Automating FX hedging for healthcare companies — don’t go at it alone

China is the world’s second largest healthcare market1 and is therefore a priority for many US healthcare and life sciences companies, whether for sales, research and development, or manufacturing. But managing cash generated in China can be challenging as regulations, especially relating to local currency, are stricter and more complex than the US or European countries, for example. Selecting the right strategy for the repatriation of cash may not seem a priority for US companies when they are setting up operations in China; after all, generating revenue in healthcare and life sciences can take several years after gaining regulatory approval to operate. Nevertheless, cash repatriation is critical and should be carefully thought through before a local entity is established and certainly well in advance of generating cash. It’s important for companies to be aware of the various options for repatriating cash – and tailor their strategies accordingly – to ensure cash repatriation is as efficient and effective as possible. As importantly, no company wants to risk being fined for breaching regulations or suffer the reputational damage – and possible restrictions on their activity in China – that might follow from such a breach. What options are available? Chinese regulators impose a variety of rules and requirements on the movement of funds from China, prohibiting the use of some methods of repatriation that may be commonplace in other jurisdictions and placing strict caps in other circumstances. Nevertheless, with careful planning, US companies can take advantage of three principal repatriation structures that can meet a variety of needs for companies at different stages of development. Dividend remittance is the most common strategy for most US healthcare and life sciences companies operating in China. Dividends are a one-way transfer of funds and are simple to execute: there are no restrictions on the use of dividends and no need to return funds to China at a later date. As execution is straightforward, and no regulatory approvals are required when remitting dividends, the strategy is valuable even for companies with limited treasury resources. Dividends can be adopted as both a near and long-term repatriation solution. Healthcare companies will need to pay withholding tax to the local tax bureau, so it is important to consider the impact of this on P&L when repatriating funds. Cross-border lending from China involves more complex structures than dividend remittance and may be more applicable to companies with greater treasury resources or more sophisticated treasury arrangements. While companies must register with China’s State Administration of Foreign Exchange (SAFE) or with banks in certain pilot areas in order to lend cross-border, specific regulatory approval is not required. Execution is both straightforward and can be completed on a timely basis. Cross-border lending is subject to a number of requirements, however. Repatriated funds can only be used for working capital and lending cannot exceed more than 50% of the China entity’s equity, limiting the ability of a US company to extract surplus renminbi from China. The tenor of lending is subject to the underlying lending contract tenor. Cross-border pooling is a more complex arrangement for repatriating funds and is typically applicable for healthcare or life sciences companies with regional or global treasury hubs that utilize sophisticated structures to optimize liquidity management. Cross-border pooling requires registration or filing with local regulators and offers flexible borrowing/lending quotas. Self-generated funds can be swept offshore and then freely converted to other currencies. Certain foreign currency pooling structures do not include a regulatory repayment period and the tenor can be stipulated in the underlying loan agreement that is filed with regulators. Pooling structures can also evolve as required: new entities can be added to the pool as companies’ China business grows. While cross-border pooling offers many benefits, it is complicated to set up and execute and there are a variety options available, including programs administered by SAFE and China’s central bank (the People’s Bank of China) and a program for companies that operate in the Shanghai Free-Trade Zone. In addition, repayment of RMB is required within 12 months under certain structures. Consequently, currencies may need to be converted twice when funds are lent and repaid, potentially increasing costs. Choosing the right banking partner For US healthcare and life sciences companies, the attractions of the world’s second largest healthcare market are clear. However, companies need to be aware of the challenges associated with repatriating cash from China and plan accordingly. While companies’ needs may evolve as their operations in the country grow, it is essential to identify appropriate strategies well in advance of generating revenue in China. Regulations in China are subject to rapid and frequent change and therefore companies also need to be aware of government and regulatory announcements. Healthcare and life sciences companies planning to establish operations in China – or with existing operations in the country – should work closely with their bank to identify appropriate strategies to ensure that they can repatriate cash in the most efficient way and in compliance with local rules and regulations. For more information about how Citi Commercial Bank can support you and your team, please contact us below. 1 https://www.trade.gov/country-commercial-guides/china-healthcare

