China Biotech Review: Simcere Pharma Files for American IPO

Simcere Pharma, which makes generic drugs for the Chinese market, filed for an IPO that could raise up to $120 million. The company intends to list shares on the NYSE under the symbol SCR.

In 2006, Simcere earned a profit of $22 million on $122 million of revenue. Compared to the prior year, profits rose almost 70% on a 25% increase in revenue. The company makes 35 pharmaceutical products at the moment, though it has approval to manufacture 100 other products. The current product line includes antibiotics, an anti-stroke drug called Bicun and an anti-cancer therapy known as both Endu and Endostar.

Simcere said that it would spend $52 million of the IPO proceeds to fund R&D, $30 million to repay short-term borrowings, $14 million to build production facilities, and $13 million to beef up its marketing effort.

Charles River Labs (CRL), a medical research and services company, will establish a presence in China by forming a joint venture with Shanghai BioExplorer, which provides early-stage drug development services. Charles River will be the majority owner of the joint venture. As part of this initiative, Charles River will build a 50,000 square foot facility in Shanghai, which will open in mid-2008 and offer pre-clinical services. The facility will conduct GLP and non-GLP toxicology studies that meet FDA standards as well as Charles River's stringent animal welfare policies.

Nutra Pharma Corporation [NPHC.OB] signed a letter of intent to create a joint venture in China that will develop an HIV drug that Nutra’s subsidiary Recepto Pharm currently has in Phase II trials. The joint venture would develop RPI-MN for the Chinese market.

AstraZeneca (AZN) will build a research facility in Shanghai’s Zhangjiang Hi-Tech Park, where it will locate its Innovation Centre China [ICC] temporarily. The goal of the center is to develop innovative medical products for Chinese patients, with an initial concentration on cancer. The facility will study Chinese patients, biomarkers and genetics. It aims to develop biomarkers for cancer.

AstraZeneca, which expects to open the facility in mid-2007, will hire at least 70 scientists and physicians in the new effort. They will join a staff of 2,900 people who already work in China for AstraZeneca. AstraZeneca was the first multinational pharma to conduct large-scale international multi-center trials in China.

Brenda Pharma (BPMA.OB), which develops and manufactures conventional medicines and Traditional Chinese Medicines, has added two new members to its Board of Directors. Dr. Q. Y. Ma is the managing director of venture capital firm Time Innovation Ventures, with experience in investing in mainland China. He was on the staff at Columbia and Harvard Medical School. Eric Yu Tak Shing is currently Benda's Chief Financial Officer. In addition to medicines, Brenda sells active pharmaceutical ingredients and bulk chemicals.