China Biotech in Review: Innovative Life Science Displayed in Hong Kong

Includes: CHME, CMEDQ, PFE, WX
by: ChinaBio Today

Innovation in China life science was pushed to the forefront at the recent two-day ChinaBio Investor Forum held in Hong Kong. The event showcased seventeen early to mid-stage companies from the Pearl River Delta Region of South China, each of which presented their business plans to interested investors (see story). A panel of venture capitalists and big pharma development executives bestowed “Most Promising Company” awards on two of the presenting companies: GeneHarbor Technologies Limited and Sinoasis Pharma, Ltd.

GeneHarbor Technologies of Hong Kong develops and manufactures novel enzymes for the pharmaceutical, nutraceutical, food and biomass ethanol industries. It has five pharmaceutical/nutraceutical products either already in production or soon to begin. Sinoasis Pharma, located in Guangzhou, uses a yeast genetic system to generate human antibody/domain libraries. The company focuses on validated targets for cancer and coronary heart disease.

In news from big pharma companies, Bayer AG (Frankfurt: BAY) is said to be working on a deal to distribute insulin products produced by Bioton S.A. in China, according to China Knowledge (see story). Bioton is a Polish biotechnology company. Janusz Guy, CEO of Bioton, would say only that the company is choosing a candidate for business cooperation from a number of different companies, a list that includes Bayer. Although Bioton's insulin is approved for use in China, Bioton does not have a distribution network there. Earlier in March, we reported that SciGen Limited [ASX: SIE], a Singapore company that is listed in Australia, received SFDA approval to begin marketing its recombinant human insulin product, SciLin, in China. SciGen is 90% owned by Bioton, which will also manufacture the product for SciGen.

Pfizer (NYSE: PFE) has teamed up with non-profit PlaNet Finance to conduct in-depth research on the healthcare needs of the working poor in China (see story). The study will examine the availability and existing sources of medicines, patient purchasing patterns, and the level of access to medical services. The goal is to identify models that may expand access to medicines and healthcare services for the working poor in China, providing Pfizer with entry into an underserved market.

China Medical Technologies (NSDQ: CMED) reported that its SPR-based Analysis System passed a milestone in its quest for SFDA approval. The system received a Quality Testing Certificate, indicating it met or surpassed all the safety and performance parameters required by the SFDA (see story). The system is in the middle of clinical trials. China Medical expects that approval for the SPR system and the HPV chip will be awarded before the end of 2009. China Medical paid $345 million to purchase the system in October 2008.

SGS Life Science Services, the CRO division of Swiss testing firm SGS, expanded its microbiology testing laboratory in Shanghai, China. The lab will now offer cGMP compliant API testing services for method development and validation (see story). The laboratory comprises 700 square meters of floor space and houses 27 full-time analytical staff. Its services include current good manufacturing (cGMP) practice standard microbiology, stability and endotoxin assessment for active pharmaceutical ingredients [API], finished products and traditional Chinese medicines.

There were also two earnings reports from China life science companies that are listed in the US. China Medicine Corporation (OTCPK:CHME) announced that 2008 revenues increased 27% to $53.6 million, while net income outpaced the growth in revenues, rising 33% to $9.1 million (see story). That is equivalent to 60 cents per share, fully diluted. The improved results build on a 75% increase in revenues in 2007. These results beat the company’s guidance, even though China Medicine warned in October 2008 it would not meet its forecast. The company’s Q4 was very strong.

And finally, WuXi PharmaTech (NYSE: WX) reported decent results for 2008. The company met, but didn’t beat, its 2008 financial guidance goals (see story). It also admitted that its $151 million AppTec acquisition has not performed up to expectations. WuXi shut down AppTec’s US-based biologics manufacturing operations in December of 2008, saying it did not see any resurgence in that sector. However, AppTec’s biopharma and medical device testing business is continuing. WuXi Chairman and CEO Ge Li blamed AppTec’s disappointing performance on the larger economic crisis, which curtailed demand for contract biologics manufacturing.

Disclosure: none.