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The Week in Review: Will Novartis IPO in Shanghai?
publication date: Jul 16, 2011
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author/source: Richard Daverman, PhD
Deals and Transactions
Novartis (NYSE: NVS) is contemplating a China IPO (see story). Although such an event would have been inconceivable a few years ago, it may very well happen. By the end of 2012, the Shanghai stock exchange hopes to open an international section for foreign multinationals with an interest in China, which will be initially available for just ten companies. Reportedly, Novartis has been talking to China officials about being a member of the first group.
Shanghai Pharmaceutical Holding (SHA: 601607) plans to make a $310 million capital expenditure that will, among other things, solidify its drug distribution business in North China (see story). The company will put $155 million of capital in its distribution subsidiary to bulk up its sales network. Another $80 million will go to establish a sales unit in North China, and it will spend $75 million in an information technology venture.
Guizhou Bailing Group Pharma (SHE: 002424) paid $6.2 million for a 60% stake in Guizhou Herentang Pharma, a company with six patents for Miao ethnic TCMs (see story). Both Herentang and Bailing specialize in TCMs that are part of the minority Miao culture of Southern China. Herentang also produces pediatric paracetamol and amantadine hydrochloride.
Sagent Pharma (NSDQ: SGNT) of the US will add one more China collaborator to its list of 12 China collaborators (see story). Sagent, which specializes in generic injectable drugs, has announced a relationship with Chongqing Lummy Pharma (SHE: 300006), another company that is active in the injectable sector.
Hikma Pharma, a Jordanian pharma with significant presence in the Middle East/North African region, paid $5 million to acquire a significant minority interest in Hubei Haosun Pharma (see story). Haosun, which is privately held, develops and manufactures difficult-to-make APIs with a specialization in oncology treatments. Hikma positioned the transaction as a means of gaining long-term access to high quality APIs.
Bimeda Animal Health, a veterinary medicine company headquartered in Ireland, announced a China joint venture with Shijiazhuang Rainbow Laboratories (see story). The JV, which will make veterinary and animal health products for the China market, is equally owned by Bimeda and Rainbow Labs. Bimeda expects to increase its investment in the JV over time.
Industry Insights
China’s academic and research institutions received 15% of all patents granted worldwide for drug research in 2007-2008. That far outpaced the 2% that India’s institutions were awarded, and it also handily topped the 5% garnered by US academics (see story). In terms of scientific papers, Indian researchers are third in the world, having published 4,642 biopharma papers in the last decade. However, during the same time period, China published 5,720, good for second place, and the US took first place with 13,314.
Big Pharma in China
Bristol-Myers Squibb (NYSE: BMY) expects China to become its second or third largest market within a decade (see story). That’s a big jump from eighth place currently and a projected sixth next year. To get this task accomplished, BMS will increase its R&D staff in Shanghai, and it plans to increase its number of collaborations with domestic China pharmas.
Trials and Approvals
3SBio (NSDQ: SSRX) reported the SFDA has approved its high-dose formulation of EPIAO, a treatment for chemotherapy-induced anemia (see story). The high dose version allows once-a-week administration, a big advantage over the three-times-weekly protocol of the low-dose formulation of the drug. It’s been a long wait for the regulatory blessing: 3SBio filed for SFDA approval of EPIAO in December 1998.
Disclosure: none.
Novartis (NYSE: NVS) is contemplating a China IPO (see story). Although such an event would have been inconceivable a few years ago, it may very well happen. By the end of 2012, the Shanghai stock exchange hopes to open an international section for foreign multinationals with an interest in China, which will be initially available for just ten companies. Reportedly, Novartis has been talking to China officials about being a member of the first group.
Shanghai Pharmaceutical Holding (SHA: 601607) plans to make a $310 million capital expenditure that will, among other things, solidify its drug distribution business in North China (see story). The company will put $155 million of capital in its distribution subsidiary to bulk up its sales network. Another $80 million will go to establish a sales unit in North China, and it will spend $75 million in an information technology venture.
Guizhou Bailing Group Pharma (SHE: 002424) paid $6.2 million for a 60% stake in Guizhou Herentang Pharma, a company with six patents for Miao ethnic TCMs (see story). Both Herentang and Bailing specialize in TCMs that are part of the minority Miao culture of Southern China. Herentang also produces pediatric paracetamol and amantadine hydrochloride.
Sagent Pharma (NSDQ: SGNT) of the US will add one more China collaborator to its list of 12 China collaborators (see story). Sagent, which specializes in generic injectable drugs, has announced a relationship with Chongqing Lummy Pharma (SHE: 300006), another company that is active in the injectable sector.
Hikma Pharma, a Jordanian pharma with significant presence in the Middle East/North African region, paid $5 million to acquire a significant minority interest in Hubei Haosun Pharma (see story). Haosun, which is privately held, develops and manufactures difficult-to-make APIs with a specialization in oncology treatments. Hikma positioned the transaction as a means of gaining long-term access to high quality APIs.
Bimeda Animal Health, a veterinary medicine company headquartered in Ireland, announced a China joint venture with Shijiazhuang Rainbow Laboratories (see story). The JV, which will make veterinary and animal health products for the China market, is equally owned by Bimeda and Rainbow Labs. Bimeda expects to increase its investment in the JV over time.
Industry Insights
China’s academic and research institutions received 15% of all patents granted worldwide for drug research in 2007-2008. That far outpaced the 2% that India’s institutions were awarded, and it also handily topped the 5% garnered by US academics (see story). In terms of scientific papers, Indian researchers are third in the world, having published 4,642 biopharma papers in the last decade. However, during the same time period, China published 5,720, good for second place, and the US took first place with 13,314.
Big Pharma in China
Bristol-Myers Squibb (NYSE: BMY) expects China to become its second or third largest market within a decade (see story). That’s a big jump from eighth place currently and a projected sixth next year. To get this task accomplished, BMS will increase its R&D staff in Shanghai, and it plans to increase its number of collaborations with domestic China pharmas.
Trials and Approvals
3SBio (NSDQ: SSRX) reported the SFDA has approved its high-dose formulation of EPIAO, a treatment for chemotherapy-induced anemia (see story). The high dose version allows once-a-week administration, a big advantage over the three-times-weekly protocol of the low-dose formulation of the drug. It’s been a long wait for the regulatory blessing: 3SBio filed for SFDA approval of EPIAO in December 1998.
Disclosure: none.
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