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Deals and Financings

Drug companies are increasing their M&A spending in emerging markets, and China is garnering the lion's share of activity, according to data from Thomson Reuters (see story). All together, including capital from both overseas and domestic drug manufacturers, M&A in emerging countries has totaled $20 billion this year. That's a jump of 67% over last year. China deals were responsible for one-third of the total: $6.8 billion.

Sinopharm (China National Pharmaceutical Group) and China Development Bank recently signed a 40 billion RMB ($6.4 billion) agreement that will help Sinopharm - and China's pharma industry as a whole - develop on several fronts. CDB will supply the investment in a combination of investment, loans, debt, rent and other financial services. With the new capital, Sinopharm will seek to advance its R&D and manufacturing, while it also internationalizes the pharma industry.

Shanghai Fosun Pharma (SHA: 600196; HK: 2196) and Dalian Wanchun Biotech will establish a JV to develop innovative oncology treatments. Wanchun has in-licensed China rights to plinabulin, a Class 1.1 innovative anti-tumor drug from Nereus Pharma of the US. Through the JV, Fosun will build Wanchun's development ability and add potential drugs to its pipeline. Wanchun will serve as an innovative drug incubator for Fosun.

The Shanghai Institute of Biochemistry and Cell Biology, Chinese Academy of Science, will collaborate with MRC Technology, a UK-based technology transfer and early development institute. SIBCB will contribute potential new drug targets, on which MRC will build IP and conduct early-stage research. MRC describes itself as a liaison between university-level researchers and pharmas that are looking for lead drug candidates.

Jiangxi Boya Bio-Pharmaceutical (SHA: 300294) will pay up to $18.5 million to purchase a 68% stake in Zhejiang Haikang Biologicals. Both companies are involved in blood products and plasma collection. The deal was structured to include earn-out provisions over the next three years and will allow Boya to increase its ownership of Haikang if specific conditions are met. Boya bought the 68% stake from a third party.

Featured Companies

DelMar Pharma, a virtual company based in Vancouver, is developing a treatment for cancer. It partnered with Guangxi Wuzhou Pharma, which was already marketing the drug to the China market. Initially, DelMar established a supplier relationship with Wuzhou, and then expanded the partnership in October into a more far-reaching collaboration. In an exclusive interview with ChinaBio Today, CEO Jeffrey Bacha discusses DelMar and his experience partnering with his China counterpart.

Trials and Approvals

Mauna Kea Technologies, a French medical device maker, has been granted SFDA approval to market its probe-based microscope, Cellvizio, in China. Cellvizio is a Confocal Laser Endomicroscopy product (pCLE) that allows doctors to view tissue inside the body at the cellular level during an endoscopy procedure. Mauna Kea will partner with Fujifilm (China) Investment to market Cellvizio in China.

Veridex, a Johnson & Johnson (NYSE: JNJ) company, received SFDA approval for CellSearch, an in vitro diagnostic device that tests for circulating tumor cells in the bloodstream (see story). The initial indication is women with metastatic breast cancer. In 2004, CellSearch was first approved in the US, also for metastatic breast cancer. Subsequently, it added indications for metastatic colon cancer and metastatic prostate cancer.

Disclosure: none.

Source: China Biotech In Review: China Leads Emerging Countries Pharma M&A