<div><img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/649d956abd521c59b48d0b87.png" /></div>
<div>&nbsp;</div>
<div>China is the world&rsquo;s second largest healthcare market<sup>1</sup> and is therefore a priority for many US healthcare and life sciences companies, whether for sales, research and development, or manufacturing. But managing cash generated in China can be challenging as regulations, especially relating to local currency, are stricter and more complex than the US or European countries, for example.</div>
<div>&nbsp;</div>
<div>Selecting the right strategy for the repatriation of cash may not seem a priority for US companies when they are setting up operations in China; after all, generating revenue in healthcare and life sciences can take several years after gaining regulatory approval to operate. Nevertheless, cash repatriation is critical and should be carefully thought through before a local entity is established and certainly well in advance of generating cash.</div>
<div>&nbsp;</div>
<div>It&rsquo;s important for companies to be aware of the various options for repatriating cash &ndash; and tailor their strategies accordingly &ndash; to ensure cash repatriation is as efficient and effective as possible. As importantly, no company wants to risk being fined for breaching regulations or suffer the reputational damage &ndash; and possible restrictions on their activity in China &ndash; that might follow from such a breach.</div>
<p>&nbsp;</p>
<p><strong>What options are available?</strong></p>
<div>Chinese regulators impose a variety of rules and requirements on the movement of funds from China, prohibiting the use of some methods of repatriation that may be commonplace in other jurisdictions and placing strict caps in other circumstances. Nevertheless, with careful planning, US companies can take advantage of three principal repatriation structures that can meet a variety of needs for companies at different stages of development.</div>
<div>&nbsp;</div>
<ol>
<li><strong>Dividend remittance</strong> is the most common strategy for most US healthcare and life sciences companies operating in China. Dividends are a one-way transfer of funds and are simple to execute: there are no restrictions on the use of dividends and no need to return funds to China at a later date. As execution is straightforward, and no regulatory approvals are required when remitting dividends, the strategy is valuable even for companies with limited treasury resources. Dividends can be adopted as both a near and long-term repatriation solution. Healthcare companies will need to pay withholding tax to the local tax bureau, so it is important to consider the impact of this on P&amp;L when repatriating funds.</li>
<li><strong>Cross-border lending</strong> from China involves more complex structures than dividend remittance and may be more applicable to companies with greater treasury resources or more sophisticated treasury arrangements. While companies must register with China&rsquo;s State Administration of Foreign Exchange (SAFE) or with banks in certain pilot areas in order to lend cross-border, specific regulatory approval is not required. Execution is both straightforward and can be completed on a timely basis. Cross-border lending is subject to a number of requirements, however. Repatriated funds can only be used for working capital and lending cannot exceed more than 50% of the China entity&rsquo;s equity, limiting the ability of a US company to extract surplus renminbi from China. The tenor of lending is subject to the underlying lending contract tenor.</li>
<li><strong>Cross-border pooling</strong> is a more complex arrangement for repatriating funds and is typically applicable for healthcare or life sciences companies with regional or global treasury hubs that utilize sophisticated structures to optimize liquidity management. Cross-border pooling requires registration or filing with local regulators and offers flexible borrowing/lending quotas. Self-generated funds can be swept offshore and then freely converted to other currencies. Certain foreign currency pooling structures do not include a regulatory repayment period and the tenor can be stipulated in the underlying loan agreement that is filed with regulators. Pooling structures can also evolve as required: new entities can be added to the pool as companies&rsquo; China business grows. While cross-border pooling offers many benefits, it is complicated to set up and execute and there are a variety options available, including programs administered by SAFE and China&rsquo;s central bank (the People&rsquo;s Bank of China) and a program for companies that operate in the Shanghai Free-Trade Zone. In addition, repayment of RMB is required within 12 months under certain structures. Consequently, currencies may need to be converted twice when funds are lent and repaid, potentially increasing costs.</li>
</ol>
<div><strong>Choosing the right banking partner</strong></div>
<div>For US healthcare and life sciences companies, the attractions of the world&rsquo;s second largest healthcare market are clear. However, companies need to be aware of the challenges associated with repatriating cash from China and plan accordingly. While companies&rsquo; needs may evolve as their operations in the country grow, it is essential to identify appropriate strategies well in advance of generating revenue in China. Regulations in China are subject to rapid and frequent change and therefore companies also need to be aware of government and regulatory announcements.</div>
<div>&nbsp;</div>
<div>Healthcare and life sciences companies planning to establish operations in China &ndash; or with existing operations in the country &ndash; should work closely with their bank to identify appropriate strategies to ensure that they can repatriate cash in the most efficient way and in compliance with local rules and regulations.</div>
<div>&nbsp;</div>
<div>For more information about how Citi Commercial Bank can support you and your team, please contact us below.</div>
<div>&nbsp;</div>
<p><sup>1 <a href="https://www.trade.gov/country-commercial-guides/china-healthcare" target="_blank" rel="noopener" data-link-source="tiny">https://www.trade.gov/country-commercial-guides/china-healthcare</a></sup></p>
<div>&nbsp;</div>
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To fully capture the opportunities available in China’s healthcare market, companies need to manage their cash repatriation effectively given strict and complex rules.

