China Sky One Strikes Deal for 15 New Products

| About: China Sky (CSKI)

China Sky One Medical (NSDQ: CSKI) has asked the SFDA to approve production licenses for 15 new externally applied TCM medical products. The company expects to receive permission to manufacture the products by the end of the year and begin marketing the products next year. The 15 products were developed by Heilongjiang Traditional Chinese Medical University, which also sponsored the production request.

China Sky One explained that research institutions cannot apply for production licenses directly, but must transfer the IP for new products to a drug manufacturer. China Sky One signed a deal with Heilongjiang TCM University that transfers the IP at a price at least 20% below its appraised value. The company did not disclose the dollar value of the transaction.

The new products will be manufactured at Harbin Tian Di Ren Medical Science and Technology Company, the Company's wholly owned subsidiary in China.

China Sky One is always very active on the new product front, expanding its portfolio either through in-house research or by in-licensing products from other companies. In the first six months of 2010, the company reported $69.7 million of revenues, a 22% increase, and net income of $24.8 million, up 39% from the year earlier.

However, in September, China Sky One lost several of its distributors, and it lowered its 2010 guidance as a result. The company dropped its revenue forecast from $162 million to $132 million, and it now expects full-year net income of $28.5 million, down from $40.5 million.

China Sky One’s 15 new products include a Vaginal Suppository, Anti-virus Mouth Wash, Eye Patch, Diabetes Relief Patch, Snore Stopper, Rheumatoid Pain Relief Patch, Liver Patch, Ear Patch, Cicatrice Patch, Sore Relief Patch, Dental Ulcer Membrane, Dental Ulcer Mouth Wash, Nose Patch, Period Pain Relief Patch, and Wound Healing Patch.

Disclosure: none.

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Tagged: , Drug Related Products, China
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