BMP Sunstone Takes 50% Stake in Pediatric Drug Maker

| About: BMP Sunstone (BJGP)

BMP Sunstone Corporation (BJGP) will pay 20 million RMB ($3 million) to acquire 50% of Zhangjiakou Shengda Pharmaceutical Co., Ltd. from Beijing Penn Pharmaceutical Sci-Tech Development Co., Ltd. Eventually, BMP Sunstone intends to acquire a majority stake in Shengda. Shengda has changed its name to Sunstone Shengda (Zhangjiakou) Pharmaceutical Co., Ltd., and Mr. Zhiqiang Han, President and COO of BMP Sunstone, will become Chairman of both Sunstone and Sunstone Shengda. BMP Sunstone said it paid for the acquisition out of its cash flow.

Like BMP Sunstone, Shengda focuses on the pediatric market with a special interest in antibiotics. It has SFDA approval to manufacture 76 drugs, many of which are formulations of penicillin and cephalosporin. They also produce amoxicillin tablets and capsules, as well as clavulanate potassium compounds, often in dispersible tablet form. BMP Sunstone did not release revenue figures for Shengda’s products.

Among other synergies, BMP Sunstone will give Shengda access to the large metropolitan areas of Beijing, Shanghai and Guangzhou, which it did not have previously. BMP Sunstone also mentioned that Shengda’s R&D expertise would be a positive addition to the company, helping to add to BMP Sunstone’s offerings in pediatric pharmaceuticals.

BMP became a manufacturer of pharmaceuticals in February of this year, when it bought Sunstone, adding a drug maker to its drug distribution network. It also has eight foreign products for which it has exclusive multi-year contracts in China. Its primary emphasis is pediatric and women’s health products.

Disclosure: none.