Simcere Buys Cancer Drug Company

Simcere Pharmaceutical Group (NYSE: SCR), which makes and sells the gene therapy cancer drug Endu in China, will pay 65 million RMB ($9 million) to acquire a 70% interest in Wuhu Zhong Ren Pharmaceutical Co. Ltd, another cancer drug manufacturer. This is the fourth equity investment Simcere has made since completing its IPO, one year ago.

Zhong Ren Pharmaceutical’s main product is SinoFuan, a fluorouracil sustained release implant that is indicated for cancers of the digestive tract. It is the only such product approved for use in China.

Simcere said it will be able to improve the revenues of SinoFuan by distributing the product through its already developed cancer marketing channels.

In April 2007, Simcere completed its IPO on the NYSE, raising gross proceeds of $227 million by pricing 15.6 million ADSs at $14.50. It is currently trading at $11.06.

Simcere booked 1.39 billion RMB ($190.5 million) of revenue in 2007, an increase of 46%. Its net earnings were higher by 75% at 301 million RMB ($41.3 million). The majority of Simcere's revenues come from its branded generic pharmaceutical business. The company expects to report revenues of at least 2 billion RMB ($286 million) in 2008 and profits of 400 million RMB ($57 million).

During the course of 2007, Simcere made the following investments:

• 10% interest in Shandong Simcere Medgenn Bio-Pharmaceutical Company Limited (an existing subsidiary) for 27.1 million RMB ($3.9 million),
• 51% interest in Jilin Province Boda Pharmaceutical Company Limited for 123.1 million RMB ($17.6 million),

• 100% interest in Master Luck Corporation Limited for 32.9 million RMB ($4.7 million), which in turn holds 85.71% equity interest in Nanjing Tung Chit Pharmaceutical Company Limited.