China Biomedical Industry Evolving

by: ChinaBio Today

As proof that the biomedical world in China continues to evolve – even during the traditional summer slowdown – ChinaBio Today reported stories last week that dealt with China’s patent law revisions, gave a longer-term analysis of a biotech’s performance, and described new deals, product approvals and clinical trials.

Patent law is always a hot topic in the China biomedical sphere. China is in the process of reworking its intellectual property protection rules, and last week, guest authors Dr. Charles C. Liu and Jeanne J. Liu of Unitalen Attorneys at Law examined the differences between two drafts of the proposed changes, Draft Revision 2006 and the new thinking contained in Draft Revision 2008, to find five significant changes (see story). ChinaBio Today will present these five modifications in two installments. Last week, willful infringement and misuse of patent rights were covered. This week, the authors will present the changes in unfaithful accusation, inventions made in China, and empowerment of patent administration. All five areas should be read as significant emendations to their earlier article, “Waves of Changes in Chinese Patent Law and Regulations,” which explored the changes between Draft Revision 2006 and the existing rules (see Education Center). 

Last week, 3SBio (NSDQ: SSRX) officially filed its 2007 year-end financial report. ChinaBio Today took advantage of the event to take a long look at the company’s performance over the seventeen months since it made its IPO on Nasdaq (see story). The company continues to increase its sales of its two biosimilar anemia drugs, EPIAO and TPIAO, and it makes an outstanding profit on its revenues. However, 3SBio has not taken great advantage of the $110 million that the IPO put in its coffers. It remains much the same company – though its balance sheet is much improved – that it was before. We take a look to see if investors deserve more from 3SBio.

Every week seems to see more deals being announced in the China biomedical sphere, and last week was no exception. Biofield Corp. (OTC:BZEC) announced a JV that will spend $363 million to develop breast cancer clinics in China, using a medical device developed by Biofield (see story). The JV involves Biofield, its financial backers, the MacKay Group, and the insurance company Worldwide Lifecare Limited. Worldwide Lifecare will participate through its Carelife subsidiary and the JV is known as Carelife. Biofield’s device combines a measurement machine with single-use sensors to measure electrical changes associated with the development of epithelial cancers in breast cancer. Biofield positions the device as an alternative to both biopsies and mammograms. Long in development, the device has been granted the CE Mark, but not FDA approval. Presumably, the SFDA will have to approve use of the device before it is used in China. The JV envisions a chain of more than 500 clinics in China’s urban areas by 2012.

Bayer HealthCare [XE: 575200] finally closed its $155 million acquisition of the OTC cough and cold portfolio from Topsun Science and Technology (SHA: 600771) (see story). The acquisition process had a particularly long shelf life: it was originally announced more than a year and a half ago in October 2006. Earlier this year, the deal was on the verge of falling apart when it breached its drop-dead date. But the two parties made new arrangements, and now Topsun’s White and Black brand has become part of Bayer’s OTC product offerings. 

NovaMed struck a deal with Pfizer’s (NYSE:PFE) China division to market six cancer drugs in China (see story). Worldwide, Pfizer is committed to a greater use of outsourcing as a means of cutting costs, but this was the first time the big pharma company has done a sales outsourcing deal. Pfizer said the use of NovaMed would increase its coverage of hospitals by somewhere between 30% and 40%.

The last story in the deal sector is about one that fell apart – a kind of anti-deal. Tongjitang Chinese Medicines Company (NYSE:TCM) said the management-led offer to buy the company at $10.20 per share was withdrawn (see story). While the offer was pending, there was always at least a 10% discrepancy between the offer and the company’s ADS price, indicating a large pool of investor skepticism about whether the deal would actually get done. Tongjitang’s Chairman and a director made the offer when the company’s stock price was at a low, and it had a positive, though short-lived, effect. As time wore on, Tongjitang’s ADS price was drifting down past the $7 price it had just previous to the offer. Once the offer was withdrawn, the stock sank quickly. Over the course of the week, Tongjitang fell $2.35, dropping from $6.65 to $4.30, a 35% decline.

Chindex International (NASDAQ:CHDX) received SFDA approval for two medical devices: the daVinci S Surgical System and the AlexLaser. The daVinci S Surgical System is a robotic surgical assistance tool that facilitates minimally invasive techniques. The AlexLaser removes tattoos and pigmentation. In announcing the approvals, Chindex complained that the approval process took too much time, and was accompanied with significant delays. The company did not specify exactly how long the process took.

Sinovac Biotech (NASDAQ:SVA) reported that it will begin a Phase II clinical trial of its split viron pandemic influenza vaccine (see story). Because the split-viron version is expected to have an improved side-effect profile, the trial will be conducted among children and adolescents. The whole viron version of the vaccine has already completed its Phase II tests and received a manufacturing license.

Renhuang Pharmaceuticals (OTC:RHGP) announced its wholly-owned Traditional Chinese Medicine Extract and Innovation Laboratory was recognized as a “Key Laboratory” by the Science and Technology Institute of Heilongjiang (see story). Renhuang’s laboratory was one of only seven labs in Heilongjiang to be given the recognition. The government-supported Science and Technology Institute promotes the development of technology companies and technologically advanced products.

Disclosure: none.