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The Week in Review: Sihuan Pharma Uses M&A to Add Vascular Drugs
publication date: Jun 25, 2011
author/source: Richard Daverman, PhD
Deals and Transactions
Sihuan Pharma (HK: 0460) paid $120 million to acquire two China drug companies, Vinise Pharma and Hainan Litzman Pharma (see story). The transaction adds to Sihuan’s portfolio of treatments for cardio-cerebral vascular diseases by taking the company into TCM preparations – Vinise Pharma’s specialty – for the first time. Vinise also has expertise in large-volume injections, another new area for Sihuan.
Shandong Jincheng Pharmaceutical and Chemical (SHE: 300233) completed a $72 million IPO on Shenzhen’s ChiNext exchange (see story). The company issued 25 million shares at 18.6 yuan each, reflecting a P/E ratio of 22.7. Jincheng Pharma makes cephalosporin intermediates. It plans to use the proceeds of the offering to expand its production capacity.
BGI and the city of Shenzhen have established a national gene bank in Shenzhen (see story). BGI, formerly known as Beijing Genomics Institute, but now located in Shenzhen, is one of the world’s largest genomic sequencing centers. The two entities will raise $2.3 million to fund the first phase of operations. BGI supplied the original data and will provide a home for the bank, but other biological organizations are expected to contribute data in the future.
Collaborations and Partnerships
China pharmas will collaborate with their counterparts in England to develop 30 new drugs over the next ten years (see story). The plan, which is sponsored by both governments, involves almost $155 million over ten years. Britain will contribute about $17 million of the total. The plan was announced by Dr. David Wilkinson, who represented Britain’s National Institute for Medical Research. The NIMR is the largest institute supported by the Medical Research Council, a government entity.
Sirnaomics, located in Maryland, USA, has partnered with Guangdong Zhongsheng Pharma (SZE: 002317) to develop its small interfering RNA (siRNA) ocular neovascularization therapeutic (see story). The partnership will seek to develop and commercialize STP601, a Sirnaomics siRNA candidate for treatment of diabetic retinopathy and age-related macular degeneration. Zhongsheng Pharma is committing $9.8 million to the partnership, including upfront and milestone payments.
China Medical Technologies (NSDQ: CMED), an in-vitro diagnostic products company, announced a strategic collaboration with Gaoxin Da An Health, which owns eight independent labs in China. Da An offers clinical diagnostic testing services to many China hospitals (see story). Da An will co-promote China Medical’s products, and the two companies will work together to develop new diagnostic products.
Biomatters, a New Zealand company that produces software for DNA analysis, has signed a strategic partnership with US-based Genewiz, a CRO offering DNA sequencing services (see story). In addition to labs in the US, Genewiz has facilities in Beijing and Suzhou, China, which were opened in the last year. According to Biomatters, Genewiz is the largest private contract sequencing company in China and will, as a result, give it entry into the China marketplace.
Big Pharma in China
Johnson & Johnson Medical (Suzhou) (NYSE: JNJ) announced the opening of a China innovation center in Suzhou Industrial Park that will be in charge of developing medical devices and diagnostic products for Asia, with a particular focus on China and India (see story). The center has already hired 45 researchers. It expects the number to rise to 70
The SFDA has ordered GlaxoSmithKline (NYSE: GSK) to withdraw an antibiotic from China after trace elements of a banned substance were found in samples (see story). The drug is amoxicillin and clavulanate potassium. SFDA tests of the drug showed small amounts – the SFDA did not say how much – of an additive included in plastics to make them more flexible. From a larger perspective, the incident is one more skirmish in the long-running battle between China and the West over drug safety.
Medivir AB (OMX: MVIR), a Swedish biopharma focused on infectious diseases, out-licensed exclusive China rights for its cold sore treatment, Xerclear® to Daewoong Pharma of South Korea (see story). Daewoong will be responsible for conducting clinical trials and obtaining SFDA approval on the product. Medivir will receive royalties on sales of Xerclear, which was first approved in the US and Europe in 2009.