The proposed merger between Charles River Laboratories (NYSE: CRL) and WuXi AppTec (NYSE: WX) fell apart this week (see story). Citing investor concerns about uncertainties surrounding the deal, Charles River has officially withdrawn its $21.25 cash and stock offer for all of WuXi’s shares. The large American firm must now pay its China counterpart a $30 million breakup fee.

In an open letter to customers, which was obtained by ChinaBio®, Dr. Ge Li, Chairman and CEO of WuXi AppTec, said “short-term financial concerns” were the reason its merger with Charles River Labs was not completed (see story). Dr. Li expressed regret that the failure of the merger would slow WuXi’s evolution into a company with a broader set of CRO capabilities.

In deciding to end its merger with WuXi AppTec, we argue that Charles River is passing up a one-time opportunity to establish near-complete global dominance in its industry (see story). The deal significantly undervalued WuXi because it ignored WuXi’s strategic value as the dominant player in the world's most important emerging market.

China Kanghui Holdings, a medical-device company, filed to make an IPO on the New York Stock Exchange that will raise up to $75 million (see story). Kanghui makes orthopedic implants such as plates and screws for use in treating trauma or spinal conditions. It recorded a profit of $11 million on sales of $27 million in 2009. However, the accretion of convertible preferred shares turned the profit into a net loss of $1.7 million.

Kangmei Pharmaceutical (SHEX: 600518) will purchase the pharmaceutical assets of two TCM companies from the Langzhong government in Sichuan province: Sichuan Tengwangge Pharmaceutical and Sichuan Baoning Pharmaceutical (see story). The company will invest 300 million RMB ($44 million) in Langzhong’s healthcare sector in the next two years.

Radient Pharmaceuticals (AMEX: RPC) announced a new plan to sell its China subsidiary, Jade Pharmaceuticals (see story). Jade has signed a letter of intent to merge with Shanxi BaoTai Pharmaceutical Co., a privately owned company located in Taiyuan China. When the transaction is closed, Jade plans to merge the combined entity with an unnamed public company, and the public company will move its listing to the NYSE Amex.

Affymetrix (NSDQ: AFFX) is developing a genotyping array specifically for Chinese populations (see story). When it becomes available later this year, Affymetrix expects its new product, the Axiom™ Chinese myDesign™ Genotyping Array, will be the first array available to power genome-wide association studies (GWAS) on a China-specific population.

Merck Sharp & Dohme (MSD), the international arm of US big pharma Merck (NYSE: MRK), signed a letter of mutual intent with Sinopharm (China National Pharmaceutical Group Corporation) (SHEX: 600511) to market Gardasil®, Merck’s vaccine for human papillomavirus (HPV) in China (see story). HPV, if left untreated, can cause cervical cancer. The two companies plan to establish a joint venture.

China has signed an intellectual property agreement with Taiwan that calls for each country to automatically recognize IP as valid in both countries, even if it is filed only in one (see story). Under the new agreement, the two countries will be able to verify IP directly with each other. Previously, they had to use Hong Kong as an intermediary. Details of the agreement remain to be worked out.


Disclosure: none.