Healthcare and life sciences companies operating in China: finding the right cash repatriation strategy

The Challenge US-based Precision Medicine Group provides an integrated infrastructure that supports biopharmaceutical and life science companies as they develop and commercialize new products. Rapid organic growth and M&A activity meant it had different banks in 15+ markets across North America, EMEA and Asia Pacific. Managing multiple bank relationships and accounts was time consuming. Each of the company’s banks required different tokens to log in, and a variety of inconsistent formats and processes for KYC and other compliance requirements. With this fragmented banking structure, Precision Medicine’s cash visibility was limited, making it difficult to assess cash positions. Determining balances required local teams to pull data manually by logging into one of the multiple banking platforms and summarizing the data in an Excel file. Precision Medicine decided to consolidate international banking with a single global partner as part of an initiative to increase centralization. The company wanted consistent solutions and service levels, greater visibility and control of cash, and to free up local teams to focus on core activities rather than bank account management. The Solution Precision Medicine selected Citi Commercial Bank as its global banking partner based on Citi’s presence in nearly 100 countries and jurisdictions worldwide, which aligned with the company’s existing operations and strategic ambitions. Given its long healthcare industry experience and specific expertise in working with contract research organizations, Citi was well placed to help Precision Medicine navigate its centralization journey. Citi and Precision Medicine’s objective was to create a best-in-class global treasury function. To achieve this, Citi developed a scalable treasury roadmap to take the company to its desired future state in phases: Consolidate banking relationships worldwide to Citi Commercial Bank, rationalizing accounts where possible. Increase automation and improve liquidity management. A key part of Precision Medicine’s centralization strategy is the introduction of a new ERP system, which will have full host-to-host connectivity with Citi. The Result Citi opened all new accounts for Precision Medicine within their project timeline, including new entities that were added after the original project scope was set. Account openings used digital onboarding to ensure a consistent process across all jurisdictions, which significantly reduced the resources required to manage the process. Citi provided support and a single global contact to address Precision Medicine’s queries. Precision Medicine uses CitiDirect to manage its accounts, giving it visibility and control of cash globally via a single dashboard. The company enjoys the benefits of Citi Payment Insights, which provides payment status updates via a visual tracker. Precision Medicine also uses the SEPA Debtor Mandates module within CitiDirect, enabling it to self-manageits Euro Zone SEPA debtor mandates and prevent unapproved transactions. All this has freed up individuals at Precision Medicine entities worldwide to focus on their core roles, as well as improve risk management. With phase one now complete, Precision Medicine and Citi have embarked on phase two. The company has introduced its new ERP system, which is being integrated via host-to-host connectivity with Citi to improve control and reduce manual effort. As part of the ERP integration, Precision Medicine and Citi have developed an XML file to accommodate payment instructions for multiple countries, currencies, and payment types, which will be sent directly from the company’s ERP to Citi. Precision Medicine is also using CitiConnect File Manager to allow it to review batch payment files before processing. The company also intends to take advantage of its consolidated bank relationship with Citi and new functionality to move cash between entities more efficiently. For more information about how Citi Commercial Bank’s Healthcare Group can assist you and your team, please contact us below.

