Sihuan Pharmaceutical Holdings (HKEX: 0460) priced its IPO at HK$4.60, the top of its range and, ironically, the same number as its Hong Kong exchange symbol, as though the price was somehow foreordained (see story). The offering placed 1.25 billion shares, raising HK$5.75 billion ($741 million), a price that gives the company a P/E ratio of 26.7 times expected 2011 earnings.

Before the IPO was completed, New Horizon Capital sold its 540 million RMB ($80 million) investment in Sihuan back to the company, after the Hong Kong exchange objected to the original transaction (see story). New Horizon, a private equity firm, was co-founded by Wen Yunsong, the son of China's Premier. New Horizon accepted a gain of “only” 60%. Regulators felt the purchase, made just three months before Sihuan’s planned IPO, looked like New Horizon was given a sweetheart price.

Shanghai Pharmaceutical (SHEX: 601607), China's second-largest drug maker by revenue, announced itwill stage a Hong Kong IPO next year to raise between $1.2 billion and $1.5 billion (see story). The offering will constitute as much as 25% of the company’s total outstanding shares. Half of the proceeds will be used to fund M&A transactions.

ShangPharma Corporation (NYSE: SHP), a major Shanghai CRO, has completed its New York Stock Exchange IPO. The company priced its shares at $15, in the middle of its expected range (see story). The offering placed 5.8 million ADSs, comprised of 3.2 million belonging to the company and 2.6 million from selling shareholders. Proceeds to the company were $48 million before fees. The stock traded down to $13.95 by the end of the week.

Under China’s 12th Five-Year Plan, covering 2011-2015, the government of the PRC plans to consolidate the country’s system of drug distribution around one or two national-level companies, which will have revenues of more than 100 billion RMB ($15 billion) (see story). On the regional level, 20 major companies will be created. Each of them will have sales of at least 10 billion RMB ($1.5 billion).

Pfizer (NYSE: PFE) has struck a deal worth up to $350 million with Biocon Ltd., the company that claims to be India’s biggest biotech drugmaker (see story). The two will collaborate on diabetes drugs, combining Pfizer’s marketing power and Biocon’s low-cost manufacturing ability. Biosimilars are a hot item throughout the world. Although India currently has a lead over China in cGMP biologics manufacturing, China is racing to catch up.

Takeda Pharma (TO: 4502) of Japan will acquire the remaining 25% of its China JV, Tianjin Takeda Pharmaceuticals Co., Ltd., from its former partner, Tianjin Lisheng Pharma, giving Takeda complete control of the enterprise (see story). Lishing, a state-owned company, decided last year to sell its 25% stake. By law, Lishing was required to hold an auction, and Takeda was the only bidder, though the amount was not disclosed.

Livzon Pharmaceutical (SHEN: 000513) unveiled a plan to develop a 2 billion RMB ($300 million) bio-tech park in Jinwan District, Zhuhai of Guangdong Province over the next five to eight years (see story). As a first step, the company will invest 116 million RMB in a biological agency project in the park, which will become operational in 2012.


ProMetic Life Sciences (TSX: PLI) of Canada has enlisted Shanghai Allist Pharma to develop and commercialize two of ProMetic's drug candidates in China (see story). Allist will fund the costs to develop the products for SFDA approval, meeting US FDA standards in the studies, allowing ProMetric to use Allist’s work for approval in ex-China markets. ProMetic expects Allist to spend more than $10 million to complete this project. Allist will have exclusive rights to the products in China.

Disclosure: none.

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