Simcere Wins Approval for Anti-Nausea Drug, Reports Disappointing Q2

Aug.13.10 | About: Simcere Pharmaceutical (SCR)

Simcere Pharmaceutical Group (NYSE: SCR) reported that its China subsidiary, Simcere Dongyuan Pharmaceutical Co., was granted SFDA approval to manufacture and market Palonosetron material and injections. Palonosetron is given to prevent the nausea and vomiting side effects of chemotherapy. Simcere, which focuses on branded generics, already markets four other drugs that treat cancer.

Palonosetron is a second generation 5-HT3 antagonist that was originally developed by Eisei Pharma of Japan. According to statistics cited by Simcere, 5-HT3 antagonists account for 90% of the chemotherapy-induced nausea and vomiting market in China.

Although pharmaceutical companies often estimate revenue projections when drugs are given marketing approval, Simcere chose not to do so.

In the US, Palonosetron was first approved for this use in 2003. Its patent protection runs until 2015 in the US.

Simcere’s previously approved cancer drugs consist of:

  • Endu – recombinant human endostatin injection, and the company’s only patent-protected product – non-small cell lung cancer;
  • Jiebaishu – nedaplatin injection – cancer of head and neck, small cell lung cancer, non-small-cell lung carcinoma, esophageal cancer, and other solid tumors;
  • Yineng – lentinan injection – an immune system enhancer; and
  • Sinofuan – fluorouracil implants – cancer of the esophagus, breast, colon, rectum, stomach, pancreas, bladder, head and neck, and cervix.

Simcere also released its Q2 results. The company reported that revenues climbed 28% to 545 million RMB ($80.3 million). Net income rose a small 4% to 38.6 million RMB ($5.7 million).

Simcere blamed its disappointing profits on an “increase in bills factoring interest expenses paid to the financial institutions,’ as well as its share of the losses of Shanghai Celgen Bio-Pharmaceutical Co., Ltd. Simcere acquired a 35% equity share in Celgen, a monoclonal antibody company, in August 2009.

Disclosure: none.