<h3><img src="/rcs/v1/media/citigpa/akpublic/storage/retrieveMediaFile/64d123de835d715b4dae2c64.png" alt="Author: Matt Marzicola &ndash; Senior Vice President, Healthcare &ndash; Citi Commercial Bank" /></h3>
<h3>The Challenge</h3>
<p>US-based Precision Medicine Group provides an integrated infrastructure that supports biopharmaceutical and life science companies as they develop and commercialize new products. Rapid organic growth and M&amp;A activity meant it had different banks in 15+ markets across North America, EMEA and Asia Pacific. Managing multiple bank relationships and accounts was time consuming. Each of the company&rsquo;s banks required different tokens to log in, and a variety of inconsistent formats and processes for KYC and other compliance requirements.</p>
<p>With this fragmented banking structure, Precision Medicine&rsquo;s cash visibility was limited, making it difficult to assess cash positions. Determining balances required local teams to pull data manually by logging into one of the multiple banking platforms and summarizing the data in an Excel file.</p>
<p>Precision Medicine decided to consolidate international banking with a single global partner as part of an initiative to increase centralization. The company wanted consistent solutions and service levels, greater visibility and control of cash, and to free up local teams to focus on core activities rather than bank account management.</p>
<h3>The Solution</h3>
<div>
<p>Precision Medicine selected Citi Commercial Bank as its global banking partner based on Citi&rsquo;s presence in nearly 100 countries and jurisdictions worldwide, which aligned with the company&rsquo;s existing operations and strategic ambitions. Given its long healthcare industry experience and specific expertise in working with contract research organizations, Citi was well placed to help Precision Medicine navigate its centralization journey.</p>
<p>Citi and Precision Medicine&rsquo;s objective was to create a best-in-class global treasury function. To achieve this, Citi developed a scalable treasury roadmap to take the company to its desired future state in phases:</p>
<ol>
<li>Consolidate banking relationships worldwide to Citi Commercial Bank, rationalizing accounts where possible.</li>
<li>Increase automation and improve liquidity management. A key part of Precision Medicine&rsquo;s centralization strategy is the introduction of a new ERP system, which will have full host-to-host connectivity with Citi.</li>
</ol>
<h3>The Result</h3>
<div>
<p>Citi opened all new accounts for Precision Medicine within their project timeline, including new entities that were added after the original project scope was set.</p>
<p>Account openings used digital onboarding to ensure a consistent process across all jurisdictions, which significantly reduced the resources required to manage the process. Citi provided support and a single global contact to address Precision Medicine&rsquo;s queries.</p>
<p>Precision Medicine uses CitiDirect to manage its accounts, giving it visibility and control of cash globally via a single dashboard. The company enjoys the benefits of Citi Payment Insights, which provides payment status updates via a visual tracker. Precision Medicine also uses the SEPA Debtor Mandates module within CitiDirect, enabling it to self-manageits Euro Zone SEPA debtor mandates and prevent unapproved transactions. All this has freed up individuals at Precision Medicine entities worldwide to focus on their core roles, as well as improve risk management.</p>
<p>With phase one now complete, Precision Medicine and Citi have embarked on phase two. The company has introduced its new ERP system, which is being integrated via host-to-host connectivity with Citi to improve control and reduce manual effort. As part of the ERP integration, Precision Medicine and Citi have developed an XML file to accommodate payment instructions for multiple countries, currencies, and payment types, which will be sent directly from the company&rsquo;s ERP to Citi. Precision Medicine is also using CitiConnect File Manager to allow it to review batch payment files before processing. The company also intends to take advantage of its consolidated bank relationship with Citi and new functionality to move cash between entities more efficiently.</p>
<p>For more information about how Citi Commercial Bank&rsquo;s Healthcare Group can assist you and your team, please contact us below.&nbsp;</p>
<p>&nbsp;</p>
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</div>
</div>

Formed in 2012, Precision Medicine Group is a life sciences services company supporting next-generation approaches to drug development and commercialization.

Precision Medicine decided to consolidate international banking with a single global partner as part of an initiative to increase centralization.

