In late October, when PPD, Inc. acquired fellow CRO Excel PharmaStudies, we suggested more CRO consolidation might follow. However, it was both a surprise â€“ and not a surprise â€“ when the news broke that PPD would follow up its Excel transaction with another major CRO acquisition, BioDuro LLC. The 660 employees of BioDuro, which is based in Beijing, focus on drug discovery. It gives PPD a pre-clinical capability in China, and it shows the company is deeply committed to building a major China presence. The two deals put PPD on a par with, or even possibly ahead of other major western CROs â€“ Quintiles, Covance, Charles River â€“ that have expanded into China. We expect more M&A activity will occur in Chinaâ€™s highly fragmented CRO industry.
China Cord Blood Corporation listed its ordinary shares on the New York Stock Exchange and, at the same time, completed a secondary offering. The company placed 3.3 million shares at a price of $6.05 for gross proceeds of $20 million. China allows one cord blood collection license for each major area, and China Cord Blood owns the licenses for Beijing and Guangdong.
Advanced BioMedical Technologies said its operating subsidiary, Shenzhen Changhua Biomedical Engineering Co., has signed a cooperative agreement to develop its Polyamide (PA) bio-absorbable material in new applications. Together with the First Affiliated Hospital of Guangdong Pharmaceutical University in Guangzhou, the company will conduct research and animal tests using PA for Cranio-Maxillofacial Fracture Treatment and Craniofacial Reconstruction.
In its Q3 earnings report, China Medicine Corporation announced it signed a preliminary non-binding term sheet with a private equity firm that would raise up to $59.5 million for the company. Together with a solid earnings statement, the news sent China Medicineâ€™s shares 12% higher to $2.62 on heavy volume.
Jennerex, Inc., a clinical-stage biotherapeutics company with a novel virus-based treatment for cancer, has licensed the China rights for JX-594 to Leeâ€™s Pharmaceuticals. Jennerex is headquartered in San Francisco, though its R&D operations are in Ottawa, Canada. JX-594 is currently undergoing a Phase II trial to treat hepatocellular carcinoma (HCC), an urgent unmet need in China.
Oculus Innovative Sciences (of California reported that its partners have received China regulatory approval to market its wound healing solution as an animal product. Based on the companyâ€™s MicrocynÂ® technology, Vetericynâ„˘ products speed the healing of wounds while fighting infection. Bayer Animal Health secured the approvals in China and Taiwan.
GlaxoSmithKline will begin manufacturing its treatment for flu, Relenza, in China to supply Chinaâ€™s domestic market. GSK received approval of the drug in September from the SFDA. Relenza, like Tamiflu from Roche, aims at reducing both the severity and the duration of flu symptoms, though some resistance to the drugs seems to be evident.
In an investment review of Pfizer Goldman Sachs said sales in emerging growth markets would become a significant factor in the companyâ€™s revenues, a fact that it considers underappreciated by stock market investors. China is the major emerging market for Pfizer. Goldman expects emerging growth markets to produce $3.5 billion of revenue for Pfizer in 2012, and $3 billion of that will come from China.
WuXi PharmaTech, a bellwether for Chinaâ€™s CRO industry, reported a modest increase in Q3 revenues, but clearly feels the worst of the economic downturn is in the past (see story). Revenues moved up 10% to $70 million, and net income (non-GAAP) was 33% higher at $17.6 million. The company reiterated its guidance for 2009 revenues while raising its estimate for 2009 adjusted EBITDA. China-based Laboratory Services division is the companyâ€™s major business segment and the one that reported the greatest percentage growth.
Sinovac Biotech Ltd. announced it won a $3 million contract to supply its hepatitis A vaccine, HealiveÂ®, to the Shanghai government . In its Q3 earnings release today, Sinovac said revenues of Healive were down slightly from the year-earlier quarter, but sales of its flu vaccines absolutely soared, lifting Sinovacâ€™s Q3 revenues to $21.2 million, an increase of 142%. Net income rose 606% to $5.2 million.
The Q3 results from Tongjitang Chinese Medicines Company (NYSE: TCM) continue to show a decline in sales that has been going on for two years. Revenues dropped 5% lower in the quarter to $15.3 million, and net income moved from a $1.1 million profit in the year-earlier period to a $2 million loss. The main culprit for the decline was the companyâ€™s major product, the osteoporosis treatment Xianling Gubao . Its sales fell 23% to $9 million in the quarter.
American Oriental Bioengineering reported its Q3 revenues rose 12% to $78.8 million but net income fell 39% to $10.0 million. Though the company had a list of reasons for the decline, the mixed nature of American Orientalâ€™s financial disclosures â€“ higher revenues and lower profits â€“ have been a fact of life all year for the company.