Benda Pharmaceutical (BPMA.OB) announced the appointment of a third independent board member. With three outside board members, Benda’s board is now “independent” under Nasdaq rules and qualifies Benda to apply for listing on the Nasdaq exchange. Benda, through its China subsidiary, SiBiono, offers the gene therapy for cancer, Gendicine®.

Benda bought parts of SiBiono in two separate purchases in 2007. On April 5, 2007, Benda acquired 57.57% of the common shares of SiBiono for 60 million RMB ($8 million). This implies a value of 104 million RMB ($13.9 million) for all of SiBiono. On June 11, 2007, Benda bought an additional 2.56% of SiBiono for 2.56 million RMB ($341,000), implying a value for the whole company of 100 million RMB ($13.3 million).

In the first half of 2007, Benda recorded revenues of $8.2 million, on which it made a gross profit of $3.9 million. However, Benda recorded a huge $7.9 million charge for “professional and consulting fees” that was paid to the owners of SiBiono. This charge is equal in value to the 2.19 million shares of stock issued to the owners of SiBiono at a price of $3.60 each, which the owners have been guaranteed. When lumped together with other, more normal (and nominal) charges, Benda ended up with a loss of $8 million.

Benda has 96.6 million shares outstanding and 128.5 million shares fully diluted. At its current price of $2.10 per share, the market values Benda at $203 million, before any options/warrants are exercised – while its 60% share in SiBiono have an implied value of slightly over $8 million. Benda has other assets besides its stake in Sibiono, companies that sell traditional Chinese medicines for example, but the SiBiono division is the one most often talked about in American press releases.

In other biotech news from China last week, Lilly (LLY) reported its first-half revenues in China were up 26% from the year earlier. Lilly has committed itself to becoming a large presence in pharmaceutical sales in the country, while it has been increasing its R&D presence as well (see story).

Genentech (DNA) partnered with a new Taiwanese company named TaiMed that is backed by $20 million provided by the government of Taiwan. The two will seek to develop a therapy for HIV/AIDS. Genentech acquired the compound under development when it bought Tanox, which was Genentech’s partner on the asthma drug, Xolair (see story).

Sinobiomed (SOBM.OB) reported success in a Phase IIa trial of rBAT, its recombinant batroxobin product, for use in stopping bleeding either in surgery or emergency situations. A Phase IIb test has already begun (see story).

Shanghai Century (SAH), a special acquisition corporation, announced earnings for the Chinese company it is expecting to acquire: Kelun Pharmaceutical, a maker of IV products and pharmaceuticals. Kelun reported revenues of 691 million RMB ($90.8 million) in the first half of 2007, an increase of 63% from the year earlier. Profits were 65 million RMB ($8.5 million) (see story).

3SBio (SSRX) had a good day on the market Thursday, after an analyst predicted the company’s profits would quadruple and the stock would hit a target of $17. The estimate was almost a self-fulfilling prophecy, as 3SBio closed on Friday at $14.45, up $2.33 for the week (see story).

And, finally, Sanofi-Aventis (SNY) announced it would test China’s IP rules by taking its long-running patent fight against Jiangsu Hengrui to a higher court. The dispute covers the manufacturing patent for Docetaxel, and courts in China have ruled both for and against Sanofi-Aventis on the matter (see story).



Disclosure: Centient management holds a position in Genentech shares and does consulting work for Genentech.

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