The Week in Review: China Biopharma Investing Pays Off

Includes: CBP, PPDI, SVA
by: ChinaBio Today

China biopharma investing was the major news theme in stories that appeared during the past week in ChinaBio Today. Some of the articles are a January retrospective to see what happened during the previous year, while other stories cover current events that are putting new capital into China biopharmas in 2008. Bringing a proper balance to the outlook, there were also stories about progress in biopharma products, which after all, is the point of the investment.

Overall, US venture capital had a very good year in 2007. The total amount invested was $29.4 billion, up 11% (see story). But nestled in the VC numbers was the fact that China was the destination for $1.4 billion of US venture capital, 5% of the total. That was a record, and India, not far behind at $1.1 billion, also saw all-time highs.

In China, $3.25 billion in venture capital was put to work by investors of all nationalities, including domestic ones (see story). Bio/healthcare snagged $409 million of the total, a 12.6% slice of all China VC. There were 40 investments closed, so the average size of an investment works out to $10.2 million.

Sinovac Biotech Ltd. (NASDAQ:SVA) raised new cash through a secondary offering, placing 2.5 million shares to raise $9.75 million in gross proceeds (see story). That is just about the same amount of cash as Sinovac already had on the books. Sinovac makes a solid profit on its hepatitis A vaccine; its flu vaccine is generating increasing revenues since Sinovac entered a co-marketing agreement with GlaxoSmithKline (NYSE:GSK); and its avian flu vaccine is progressing steadily through its clinical trials.

NovaMed Pharma closed a Series B venture capital funding that brought in $13.8 million (see story). The new round brings the total the company has raised to almost $19 million. NovaMed, a Shanghai CRO that helps biopharmas navigate their products through the SFDA approval process and then distribute their drugs, says it will use the money to in-license new molecules, expand its distribution operation, and increase R&D.

PPD, Inc (NASDAQ:PPDI), a worldwide CRO based in Wilmington NC, will invest in a global central lab services facility in Beijing (see story). To do this, PPD will partner with Peking Union Lawke Biomedical Development Limited [PUL], putting specialized equipment into PUL’s existing lab. PPD already has central lab facilities in Brussels, Belgium, and Highland Heights, KY. The new Beijing lab will offer the same services as the existing lab, and its instruments will be calibrated with the other facilities so that results from all labs will be interchangable. However, the purpose of the Beijing lab is to meet the needs of China clients.

One article that did not deal directly with money and investment was the latest installment in our series that covers the proposed changes in China’s patent law. Guest authors Dr. Charles C. Liu and Jeanne J. Liu have reviewed the new plan, and they provide a discussion this week in developments in the areas of “Foreign Filing License and Patent Export Control,” “Administrative Enforcement” and “Administrative Control” (see story).

On the product development front, there were two reports showing that the invested money was creating results. Renhuang Pharmaceuticals, Inc. (OTC:RHGP) successfully produced lyophilized syringin powder, a new formulation of a successful traditional Chinese medication (see story). It is extracted from Acanthopanax (or Siberian Ginseng), which is already the major contributor to Renhuang’s revenues. The new compound is a powder injection intended to treat depression and fatigue.

And finally, Calypte Biomedical [CBMC.OB] said its oral HIV diagnostic test passed the technical review part of the SFDA approval process (see story). The Aware HIV-1/2 OMT produces a diagnosis in just 20 minutes without any lab work, which makes it useful for less developed countries. The Aware HIV-1/2 OMT must still prove that it is in conformity with the regulations for products standards and labeling before final approval is granted.

Disclosure: none.

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