China Biotech In Review: GSK To Explore Synthetic Versions Of Chinese Medicines

Includes: GSK, TPI
by: ChinaBio Today


ChinaBio LLC and EBD Group announced the ChinaBio Partnering Forum 2012 will be held in Suzhou, a growing center for pharma development in China, at the Kempinski Hotel Suzhou, May 23-24. The fourth iteration of the popular conference, the ChinaBio Partnering Forum is the premier life science partnering event in China. It is expected to bring hundreds of attendees from around the world seeking to increase their market share and embark on new business deals in China. The theme of this year’s event is “Leveraging Market Opportunities in China.”

Deals and Financings

Beijing Leadman Biochemistry (SHE: 300289) completed an IPO on the Shenzhen’s ChiNext exchange, raising almost $79 million. The company issued 38.4 million shares at a price of 13 RMB. Leadman produces IVD reagents, medical devices, and chemical raw materials. The issue price reflects a PE ratio of 37. In its first open market session, Leadman rose even higher, climbing 25% to 16.2 RMB per share.

Zhejiang Medicine (SHA: 600216) reduced the price of an upcoming private placement from 27.98 RMB to 18.73 RMB per share, reflecting a drop in the company’s stock price. One year ago, Zhejiang was trading at over 38 RMB, but it has slipped to 22.60 currently. The price of the private placement represents a discount of about 17% to the market. Zhejiang, which makes antibiotics, vitamin H and carotene, will offer 70 million shares to raise $254 million.

BioDuro, a pre-clinical Beijing CRO, signed a three-year agreement with Dow AgroSciences. The two companies will seek novel molecules that synthesize and test fungicides, insecticides and herbicides in crops. Although BioDuro's biochemistry skills have been used primarily to discover medicines, Dow AgroSciences will apply them to the field of agroscience. BioDuro was bought by PPD in 2009 for $78 million in a strategic move that increased PPD’s presence in China’s CRO market.

BGI, formerly known as Beijing Genomics Institute, launched its first European Genome Research Center, a collaboration with Danish scientists. The organization is located in Copenhagen Bio Science Park. BGI, which positioned the center as solidifying its already well-established ties with Denmark, will use the center as its European headquarters. The center will seek to establish collaborations with European research agencies and pharmas to further genomics research in health care, agriculture and bioenergy.

Government and Regulatory

China plans to expand its list of essential drugs to 800, up from 307 in the initial group, which was released in 2009 There may be 500 western drugs and up to 300 TCM products in the final listing, according to China’s Minister of Health Zhu Chen, who was speaking to reporters at a World Health Organization briefing. Although the 2009 list was made up of basic products, mainly generics, Chen said the revised formulary may include patent-protected drugs for specialized diseases such as cancer.

Big Pharma in China

GlaxoSmithKline (NYSE: GSK) said it will begin investigating traditional Chinese medicines, studying effective examples to see whether the company can make synthetic versions of them – a combination of TCM and modern drug development (see story). Three years ago, GSK reorganized its drug R&D operation into about 40 Discovery Performance Units, each one devoted to a particular target. Last week, GSK said it would organize a DPU that focuses on TCM.

Company News

Asymchem Laboratories, a pharma CMO, has opened a new large-scale manufacturing plant in Dunhua, China. The new facility, which will be known as Jilin Asymchem Laboratories, was built for commercial projects. Asymchem spent $20 million to bring the plant to its present capability. The company plans to spend another $12 million over the next two years to give the facility additional downstream capabilities. Asymchem is headquartered in the Research Triangle, in North Carolina though its operations are in China.

Tianyin Pharma (AMEX: TPI) has begun construction of a new manufacturing facility in Qionglai (see story). Phase I of Qionglai project, expected to be completed by the end of 2012, will be devoted to pre-extraction of TCM active ingredients. When Phase II is completed in 2013, Tianyin’s production capacity will be doubled. The company says its ability to supply products is constrained by the limits of its present facilities.

Disclosure: none.