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Week in Review: GSK Ends China Bribery Investigation by Paying $489 Million Fine

publication date: Sep 20, 2014
 | 
author/source: Richard Daverman, PhD

Company News

To end the fourteen-month long investigation into its practice of bribing doctors in China, GlaxoSmithKline (NYSE: GSK) was ordered by a China court to pay a $489 million fine (see story). The fine (equal to 3 billion RMB) is a record in China, though GSK is probably relieved it wasn't higher. In addition, Mark Reilly, head of GSK China's operations when the scandal broke, was given a suspended sentence and deported. Four GSK China-national executives were also given suspended sentences. 

Deals and Financings

CASI Pharma (NSDQ: CASI), formerly known as EntreMed, in-licensed China rights to three cancer products from Spectrum Pharma (NSDQ: SPPI) in exchange for a 20% stake in CASI and a $1.5 million promissory note (see story). CASI has a market capitalization of almost $48 million, giving the 20% stake a value of close to $10 million and the entire deal a total value of $11.5 million. The transaction contains no provisions for milestones or royalties. Both companies are based in the US, though CASI is primarily focused on the China market and maintains a Beijing operation. 

BeiGene, a Beijing novel drug developer, received a $9 million milestone from Merck Serono (XETRA: MRK) for starting a Phase I trial of BGB-290, a second generation PARP inhibitor (see story). Less than a year ago, Merck Serono and BeiGene entered a co-development agreement for BGB-290 in a deal than included an unspecified upfront payment and $232 million of milestones. It was the second transaction between the two companies and the second to trigger a milestone. In May, BeiGene received a $5 million milestone from Merck Serono for starting a clinical trial of BGB-283, a second-generation BRAF inhibitor. 

Denovo Biopharma, a US-China company, acquired global rights to enzastaurin, a late-clinical-stage oncology drug from Eli Lilly (NYSE: LLY) (see story). In 2013, enzastaurin failed a Phase III clinical trial for diffuse large B-cell lymphoma, though it significantly improved progression-free survival in a subset of patients. Denovo believes it can use its proprietary biomarker expertise to identify that patient group and conduct a successful trial of enzastaurin. Denovo is headquartered in San Diego with a lab in Hangzhou. 

BGI, the Shenzhen-based genomic sequencing powerhouse, partnered with the Vancouver Prostate Center (VPC) to create a sequencing and translational research facility focused on improving cancer care (see story). The BGI-VPC Joint Research Laboratory will apply genomic research to develop new biomarkers and cancer therapies, with an initial focus on bladder, kidney and prostate cancer. The lab, which is already operating at the VPC facility in Vancouver, British Columbia, is BGI's first collaboration with a Canadian institution. 

3SBio, a Shenyang-based biopharma, acquired an exclusive China license from JenKem Technology of China to develop, manufacture and market JenKem's pegylated form of irinotecan, a chemotherapy (see story). Irinotecan inhibits topoisomerase I (Topo-I), which is over-expressed in many solid tumors. Initially, 3SBio will develop PEG-irinotecan for metastatic colorectal cancer and breast cancer, as well as platinum-resistant ovarian cancer. Financial details were not disclosed. 

CSPC Zhongqi Pharmaceutical Technology (Shijiazhuang) will collaborate with Columbia University of New York City to develop drugs that inhibit aldose reductase, an enzyme that causes eye and nerve damage (see story). Aldose reductase inhibitor drugs may treat a number of serious conditions. CSPC will underwrite research carried out by the Organic Chemistry Collaborative Center at Columbia’s Department of Medicine. CSPC will have the right to develop and commercialize OCCC-discovered molecules, which are initially intended for the China market. 

Milestone Scientific (OTCQB: MLSS), a US medical device company, and Milestone China will form a dermatological joint venture to develop and sell a painless botox injection system (see story). Milestone China is, in turn, a joint venture that Milestone formed to distribute its painless dental anesthesia product in China. The botox-focused JV will be known as Milestone Advanced Cosmetic Systems. 

Disclosure: none.


 

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