Week In Review: CrownBio, A U.S.-China CRO, Applies For Taiwan Listing

by: ChinaBio Today

Deals and Financings

Crown Bioscience International, a pre-clinical US-China CRO/CMO focused on cancer, recently applied to list on the Mainboard of Taiwan's GreTai Securities Market. At the recent BioTaiwan conference, there was considerable "buzz" about listing in Taiwan, even if, like CrownBio, the biopharma companies aren't located there. Singapore's Aslan Pharma, for example, is said to be considering Taiwan for its upcoming IPO, and JHL Biotech, a high profile Taiwan-China biosimilar company formed by US-biotech veterans, listed in Taiwan last year.

Shanghai Fosun Pharma (SHA: 600196; HK: 2196) won the bidding war for India's Gland Pharma, paying $1.3 billion for a 86% stake. Gland makes generic injectible drugs. Most of Gland's revenues come from the US, although it also sells in India and many other countries. The deal has not yet been officially announced, so the exact price is not known. Although China and India would seem to have common interests, China-India cross-border pharma collaborations and/or M&A are almost non-existent, rendering the transaction a ground-breaker for more than just its $1.3 billion price tag.

China Resources Sanjiu Pharma (SHA: 000999) acquired Kunming Shenghuo Pharmaceutical Group, a TCM company, in a $280 million deal. Shenghuo has three subsidiaries that interest Sanjiu: Shenghuo Pharma, Shenghuo Cosmetics and Shenghuo Import & Export. Shenghuo's hotel business is not included in the deal. Sanjiu is a listed subsidiary of state-owned company China Resources Pharma, which is expected to stage a $1 billion IPO in Hong Kong soon.

Luye Pharma (HK: 2186) will pay $269 million to acquire the transdermal patch and implant business of Swiss pharma Acino, a specialist in novel drug delivery systems. The agreement includes Acino's transdermal manufacturing operations, distribution, and R&D. Acino makes its own products and also operates a transdermanl patch drug CRO/CMO for outside customers. Luye's purchase is the latest example of China pharma's desire to move past collaborations with western pharmas and actually own assets in the EU and US.

China's Yueda Group, a state-owned enterprise, officially started a China renal care JV with Diaverum of Germany. Diaverum operates 300 renal care clinics in Europe, the Middle East, Latin America and Asia. It will provide the expertise for running the China dialysis clinics, while Yueda, which hasn't previously been involved in healthcare, will fund the venture. The JV promised to provide European levels of care that will be covered under China's healthcare insurance, making it affordable. Yueda, a conglomerate with interests in several industries, has not previously been involved in life science. It is based in Jiangsu.

Frontage Labs, a US-Shanghai CRO, established a JV with Zhejiang Jiuzhou Pharma (SHA: 603456) to provide API and intermediate development/manufacturing (CDMO) services. The JV, named FJ Pharma, will combine Jiuzhou's expertise in API manufacturing with Frontage's formulation services. Jiuzhou said the service will be especially valuable for its US clients. Frontage's incubator affiliate, Frontida Biopharm, will offer finished manufacturing of drugs to the JV's clients.

Government and Regulatory

China must rebalance its healthcare system, said a deeply researched World Bank study, or it risks developing a high-cost, low-value health delivery infrastructure that will devour 9% of GDP annually in 20 years. To keep costs down, the study proposes that China develop its three-tier system fully. That means primary care institutions must be emphasized to take the burden off tertiary level hospitals. And, says the World Bank, a State Council Healthcare Group should be established to lead the far-reaching reforms.

Company News

Aspen Pharmacare, the South African generic drugmaker, plans to build its presence in China by adding 500 sales representatives in the near future. The company believes its products have the quality equivalent to big pharma drugs at a lower price - the ideal formula for China, it says. In addition, Aspen is looking for "opportunities" to expand its offerings in China and elsewhere, according to its CEO, Stephen Saad, who was speaking to Bloomberg.

Disclosure: none.