BMP Sunstone Acquires Pediatric Drug Company

| About: BMP Sunstone (BJGP)

BMP Sunstone Corporation (BJGP) signed a non-binding letter of intent to acquire 75% of Zhangjiakou Shengda Pharmaceutical Co., Ltd, a subsidiary of the Zhangjiakou Pharmaceutical Group, at a price of up to 30.0 million RMB ($4.4 million). Terms will be finalized following completion of due diligence and definitive documentation. The letter of intent includes a six-month exclusivity clause.

For BMP Sunstone, the logic behind the acquisition is provided by the pediatric pharmaceutical focus of Shengda. Shengda concentrates on antibiotic R&D and boasts 75 SFDA product licenses. BMP Sunstone said Shengda’s products will extend BMP’s GoodBaby line of OTC and prescription products.

“While we are not interested in entering the low-end generic antibiotics market, the Shengda products we intend to acquire specifically target the oral pediatrics market. They fit nicely under our GoodBaby brand and also complement our pediatrics franchise in both the OTC and Rx markets,” said Mr. Zhiqiang Han, President and Chief Operating Officer of BMP Sunstone, in a statement. He continued on to predict that BMP Sunstone’s pediatric marketing team would be able to increase the revenues produced by Shengda’s products.

Shengda’s most important products are amoxicillin tablets, capsules and clavulanate potassium compound preparation, which are prepared in dosages and flavors that target use by children.

BMP Sunstone, which began primarily as a distribution company that offered registration services to ex-China companies, has been moving increasingly into manufacturing its own drugs. Its Sunstone acquisition, which was closed in February of this year, was a major move in that direction, and the Shengda acquisition continues the company’s progress along the same path.

Disclosure: none.