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The Week in Review: Deals and CRO News
There was news of deals – some completed, some only possible – in the world of China biotech last week, and the CRO sector was especially prominent in the headlines as well, announcing progress on several fronts.
Sinopharm Group Co. (HK: 01099) could be a winner in the auction to acquire the German generic-drug maker Radiopharm GmbH, as second-round bids were submitted last week (see story). Also in the running are fellow drug companies Teva Pharmaceuticals (NSDQ: TEVA) and Sanofi-Aventis (NYSE: SNY) plus as many as three other companies, according to a story in Bloomberg News. Minimum bids of the four to six surviving bidders are expected to be 2 billion euros ($3 billion).
Sinocom Pharmaceutical, Inc., a Nevada corporation with operations in China, raised $15 million by placing shares of its Series A Preferred Stock with qualified investors (see story). Seavi Advent Private Equity, the South East Asia branch of Boston-based Advent International, contributed $7 million of the funding. The Series A investors will collectively own 18% of the company if they convert all of their Preferred Stock into common shares.
China Nuokang Bio-Pharmaceutical (NSDQ: NKBP) priced its IPO at $9, which was slightly below the expected range of $10-$12 (see story). When the shares began trading, they fell further, dropping 56 cents to $8.44, a loss of about 6%. The company receives 94% of its revenues from a single product, the hemocoagulant Baqueting, which is derived from the venom of the pit viper.
This week, Hubei Guangji Pharmaceutical Co. Ltd. (SH: 000952) held the ceremonial laying of a foundation stone for its major new biopharmaceutical industrial park in Dajin Town, Wuxue, Hubei Province (see story). Guangji Pharma plans to invest between 2.5 and 3 billion RMB (about $400 million) in the park over the next six to eight years. The company’s new facility will do R&D on products including vitamins, amino acids and steroid drugs.
Institut Mérieux, a French company that uses its expertise in industrial microbiology for medicine and worldwide public health, said it intends to create a center in China that combines R&D, bio-industrial and commercial activities (see story). The China center will join Institut Mérieux’s two existing advanced bases of operations, one in the EU and the other in the US. The company said China has both high-level potential in biology and significant needs in public health.
Milestone Scientific Inc. (OTCBB: MLSS) launched a JV with China National Medicines Corporation Ltd. (Sinopharm (SHA: 600511)) and Yichang Humanwell Pharmaceutical Co. Ltd., which will seek to develop orthopedic and epidural drug delivery instruments (see story). Milestone, based in New Jersey, makes painless and precise injection devices, primarily for dental and dermatological use.
In an annual review of its business plans, Eli Lilly (NYSE: LLY) revealed China’s pharmaceutical market will be a top priority for the company (see story). Lilly has reorganized its corporate structure so that one of its six units would be devoted to emerging markets, and this unit will aim at taking advantage of the expected growth in China. Because one-third of worldwide growth in pharmaceutical markets will come from emerging markets, Lilly decided to give these new markets their own unit.
Merck KGaA (XE: MRK) of Germany will conduct a multi-national Phase III clinical trial of the therapeutic cancer vaccine Stimuvax in Asian patients (see story). The trial will enroll 420 patients with advanced non-small cell lung cancer (NSCLC) in five Asian countries: China, Hong Kong, South Korea, Singapore and Taiwan. In its double-blind Phase IIb trial, the addition of Stimuvax to best supporting care extended median survival from 13.3 months to 30.6 months, an excellent result in a particularly difficult form of cancer.
Turning to CRO news, Crown Bioscience, a pre-clinical CRO providing biology services for oncology indications, will collaborate with Pfizer (NYSE: PFE) to research and develop novel drugs for cancers that are prevalent in Asia (see story). Crown will receive an upfront payment and research funding, as well as milestone payments upon achieving preclinical and clinical goals. The companies did not disclose specific financial details of their arrangement.
Shanghai ChemPartner, one of ShangPharma’s several subsidiaries, said its scientists contributed to the breakthrough cancer research announced by Agios Pharmaceuticals, with whom ChemPartner has an ongoing relationship (see story). In the November 22 online issue of Nature, Agios scientists published an article showing the mutated IDH1 gene has a novel enzyme activity consistent with a cancer-causing gene, or oncogene, revealing new possibilities for novel cancer treatments. The research was at least partly carried out at ChemPartner.
Medicilon/MPI Preclinical Research-Shanghai has received accreditation to conduct GLP studies that meet US FDA standards (see story). Shanghai Medicilon and MPI Research of Michigan (USA) announced the formation of their JV offering pre-clinical CRO services in December 2007. Its 50,000 square foot lab, which was completed in February 2008, is located in Shanghai’s Chuansha Economic Park. GLP certification was a goal of the JV from its start, according to company officials.
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