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The Week in Review: Looking Forward, Looking Back

publication date: Jan 3, 2009
 | 
author/source: Richard Daverman, PhD

As the year officially transitions from 2008 to 2009, it seems natural to anticipate the future and reflect backwards. Looking forward, sometime later this month, China is expected to release its official medical reform plan, which will set healthcare policy for the immediate future (see story). Under the new directive, China will provide universal medical service by 2020 to its 1.3 billion people, including the currently underserved rural population. The plan states as a central provision that it is the government’s responsibility to play the dominate role in providing public health and basic medical service. That principal reverses a trend toward privatizing healthcare in China and putting increasing responsibility on the individual. Both the central and local governments will boost their levels of financial support. The final version of the plan is expected to be very similar to the draft, which was made available on October 14 on the website of the National Development and Reform Commission (NDRC). Many of China’s existing biopharmas are expecting increased sales of their products to help treat the rural population, whose healthcare has lagged behind service to the urban sector.  

And then, looking backward, we offer yet one more set of statistics to measure the extent of the economic crisis. In calendar year 2008, the ChinaBio® Stock Index fell 57%, dropping from 1674 at the end of 2007 to 719 one year later, a decline of 915 points (see story). The index is made up of 15 China-based biopharmas that trade in the US. 2008 was not a pleasant journey for stocks in general or China stocks in particular. At the beginning of 2008, China stocks were the darlings of the world. At year’s end, the same companies were considered risky, and the declining markets had turned risk into something to be avoided. By one measure, China biopharma stocks don’t look so bad: they actually outperformed the Shanghai Exchange, which lost 65% of its value over the year.

The shortened news week included news of one significant China biopharma deal. Shinva Medical Instrument (SHA: 600587) and GE Healthcare (NYSE: GE) announced they will form a medical device JV, called Xinhua GE Medical Systems, with a total investment of $25 million (see story). The new company will focus on diagnostic X-ray equipment and be involved in R&D, manufacturing and sales. It will also develop additional equipment and software. Under the agreement, Shinva will hold a 51% stake of the new company, and GE will hold the remaining 49%. The new venture will be the fourth JV that GE Healthcare has established in China since it became involved in the country in 1979.

China Medical Technologies (NSDQ: CMED) (中国医疗技术公司) announced that it completed the sale of its High Intensity Focused Ultrasound tumor therapy system business to its Chairman and CEO (see story). Usually, this type of report is a fairly unremarkable event that requires little commentary. On this occasion, however, China Medical included a lengthy defense of the sale, explaining all the reasons why the sale makes good business sense. Because China Medical is trying so hard to defend its action, we can infer they have received a fair amount of criticism over the disposal of this asset to a company insider at what seems like a low price.

Niusule Biotech Corp. (OTCBB: NIUS) listed its shares on the OTC Bulletin Board (see story). The company is headquartered in Nevada, though its operations will be carried out in China through a subsidiary, Zhejiang Baitai Bioengineering Corp. The company will produce biopharmaceuticals and health food. At present, Niusule has no revenues, though it hopes to become operational in early 2010. Later this year, the company plans to begin building a manufacturing facility, which will be completed early in 2010.

Sinovac Biotech (NYSE Alternext US: SVA) (北京科兴生物制品有限公司) reported that Healive®, the company’s hepatitis A vaccine, has been cleared of any responsibility in the death of a two-year-old infant (see story). The infant died two days after receiving the vaccine. According to discoveries made during an autopsy, the cause of death was myocarditis, an inflammation of the muscular part of the heart, which is usually caused by infection. Healive was not a factor in this problem. Following the child’s death, Healive had been removed from the shelves of Beijing-area pharmacies as a precautionary measure.

And finally, China Sky One Medical (NSDQ: CSKI) (中国天字一号医药公司) was awarded a Science and Technology Prize by Shandong Province for its Naftopidil Dispersible Tablet (see story). Naftopidil Dispersible Tablets treat enlarged prostate in men in a product that can easily be absorbed and digested. The product was developed by China Sky One’s wholly-owned subsidiary, Peng Lai Jin Chuang Pharmaceutical Company. China Sky One specializes in OTC products, which are not usually given prizes for science and technology. The dispersible tablet technology was key to the prize, as Naftopidil is an often used treatment for the condition.

 

Disclosure: none.

 


 

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