Despite the continuing economic crisis, investment in China biopharma 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 (OTCBB: LTUS) (路坦制药有限公司) 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 (OTCBB: CPHI) 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 (OTCBB: SOBM) 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 (OTCBB: GNPH) (江波制药) 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.

Disclosure: none.