continued apace last week. There weren't any spectacularly huge deals,
only the normal-sized deals on which biopharmas depend to steadily build
their businesses.
Government contributed its share to the theme. The Municipal Government
of Beijing, operating under the 11th Five Year Plan (2006-2010), will
invest 505 million RMB ($74 million) into the biotech sector during
2009-10, funding eight major projects (see story). The goal is to foster
an annual output from Beijing's biotech sector of 54 billion RMB ($7.4
billion) by the end of 2010. That would equal 16 billion RMB ($2.3
billion) of added value, representing a growth rate of 15% in 2009 and
13% in 2010. Three of the main areas of interest are from the
pharmaceutical sector, three from agriculture and the remaining two are
unnamed.
Lotus Pharmaceuticals (LTUS.OB) bought the rights to Yipubishan, an
octreotide acetate injection solution, which treats the symptoms of
gastric ulcers and hemorrhages of the upper digestive tract (see story).
Lotus paid 54 million RMB ($7.9 million) for the drug. That was less
than its 2008 revenues, which were 67 million RMB ($9.8 million) with a
75% gross profit margin. Lotus projects 75 million RMB of revenue from
Yipubishan in 2009 and a 25% annual growth rate through 2011. Lotus is
already familiar with the drug because one of the company's subsidiaries
is distributing the drug in the provinces of Anhui and Inner Mongolia.
OriGene Technologies Inc., a US company based in Rockville, MD,
purchased the assets of Shenzhen P&A Biotech, a privately owned
enterprise that provides monoclonal antibodies for the research industry
(see story). OriGene will use the assets to establish a high throughput
monoclonal antibody production outsourcing center in China. The company
raised $6.5 million in private equity to finance the purchase. OriGene
will use its new China monoclonal antibody production capacity to
produce several thousand high quality monoclonal antibodies per year.
OriGene's long-term goal is to provide high quality monoclonal
antibodies for every single human gene.
China Pharma Holdings (CPHI.OB) began a clinical trial of a generic
version of the hypertension drug Candesartan, a trial that will take 18
months to complete (see story). Originally developed by Takeda Pharma of
Japan together with AstraZeneca (NYSE: AZN), Cardesartan is a first-line
treatment for hypertension. It produced $2.5 billion in revenues
worldwide during 2007. China Pharma is actively adding to its portfolio
of generic drugs. Recently, China Pharma has either begun testing or
received approval for the following drugs: a third generation
Cephalosporin antibiotic combined with a bacterial-enzyme inhibitor; a
generic version of the diuretic, Bumetanide; a hepatitis B treatment,
Tiopronin Enteric-Coated Capsules; and Pusen OK, a generic version of
cold medication Aleve-D.
Sinobiomed (SOBM.OB) replaced its entire management team with people who
have both venture capital and industry experience (see story).
Sinobiomed is up against the ropes financially – it has no cash and
little in the way of revenues. It talks about its ten recombinant
products – three on the market, four in clinical trials and three in
research and development – but with only $347,000 in cash, just $827,000
in revenues (for nine months), and a net loss of $4.1 million (also for
nine months), the company must do something quickly. It is looking at a
working capital deficiency of $14.3 million. Presumably, the new
management team, with their venture capital experience, knows how to
find investors, and a new infusion of capital can be expected soon.
Pharmacyclics, Inc. (NSDQ: PCYC), a Sunnyvale, CA biopharma with four
drugs in clinical development, may be developing a business model that
involves China (see story). Recently, Pharmacyclics hired Glen Rice,
PhD, as its President and COO. Rice established Bridge Labs a few years
ago, a US-headquartered CRO whose original laboratory was established in
Beijing in 2004. Now, principals of Pacific Biopharma Group, Ltd. (PBG)
have made a $1.4 million investment in Pharmacyclics. PBG is located in
San Bruno California and Taizhou, Jiangsu Province, People's Republic of
China, where it is building a single-use biomanufacturing facility in
the China Medical City complex. Perhaps more of the company's operations
will eventually migrate to China.
And finally, two companies with their operations in China reported their
financial results last week. Genesis Pharmaceuticals Enterprises
(GNPH.OB) said its revenues jumped 24% during its Q2 (ended December 31,
2008), but net income moved up only 4% (see story). The company booked
$32.9 in revenue for the quarter and recorded a profit of $5.4 million
or 11 cents per share. Investors are not impressed with the company,
because at current levels, Genesis has a market capitalization of less
than its cash level.
China-Biotics (NSDQ: CHBT) announced that during its Q3 revenues climbed
33% to $15.8 million while net income rose 40% to $5.7 million (see
story). The company, which makes probiotic products, attributed its
improved performance to a combination of new products and a change in
the sales mix as China-Biotics selectively raised its prices. It also
increased its Shining retail outlets to 107 from 27 a year ago.
China-Biotics expects a shift toward commercial accounts together with
its soon-to-be-finished new production facility will help the company
prosper in the future.
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