Global banking relationship delivers visibility, control and efficiency

*This partner content was produced by the Financial Times on behalf of Citi Commercial Bank Regardless of sector, when the smooth running of organizations is discussed, a quote attributed to US General Omar Bradley is often employed: “Amateurs talk strategy, professionals talk logistics.” A company could sell the best, most innovative product or solution, underpinned by a brilliant marketing strategy, but if the logistics for delivering the goods aren’t optimal then that company will underperform. Martin Christopher, Emeritus Fellow of the Chartered Institute of Logistics and Transport, and author of the bestselling book Logistics and Supply Chain Management, concurs: “The real competition in business sectors is between supply chains, not companies.” This critical battleground is particularly tricky for the pharmaceutical industry. Stringent regulatory compliance and complex approval processes can lead to product launch delays and supply chain disruption. End-to-end supply chain visibility, while desirable for mitigating risks and optimizing operations, is often difficult to ensure. As detailed in this 2022 study by EY, the global nature of pharmaceutical distribution, usually involving various external partners, makes for a complex mix of worldwide shipping solutions across ocean, air and cross-border trucking. Integrating shipping data across these solutions can be hugely challenging and costly. Add in supplier supervision, geopolitical and trade considerations – plus the pharma-specific requirement that is cold-chain management (ensuring goods are kept at the correct temperature) – and it is clear that the sector requires world-beating supply-chain organization. A specific set of challenges Fast-growing Taiwan-based biopharmaceutical company PharmaEssentia is one firm that can attest to the logistical challenges of operating a globally expanding pharmaceutical business. The Covid-19 pandemic, for example, saw PharmaEssentia potentially heading for supply problems as the worldwide demand for items such as syringe barrels skyrocketed. “Like many pharmaceutical and biotech companies, we rely on different CMOs (contract manufacturing organisations) and suppliers,” says Samuel Lin, PharmaEssentia’s VP, Head of Business Operations and Strategy. “During Covid, we were asked to share commoditised components like these with vaccine manufacturers. So we had to ensure we had sufficient stock to guarantee a stability of service to our customers and, ultimately, to patients.” For business continuity, PharmaEssentia turned to its global banking partner, Citi Commercial Bank, for an injection of working capital, helping the firm to carry on providing innovative medicines to patients in dire need. Laura Fogarty, Citi Commercial Bank’s Healthcare Industry Head in North America, agrees that this was essential in order to avoid shipping disruption. “There was a lot going on at the time,” she says. “Around November 2021, at the height of the pandemic, PharmaEssentia had received approval across much of the world for its lead drug candidate BESREMi, a biologic used to treat a rare blood disease. It was also launching in the US, and all of that required significant investment. Our working capital solution provided the company with the financial flexibility it needed to maintain its core business while ensuring the US launch of BESREMi was a success.” Local market knowledge is essential Ko-Chung Lin, PharmaEssentia’s founder and CEO, points out that Citi’s global footprint – together with a deep knowledge of local markets – helped it weather the storms of Covid-19 and ensure a robust supply chain, as well as funding further commercialisation in global markets. “Citi gave us solutions and dynamics for different markets,” he says. “They didn’t just help with capital but also in an advisory capacity. We are essentially a group of scientists – that’s our focus – and Citi brought the financial expertise we needed.” To support the market expansion of PharmaEssentia’s lead product, BESREMi, Citi helped the firm raise capital through the issuance of global depository receipts in Luxembourg. Tapping the overseas markets allowed PharmaEssentia to elevate its brand recognition, as well as obtain access to new investors. In April 2023, this was the largest overseas offering at the time by a Taiwanese healthcare issuer. Citi also introduced a “host-to-host” solution to automate payment flows and create better operational efficiencies. “Host-to-host allows full automation of files – sending and processing without the need for manual intervention,” explains Fogarty. Ko-Chung Lin describes that future forecast trajectory as “hockey stick growth”, with more investment and the hiring of many more talented scientists ultimately resulting in a greater number of successful patient treatments. “This is such an exciting and rewarding client to work with,” says Fogarty. “There’s a genuinely positive patient impact that you’re a part of – that’s why we come to work every day.” All opinions expressed by the participants in this article are their own and do not necessarily represent the opinions of Citi Commercial Bank

