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The Week in Review: China Pharma IPOs Raise $5.4 Billion in 12 Months
publication date: Jul 24, 2010
author/source: Richard Daverman, PhD
The spectacular $1.3 billion IPO of Sinopharm Group in September 2009 may have been the biggest headline grabber, but the underlying reality is that a broad range of China pharma companies have been warmly received by investors. In fact, a total of 23 China life science enterprises have gone public in the last year, listing their shares on China mainland exchanges or in Hong Kong (see story). Although eight of the deals were worth less than $100 million, their total value is $5.4 billion, showing that investors are very willing to put their money into life science companies.
China’s central government spent 80 billion RMB ($11.8 billion) to reform the nation’s healthcare system in the first six months of 2010, according to the National Development and Reform Commission (NDRC) (see story). Of that, 53 billion RMB ($7.6 billion) was put into building a basic medical insurance system, and 26 billion RMB ($3.8 billion) went toward equalizing basic health care services in China. The latter is a way of saying that money was spent to improve the availability of basic services in rural areas.
CCBI Healthcare Fund, a private equity fund established by China Construction Bank (HKEX: 0939), has made an investment in Shanghai Kindly Enterprise Development Group (KDL), a maker of polymer medical devices in China (see story). KDL has the largest market share for needles in China and is one of the top three needle product companies in Asia.
Lijun International Pharmaceutical (HKEX: 02005) agreed to set up a Joint Venture with Tonghua Dongbao Pharmaceuticals (SHEX: 600867) in Jilin Province (see story). The JV will manufacture and sell large volume intravenous infusion solutions. Lijun is headquartered in Hong Kong, though the majority of its operations are in the PRC.
In its initial filing for a Nasdaq IPO, BioHorizons, a US-based dental implant company, revealed it expects to market its products in China soon (see story). The company has already submitted filings with the SFDA for approval of the medical devices. BioHorizon hopes its Nasdaq IPO will raise as much as $100 million.
BMP Sunstone (NSDQ: BJGP) rose more than 10% on Monday on rumors that it would be acquired by a private firm (see story). According to published reports, the company will be bought for a price somewhere between $9 and $10, with an announcement espected in the next few days. The name of the suspected acquirer was not disclosed. Company officials refused to comment on the reports.
Lee's Pharmaceutical (GEM: 8221) will be the exclusive China distributor for Remodulin, a United Therapeutics (NSDQ: UTHR) product (see story). Remodulin is a prostacyclin analogue for the treatment of pulmonary arterial hypertension. Lee's Pharma will be responsible for obtaining approval of the drug in China, which will include conducting bridging studies.
Beike Biotechnology Co. Ltd. has opened a rehabilitation center in Romania where it will offer traditional China rehabilitation techniques that are prescribed as part of its stem cell therapies in China, but are sometimes difficult to find elsewhere (see story).
Novartis (NYSE: NVS) reported the SFDA has approved China use of Rasilez® (aliskiren), a treatment for high blood pressure (see story). A first-in-class direct renin inhibitor, Renin is part of the renin-angiotensin-aldosterone system that narrows blood vessels and helps regulate blood pressure. It is approved for use alone or in combination with other hypertensives.
Bayer Schering AG of Germany and The People’s Liberation Army General Hospital (301 Hospital) of Beijing have begun a research collaboration to study women’s health (see story). Bayer will fund research projects at 301 Hospital and offer internships at its Berlin R&D facilities to scientists from the hospital.