China Biotech Week In Review: Sinovac Biotech Receives Some Good News

by: ChinaBio Today

The ChinaBio Leadership Retreat–Taicang completed a successful two-day conclave October 10-11, 2011. The first-ever meeting of its kind to be held in China, the Leadership Retreat brought together over 180 senior executives drawn from global pharma, prominent China biopharmas and venture capitalists with an interest in China. The Retreat, an invitation-only event, offered attendees an open forum to discuss and plan the future of China’s biopharma industry.

Deals and Transactions

WuXi PharmaTech (NYSE: WX), a leading China CRO, acquired Abgent, a provider of antibodies and custom services based in Suzhou and San Diego (see story). The price was not disclosed. Because Abgent is a well-established antibody manufacturer, the transaction underscores the growing importance of biologics to WuXi’s business. Dr. Ge Li, Chairman and CEO of WuXi characterized the acquisition as “small but strategically important.”

BeiGene, a Beijing startup, acquired China rights to two clinical-stage compounds, both of them oncology drug candidates, from Janssen Pharmaceutica. Founded last year, BeiGene has an ambitious two-pronged business plan that combines in-licensing of five clinical stage drug candidates with developing its own novel drugs. The two drug candidates, intetumumab and MTKi-327, are the first acquisitions the company has made.

SemBioSys Genetics (OTC:SBIYF) of Canada formed a China JV with Tasly Pharma [SHA: 600535] of Tianjin (see story). In exchange for a 30% stake in the JV, SemBioGenetics will contribute its plant-made insulin and insulin analogues. The insulin products are in clinical development. SemBioSys positions the insulin, which is produced using safflower seeds, as a low-cost insulin biosimilar.

Chiva Pharma of China paid $4 million for global rights to an osteoporosis drug developed by Ligand Pharma (NSDQ: LGND). Fablyn is a selective estrogen receptor modulator (SERM) that was approved in the EU in 2009 for the treatment of osteoporosis in post-menopausal women. Chiva was selected as one of two “Most Promising” companies at last month’s BioBay Investor Forum, which was organized by ChinaBio.

Biostar Pharmaceuticals (NSDQ: BSPM) paid $9.6 million in cash to acquire Shaanxi Weinan Huaren Pharmaceuticals (see story). For Biostar, the attraction of Shaanxi Weinan is a portfolio of 86 approved drugs and one health product. Shaanxi Weinan reported revenues of $3.3 million in 2009 and $4.4 million in 2010, with net income of at least 15%.

The University of Hong Kong and China National Pharmaceutical Group Corporation (Sinopharm) [SHA: 01099], the largest pharmaceutical company in China, signed a Strategic Cooperation Framework Agreement. It was the first time HKU has formed a cooperation partnership with a major state-owned pharma in Mainland China.

Sinocom Pharmaceutical withdrew its plans for an IPO on the Nasdaq exchange, blaming poor market conditions. Sinocom is a drug distributor in East-Central China that has expanded to growing TCM herbs. The shares were being offered by selling shareholders, who received them as part of a $15 million financing that allowed Sinocom to build a warehouse. The company planned to raise as much as $58 million.

Trials and Approvals

ViroMed [KRX: 084990] of Korea was given SFDA approval to begin a China Phase II clinical trial of a gene therapy drug. VM202-PAD will be tested as a treatment for Critical Limb Ischemia (CLI). The drug candidate is a biologic drug based on Hepatocyte Growth Factor (HGF), a gene that stimulates the growth of arteries. Trials of VM202-PAD for this indication are already underway in Korea and the US.

Big Pharma in China

AstraZeneca (NYSE: AZN) will spend $200 million to build a major new manufacturing facility in Taizhou’s China Medical City. The plant, which will produce both IV and solid oral medications for the China market, is the largest investment AstraZeneca has ever made in a single manufacturing site. China is becoming increasingly important to AstraZeneca. In the first half of 2011, the company’s revenues in the PRC grew 22% to $624 million.

Company News

Sinovac Biotech (NSDQ: SVA) was selected by the Beijing CDC as one of the four manufacturers to supply two million doses of seasonal influenza vaccine. The actual amount shipped will depend upon demand. Sinovac needs some good news. Its sales declined from a high-water mark of $84 million in 2009, the year of the swine flu outbreak, to just $33 million in 2010. Profits fell from $20 million two years ago to a loss of $8.5 million last year. Fortunately, Sinovac has $92.7 million in cash to fall back on.

Disclosure: none.