Last week in the virtual pages of ChinaBio Today, we introduced a series of articles that will take a broad look at the current status of China life science. Entitled “The State of China Life Science in 2009 – An Introduction,” the articles lay out our positive case for the sector (see story), despite the economic crisis that seems to be affecting every corner of the business world. Without question, China life science has been negatively impacted by the crisis, but the damage to China life science has been – on a relative basis – fairly light. The research team at ChinaBio has dug deep to provide concrete data on the current state of China life science, proprietary data that we think is encouraging and that underscores our long-term positive attitude. As a way of assessing the health of biopharma in China, upcoming articles will discuss the particular topics of technology development, clinical trial activity, investment and deal making.
ChinaBio Today also concluded our three-part series on the recently finalized major revision of China's patent statutes and administrative rules (see story). The revision was a major undertaking. It has been underway for almost four years and involved three separate draft proposals. In the final installment, author Dr. Charles Liu of Unitalen Law covers the topics Patent Misuse and Unfaithful Proceeding, Compulsory Licenses, Disclosure of Genetic Resources, Patent Licensing and Joint Ownership, Empowerment of Patent Administration, and Designation of Patent Firms to Handle Foreign-Related Matters.
One acquisition made last week’s ChinaBio Today’s pages. Genesis Pharmaceuticals Enterprises (GNPH.OB) announced that it will pay $12.2 million to acquire most of the assets of Shandong Chinese Traditional Medicine College and its wholly owned subsidiary, Hongrui Pharmaceuticals, Ltd. (see story). Hongrui brings with it a portfolio of 22 TCM drugs. In the first twelve months after the acquisition closes, Genesis expects the Hongrui products will increase revenues by 150 million RMB ($19.2 million). Net income should climb by about 24 million RMB ($3 million) during the same period.
RHEI Pharmaceuticals NV of Belgium bought an option on the China rights for Invisicare from Skinvisible, Inc. ((OTCBB: SKVI)) (see story). Invisicare is a patented polymer delivery system, designed to be combined with topical drug products, which extends the time that active pharmaceutical ingredients remain on the skin, resisting both wash off and perspiration. RHEI will seek SFDA approval for the product. Terms of the agreement were not disclosed. If the product receives SFDA approval, RHEI will market OTC and prescription drug products that contain Invisicare in China, Hong Kong and Taiwan.
Shanghai Fosun Pharmaceutical has upped its stake in Tongjitang Chinese Medicines (NYSE:TCM) to 13.2% (see story). It was the eighth purchase of Tongjitang that Fosun has made, starting last fall, and it brings the total number of Tongjitang shares it owns to 17.8 million. The 17.8 million shares equate to 4.5 million ADSs (each ADS is equivalent to 4 ordinary shares; the ADSs trade on the NYSE). So far, Fosun has said it does not have any intent to acquire control of Tongjitang, but the company’s low stock price makes it a very attractive target.
And finally, Lotus Pharmaceuticals (OTCPK:LTUS) paid 180 million RMB ($26.3 million) to purchase land use rights in the Chahaer Industrial Park, located in Inner Mongolia, about a two and one-half hour drive west of Beijing (see story). Lotus plans to build a factory, office building and logistics facility on a portion of the land. It hopes to sell the remaining 80% of the tract to a variety of similar companies, creating a small pharmaceutical park. Total costs for Lotus’s own facilities and the pharmaceutical park will be 400 million RMB ($58.5 million) over and above the cost of the land itself.