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The Week in Review: Edan Instruments Raises $146 Million in ChiNext Debut

publication date: Apr 30, 2011
 | 
author/source: Richard Daverman, PhD

Transactions

Shenzhen Edan Instruments (SHE: 300206), a medical device maker, has completed its IPO on the ChiNext exchange, raising 950 million RMB ($146 million) (see story). The company placed 25 million shares at 38 RMB each. Edan, which derives 65.5% of its revenues from exports, makes and sells a range of medical devices, including fetal monitoring, patient monitoring and electrocardiograph equipment.

Aslan Pharmaceuticals Pte. Ltd. of Singapore announced a $12 million Series A funding, which it will use to in-license novel medicines (see story). The company’s business model is to partner development-stage drugs that are 6-12 months from entering the clinic, perform Phase I and II studies in Asia to obtain Proof of Concept, and then out-license the compounds back to partners for global development.

Sinopharm Group (HK: 1099) announced a secondary offering of $440 million worth of its publicly held shares (see story). The transaction will comprise 4% of Sinopharm’s expanded share base, raising the Hong Kong-traded portion of its capitalization from 30.5% to 34.5%. The company, which is mainland China’s largest drug distributor, said it will use the money to expand its distribution and retail networks.

Mitsui & Co., Ltd., a Japanese conglomerate with an interest in medical and healthcare, Japan, obtained a 34.2% stake in a China JV, Shenzhen Main Luck Pharmaceuticals (see story). Main Luck is China’s second largest producer of chemotherapy drugs. Mitsui expects to export cancer drugs from Main Luck for sale globally and use the sales network developed by Main Luck to distribute its own drugs in China.

Columbia University of New York City has licensed worldwide rights covering autoimmune IP to China Institute of Strategy and Management Lanmeng Investment Co. (see story). The IP posits a model of how the immune system distinguishes between foreign antigens and antigens produced by the individual. The discovery opens new treatment pathways for autoimmune diseases.

Big Pharma in China

Roche (VS: ROG) is planning for China to be one of its top 3 global revenue producers by 2015, a big move up from 10th position in 2010 (see story). The prediction came from the company’s Chairman, Franz Humer, during a visit to China. Roche’s China revenues are already more than $1 billion annually.

China Pharma CapEx

Lotus Pharmaceuticals (OTCBB: LTUS) (路坦制药有限公司) will be as much as six months late in completing its new Beijing facility, a combination of corporate headquarters, R&D labs, manufacturing, a crucial warehouse – and employee apartments (see story). There is nothing particularly unusual about the delay of a construction project, even a major one. But Lotus is already on the outs with its shareholders. In 2008, the company allocated $33 million to building a warehouse in Outer Mongolia, some 200 miles from Beijing, then apparently abandoned the project to focus on an inside-Beijing center. After all the initiatives, Lotus ended 2010 with just $1.3 million in cash and two unfinished building projects.

Earnings News

Just before the company completes its $1.8 billion Hong Kong IPO, Shanghai Pharmaceuticals Holding (SHA: 601607) reported its Q1 net income more than doubled, rising 107% to 849 million RMB ($130 million) (see story). The big earnings jump came on a comparatively modest 27% increase in sales, which hit 11.9 billion RMB ($1.8 billion). The company is definitely on a roll: earnings were up 90% in 2010 over the year earlier. No particular mystery about this. To make itself more attractive to investors, Shanghai Pharma has been in a restructuring frenzy during the last two years.

Disclosure: none.


 

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