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Week in Review: China is Asia’s Biggest Biotech Cluster

publication date: Apr 5, 2014
 | 
author/source: Richard Daverman, PhD

Industry Insights

China is Asia’s number one biopharma cluster (see story), according to a ranking system devised by Genetic Engineering & Biotechnology News (see article). The country won the top spot because it led all other countries in biomedical R&D spending ($160 billion out of $243 billion in all of Asia), the number of life science companies (7,500 last year), the total number of industry jobs (over 250,000), and venture capital investment ($74 million to five companies). China was second to Japan in IPOs ($2.1 billion raised by 14 companies since 2010) while its 9,302 biotech/pharma patents (apparently counted from 1970 to the present) were in third place overall.

The ChinaBio® Partnering Forum 2014, China’s largest life science partnering event, will take place in one month, May 7–8, at the Kempinski Hotel in Suzhou (see story). For life science insiders, the CBPF is the most productive partnering event for established biotech and early stage companies to meet and collaborate with China-based corporate partners, venture capitalists and business development executives from big pharma companies.

Deals and Financings

The WuXi PharmaTech (NYSE: WX) Healthcare Fund has invested in TruTag Technologies, a Hawaii company that is developing an inert, edible microtags for authentication of food, drugs and other products (see story). TruTag’s technology etches a spectral barcode into a porous silicon wafer, which is less than the width of a human hair and can be read by a spectrometer-based device. WuXi said it intends to offer TruTag to its CRO/CMO customers. Financial details of the investment were not disclosed.

AstraZeneca (NYSE: AZN) will collaborate with Shenzhen University Health Science Center to discover new treatments for chronic kidney disease, focusing on kidney damage caused by diabetes (see story). Scientists from the Nephrology and Urology Center of Shenzhen University will put their academic and clinical skills together with the drug discovery/research expertise of AstraZeneca’s Shanghai Innovation Center researchers. Terms of the relationship were not disclosed.

The Global Fund to Fight AIDS, Tuberculosis and Malaria met with China drug suppliers in Shanghai to establish partnerships (see story). The Global Fund is establishing a new framework for planning, purchasing and delivering drugs that fight these diseases. It wants to sign long-term contracts directly with drugmakers, providing them with a reasonable profit while keeping the purchase cost at a minimum. In 2013, the Global Fund spent $2 billion to buy medicines that fight AIDS, tuberculosis and malaria in less-developed countries.

Lansen Pharmaceutical (HK: 503) acquired China rights to a Novartis (NYSE: NVS) treatment for inflammatory skin diseases, Sicorten Plus (see story). A synthetic corticosteroid, Sicorten Plus is already marketed in China. Larsen made an $8 million upfront payment and is liable for an additional $1.5 million in milestones, based on sales. Lansen distributes western drug products in China, specializing in rheumatic disease and dermatologic disorders. The company, which is 50.6% owned by Cathay International, was founded in 2001 and is headquartered in Ningbo, China.

Morgan Stanley Private Equity Asia (MSPEA) is continuing to lighten its stake in Sihuan Pharma (HK: 0460) (see story). The US investment bank will sell 120 million shares of the China pharma for about $147 million. The investment has yielded spectacular returns for MSPEA, which bought 10% of Sihuan to help the company de-list from the Singapore exchange in 2009. The go-private transaction valued Sihuan at $458 million. It now has a market cap of $7.7 billion.

Company News

Bayer HealthCare (XETRA: BAYN) will invest $138 million to expand its Beijing manufacturing facility (see story). The plant is expected to meet growing demand for Bayer’s healthcare offerings, including products in the cardiovascular and diabetes sector. The expanded facility will house logistics areas for fully automated material handling, analytical laboratories and high-speed packaging lines. China is high on Bayer’s investment list. One month ago, it purchased Dihon Pharmaceutical Group, a TCM/over-the-counter drug maker. Although the price was undisclosed, it was thought to be around $680 million.

Disclosure: none.


 

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