Last week, China biopharma saw news across a broad front. Earnings season is definitely underway, with three companies reporting, and there were developments in other areas – deals, drugs – as well.

A significant venture capital funding was formally announced in China biopharma last week. HD Biosciences Inc., a Shanghai-based contract research organization (CRO), officially completed its Series A financing, after initially disclosing the fact at the ChinaBio® Investor Forum held in early July (see story). The round was led by Morningside Venture with Lilly Asian Ventures (NYSE: LLY) and Pfizer Venture Investments (NYSE: PFE) joining. The funding was especially significant because it may be the first time that multiple big pharmas have taken an equity position in a China-based CRO. HD Biosciences is a specialized CRO focused on conducting assay development and high throughput screening services for big pharma and biotech. The funding will be used to expand HD Bioscience’s high throughput screening program and build new capabilities in in vivo biology and DMPK bio-analytical services. Founded in 2002, HDB provides services to clients including 5 of the 10 world's largest multinational pharmaceutical companies.

A second funding event took place last week in the form of a reverse merger. A vaccine maker with the complicated name Dalian Jingang-Andi Bio-Products Co. Ltd. completed its reverse merger with China Bio-Immunity Corporation (OTCBB: CHHB) (see story). Dailian Jingang-Andi markets its products under the brand name “JGAD,” and derives 96% of its revenue from a rabies vaccine. The $9.50 share price of China Bio-Immunity gives the newly reconstituted company a market capitalization of $158 million. Revenues for the vaccine maker skyrocketed last year after the SFDA tightened its quality control standards on rabies vaccines, effectively forcing many competing products off the market. JGAD also markets a mumps vaccine, and it is developing five next-generation vaccine-based prophylactics and therapeutics. Three of these are in Phase III trials, and two are completing their pre-clinical work

Pfizer (NYSE: PFE) was in the news a second time when it announced it will house its Biotherapeutics and Bioinnovation Center (BBC) in the biotech-oriented Mission Bay area of San Francisco (see story). The BBC is Pfizer’s attempt to forge an entrepreneurial, biotech-like research culture inside a big pharma. The BBC has a global charter and is supported by Pfizer’s China-based R&D operation. The BBC will seek to establish partnerships with academic, biomedical, biotech and venture capital communities outside the company. It will focus on identifying novel drug candidates as well as securing new technologies and research tools that can be used across all of Pfizer’s therapeutic areas. Dr. Steven Yang, head of Pfizer’s Asia R&D operations, including China's Shanghai factility, interrupted his family vacation in the US to visit the Mission Bay site last week.

The Swiss chemical and biotech company Lonza Group announced a major new China initiative last week. The company formed an engineering unit that will provide engineering, facility design and maintenance services for China biopharmaceutical companies (see story). Lonza will staff the new enterprise with 130 current Lonza employees from Switzerland and China. Lonza is already a big player in China. The company has been operating in the country for 12 years, after having invested $345 million in its China facilities. Its major operating base is in Nansha Guangzhou, where its R&D operation is located. The same site also houses both a large-scale API plant and a small-scale API operation. Lonza has additional facilities in Guangzhou, Liyang and Najing.

Eisai China, Inc. (ECI), the wholly owned China subsidiary of Japan pharma Eisai Co., reached an agreement with STADA Arzneimittel AG to sell the latter company’s Alpha-Lipon 300 STADA®, an alpha-lipoic acid that is used to treat neuropathic pain (see story). Available in China since 2005, the medication produces an antioxidant effect, reducing overproduction of oxygen and normalizing glucose metabolism. In China, Eisai is already active in the diabetes drug sector, marketing Methycobal(R), which treats peripheral nerve disorder, and filing for approval of Glufast(R), a rapid-acting insulin secretagogue (a substance that causes another substance to be secreted).

Earnings season continued during the last week, and several more companies will report in the coming week. The main theme so far is that companies are reporting decent-to-large increases in revenues and earnings, though the increases didn’t always meet expectations. China Pharma Holdings (OTCBB: CPHI) said its Q2 revenues climbed 32% to $11.3 million. Net income was up 21% at $4 million (see story). Those are solid numbers, but they are less impressive than the 60% revenue growth and 78% profit increase of Q1. However, the company’s Accounts Receivable, which has been alarmingly high for a number of quarters, climbed another $2.5 million to $27.3 million. During Q2, China Pharma raised $10 million in a secondary offering, which was significant as the company ended Q1 with almost no cash.

Simcere Pharmaceutical Group (NYSE: SCR) reported a solid improvement in Q2 results. Revenues climbed 30% to $63.6 million while net income was up a less-impressive 14.5%, at $13.9 million (see story). However, the results were below analysts’ estimates. Simcere blamed the shortfall on revenue problems with Endu, its patented cancer drug. Growth was lower than expected because the company restructured its Endu sales force, and Simcere is giving away Endu to accelerate participation in a Phase IV clinical trial of the drug. Because Q2 was a disappointment, Simcere trimmed its full-year projected revenues by 300 million RMB to a range of 1.7 billion-1.8 billion. The company still expects its net income to hit somewhere between 390 million RMB and 400 million RMB, which is roughly equivalent to $58 million.

China Medical Technologies (NSDQ: CMED) reported higher financial results from its first quarter of 2008, which ended on March 31, 2008 (see story). Unlike the previous two companies, there was nothing in the China Medical report that disappointed. Revenues were up 50% at 227 million RMB ($33.1 million) and non-GAAP net income climbed an even larger 61% to 111 million RMB ($16.1 million). Earnings per fully diluted ADS were up 49% at 57 cents. Most of the growth came from China Medical's two newest products: the ECLIA and FISH diagnostic systems, while China Medical’s traditional products, High Intensity Focused Ultrasound machines, were up a modest 12%. 

Disclosure: none.