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The Week in Review: Shanghai Kinetic Medical Raises $59 Million in ChiNext IPO

publication date: Jun 16, 2012
author/source: Richard Daverman, PhD
Deals and Financings

Shanghai Kinetic Medical (SHE: 300326) completed an IPO on the ChiNext Exchange, raising $59 million (see story). The company, which is headquartered in Shanghai’s Zhangjiang Hi-Tech Park, makes orthopedic devices for the spine that treat vertebral compression fractures caused by osteoporosis. The company issued 13 million shares at 29.09 RMB, a P/E ratio of 46. Its shares climbed 54% to close its first session at 44.74 RMB.

Eli Lilly (NYSE: LLY) will invest an additional $20 million in Novast Laboratories, Ltd., a Nantong company that makes generic and specialty pharmaceuticals (see story). In 2009, Lilly allocated a part of its $100 million China VC fund to Novast. With the new investment, Novast and Lilly will together develop a portfolio of branded generic drugs for the China market. In the future, Novast may manufacture the innovative drugs that Lilly develops for China and other Asian countries.

GE Healthcare (NYSE: GE) formed a stem cell collaboration with BGI, the giant gene sequencing organization based in Shenzhen (see story). The collaboration will investigate the potential utility of stem cell-derived assays for use in drug discovery and toxicity testing. In particular, it will research genetic variation between ethnically diverse human stem cell lines.

Wuhan Humanwell Healthcare (SHA: 600079) will pay $122 million to purchase an 80% stake in Beijing Baron Medical Equipment, the largest distributor of Roche’s in-vitro diagnostic products in China (see story). Baron Medical also began distributing Diagnostic Technology’s blood coagulation products in Beijing two years ago. To pay for the acquisition, Humanwell will raise 1 billion RMB ($157 million) in a private placement.

Sinopharm (HK: 1099), the largest distributor of pharmaceutical products in China, will issue $1.3 billion of corporate bonds (see story). The company says the offering, which will be used to pay down bank loans, will have the effect of lowering its effective interest rate. The money will also be used for working capital, but M&A was not included as a stated purpose for the funds.

News and Analysis

ChinaBio® LLC and BioCentury Publications, Inc. announced they have agreed to a collaboration that will make news about China’s rapidly growing biopharma industry more readily available to a global audience (see story). BioCentury, the internationally respected source of biopharma business intelligence, will be a gateway to articles from ChinaBio® Today, the most widely read source of China-focused pharmaceutical news.

Trials and Approvals

Biostar Pharmaceuticals (NSDQ GM: BSPM) and The Fourth Military Medical University (FMMU) signed a Letter of Intent regarding Viacom Pine II Cream, a topical treatment for bacterial and fungal infections, dermatitis and eczema (see story). In return for underwriting the cost of Phase I through III clinical trials for SFDA approval of the product, Biostar will gain the right to sell Viacom in China. FMMU will retain the ability to distribute it directly to military personnel.


Suzhou Pharma Services, a contract manufacturing company, has opened a US corporate headquarters in Lyndhurst, NJ (see story). Suzhou Pharma is affiliated with Amerigen Pharmaceuticals, a New Jersey company that focuses on controlled-release, solid formulation generic drugs. Suzhou’s China manufacturing facility is FDA approved and Chinese SFDA licensed for finished product cGMP manufacturing.

Disclosure: none.

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