<p><span style="  font-size: 11.6667px; white-space: normal; background- float: none; display: inline;">*This partner content was produced by the Financial Times on behalf of Citi Commercial Bank</span></p>
<p>Regardless of sector, when the smooth running of organizations is discussed, a quote attributed to US General Omar Bradley is often employed: &ldquo;Amateurs talk strategy, professionals talk logistics.&rdquo; A company could sell the best, most innovative product or solution, underpinned by a brilliant marketing strategy, but if the logistics for delivering the goods aren&rsquo;t optimal then that company will underperform.</p>
<p>Martin Christopher, Emeritus Fellow of the Chartered Institute of Logistics and Transport, and author of the bestselling book&nbsp;<em>Logistics and Supply Chain Management</em>, concurs: &ldquo;The real competition in business sectors is between supply chains, not companies.&rdquo; This critical battleground is particularly tricky for the pharmaceutical industry. Stringent regulatory compliance and complex approval processes can lead to product launch delays and supply chain disruption. End-to-end supply chain visibility, while desirable for mitigating risks and optimizing operations, is often difficult to ensure.<br /><br />As detailed in&nbsp;this 2022 study by EY, the global nature of pharmaceutical distribution, usually involving various external partners, makes for a complex mix of worldwide shipping solutions across ocean, air and cross-border trucking. Integrating shipping data across these solutions can be hugely challenging and costly. Add in supplier supervision, geopolitical and trade considerations &ndash; plus the pharma-specific requirement that is cold-chain management (ensuring goods are kept at the correct temperature) &ndash; and it is clear that the sector requires world-beating supply-chain organization.</p>
<h4><strong>A specific set of challenges</strong></h4>
<p>Fast-growing Taiwan-based biopharmaceutical company PharmaEssentia is one firm that can attest to the logistical challenges of operating a globally expanding pharmaceutical business. The Covid-19 pandemic, for example, saw PharmaEssentia potentially heading for supply problems as the worldwide demand for items such as syringe barrels skyrocketed. &ldquo;Like many pharmaceutical and biotech companies, we rely on different CMOs (contract manufacturing organisations) and suppliers,&rdquo; says Samuel Lin, PharmaEssentia&rsquo;s VP, Head of Business Operations and Strategy. &ldquo;During Covid, we were asked to share commoditised components like these with vaccine manufacturers. So we had to ensure we had sufficient stock to guarantee a stability of service to our customers and, ultimately, to patients.&rdquo;</p>
<p>For business continuity, PharmaEssentia turned to its global banking partner, Citi Commercial Bank, for an injection of working capital, helping the firm to carry on providing innovative medicines to patients in dire need. Laura Fogarty, Citi Commercial Bank&rsquo;s Healthcare Industry Head in North America, agrees that this was essential in order to avoid shipping disruption. &ldquo;There was a lot going on at the time,&rdquo; she says. &ldquo;Around November 2021, at the height of the pandemic, PharmaEssentia had received approval across much of the world for its lead drug candidate BESREMi, a biologic used to treat a rare blood disease. It was also launching in the US, and all of that required significant investment. Our working capital solution provided the company with the financial flexibility it needed to maintain its core business while ensuring the US launch of BESREMi was a success.&rdquo;</p>
<h4><strong>Local market knowledge is essential</strong></h4>
<p>Ko-Chung Lin, PharmaEssentia&rsquo;s founder and CEO, points out that Citi&rsquo;s global footprint &ndash; together with a deep knowledge of local markets &ndash; helped it weather the storms of Covid-19 and ensure a robust supply chain, as well as funding further commercialisation in global markets. &ldquo;Citi gave us solutions and dynamics for different markets,&rdquo; he says. &ldquo;They didn&rsquo;t just help with capital but also in an advisory capacity. We are essentially a group of scientists &ndash; that&rsquo;s our focus &ndash; and Citi brought the financial expertise we needed.&rdquo;</p>
<p>To support the market expansion of PharmaEssentia&rsquo;s lead product, BESREMi, Citi helped the firm raise capital through the issuance of global depository receipts in Luxembourg. Tapping the overseas markets allowed PharmaEssentia to elevate its brand recognition, as well as obtain access to new investors. In April 2023, this was the largest overseas offering at the time by a Taiwanese healthcare issuer. Citi also introduced a &ldquo;host-to-host&rdquo; solution to automate payment flows and create better operational efficiencies. &ldquo;Host-to-host allows full automation of files &ndash; sending and processing without the need for manual intervention,&rdquo; explains Fogarty.</p>
<p>Ko-Chung Lin describes that future forecast trajectory as &ldquo;hockey stick growth&rdquo;, with more investment and the hiring of many more talented scientists ultimately resulting in a greater number of successful patient treatments. &ldquo;This is such an exciting and rewarding client to work with,&rdquo; says Fogarty. &ldquo;There&rsquo;s a genuinely positive patient impact that you&rsquo;re a part of &ndash; that&rsquo;s why we come to work every day.&rdquo;</p>
<p>&nbsp;</p>
<p><strong style="box-sizing: border-box;  font-size: 15px; white-space: normal; background-"><em style="box-sizing: border-box;">All opinions expressed by the participants in this article are their own and do not necessarily represent the opinions of Citi Commercial Bank</em></strong></p>
<p>&nbsp;</p>
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How one company bridged the gaps during its international expansion.

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<p>The 2024 Citi Commercial Bank Sector Snapshot Report on Emerging Healthcare &amp; Life Sciences, with data taken from PitchBook, takes a closer look at emerging frontiers in healthcare with a focus on biotech digitalization, AI, telemedicine, fitness and wearable tech, and&nbsp;assesses market conditions, industry shifts, and key trends&nbsp;in investment.</p>
<p>This raises a number of interesting questions:&nbsp;</p>
<ul>
<li>Can venture financing in healthcare and life sciences remain resilient despite economic volatility?</li>
<li>Will investment remain focused&nbsp;on healthtech, biotech, and advances in hardware and<br>software?</li>
<li>And will the future see an increase in the estimated $9.8 trillion global healthcare spend in 2021?</li>
</ul>
<p>These are some of the areas covered in the report which delivers valuable insights and will unlock opportunities.</p>
<p>Read the full report <a href="https://www.citibank.com/icg/sa/flippingbook/2024/Sector-Snapshot-Key-Trends-in-Dealmaking-Emerging-Healthcare/2/" target="_blank" rel="noopener" data-link-source="tiny">here.</a></p>
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<div><strong>Nauman Ansari</strong><br>Global Healthcare Sector Head<br>Citi Commercial Bank</div>
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Key Trends in Dealmaking

<p>The 2024 Citi Commercial&nbsp;Bank Sector Snapshot Report on Emerging Healthcare &amp;&nbsp;Life Sciences, with data taken from PitchBook, takes a closer&nbsp;look at emerging frontiers in healthcare with a focus on biotech&nbsp;digitalization, AI, telemedicine, fitness and wearable tech, and<br>assesses market conditions, industry shifts, and key trends&nbsp;in investment.</p>
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Sector Snapshot: Emerging Healthcare & Life Sciences

<p>While the IPO process largely focuses on explaining a company&rsquo;s unique value and competitive edge to investors, typically with the CEO and CFO centerstage during roadshows, many of the foundational efforts begin much earlier. Treasury is at the heart of numerous protocols relating to governance, transparency and accountability that are necessary to meet regulatory and compliance requirements, and to build trust among prospective investors.</p>
<p>This raises interesting themes:</p>
<ul type="disc">
<li>Treasury Has the Answers: Lessons from the U.S. Regional Bank Crisis</li>
<li>Treasury acting as a Revenue Generator</li>
<li>Companies enlisting bank support</li>
</ul>
<p>Ultimately, by putting the right team, technology, and solutions in place early on in the growth cycle, you can not only help ensure a vital foundation for revenue growth and business expansion, but also deliver maximum value for shareholders.</p>
<p>Read the report <a href="https://www.citigroup.com/rcs/citigpa/storage/public/why_treasury_is_critical_before_IPO.pdf" data-link-source="tiny">here</a>.</p>
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<p>While the IPO process largely focuses on explaining a company&rsquo;s unique value and competitive edge to investors, typically with the CEO and CFO centerstage during roadshows, many of the foundational efforts begin much earlier. Treasury is at the heart of numerous protocols relating to governance, transparency and accountability that are necessary to meet regulatory and compliance requirements, and to build trust among prospective investors.</p>