Pfizer (NYSE: PFE) will expand its China R&D operations by adding facilities in central and western China, according to a Reuters story. The company will build a new clinical R&D center in Wuhan, which will support global clinical drug programs, including Phase I-IV clinical trials. Pfizer did not announce the size of capital commitment to the new R&D center.

Earlier this month, Pfizer announced it would close six of its 20 R&D centers around the world in the wake of its takeover of Wyeth Pharmaceuticals. At the time, we noted the company considered its Shanghai facility to be important enough to shield it from any cutbacks. Now it seems that the company is actually increasing its commitment to performing R&D work in China.

Sinovac Biotech (NSDQ: SVA) announced a new Joint Venture, Sinovac (Dalian) Vaccine Technology Co., Ltd., that will research, develop and produce human vaccines. Sinovac will contribute its vaccine expertise and capital, while Dalian Jin Gang Group will throw in land use rights, manufacturing facilities and established operating infrastructure. Representatives of Sinovac will fill the major operational posts in the JV.

At the outset, Sinovac will contribute 60 million RMB ($8.8 million), which will give it a 30% share. In the next year, by December 31, 2010, Sinovac will add another 50 million RMB ($7.5 million) in capital, upping its stake in the JV to a majority 55%. The cash value of Dalian Jin Gang Group manufacturing assets was set at 140 million RMB ($22.5 million).

Merck Serono, a division of Germany’s Merck KGaA (MRK), will build a global R&D center in Beijing, China, spending $225 million over the next four years. The center, which will eventually house 200 employees, will be the fourth major R&D center for the company. The Beijing center will be tasked with meeting unmet needs in China’s public health system. Merck Serono positioned the center as proof of the company’s commitment to the pharmaceutical market in China.

The research activities in the Beijing center will focus on biomarker research including pharmacogenomics and bioanalytics activities. In addition, the center’s specific, and fairly diverse, goals are:

China Nuokang Bio-Pharmaceutical (NKBP), a company focused on hematological and cardiovascular drugs, will offer 4.5 million ADSs on the Nasdaq exchange at a price between $10 and $12. The mid-point of the range represents a $50 million debut for Nuokang.

The offering gives further evidence that investors are looking favorably at China biopharma IPOs. Most of the recent IPOs have taken place in China, but Nuokang is banking on transferring the magic to the US, even though the IPO window in the US shuts down as the end-of-year holiday season approaches.

In late October, when PPD, Inc. (NSDQ: PPDI) acquired fellow CRO Excel PharmaStudies, we suggested more CRO consolidation might follow. However, it was both a surprise – and not a surprise – when the news broke that PPD would follow up its Excel transaction with another major CRO acquisition, BioDuro LLC (see story). The 660 employees of BioDuro, which is based in Beijing, focus on drug discovery.

As Greg Scott, our Executive Editor, points out, the acquisition was interesting because it gives PPD a pre-clinical capability in China, and it shows the company is deeply committed to building a major China presence. The two deals put PPD on a par with, or even possibly ahead of other major western CROs – Quintiles, Covance (NYSE: CVD), Charles River (NYSE: CRL) – that have expanded into China. We expect more M&A activity will occur in China’s highly fragmented CRO industry.

GlaxoSmithKline (NYSE: GSK) will begin manufacturing its treatment for flu, Relenza, in China to supply China’s domestic market. GSK received approval of the drug in September from the SFDA. Relenza, like Tamiflu from Roche (RHHBY.PK), aims at reducing both the severity and the duration of flu symptoms, though some resistance to the drugs seems to be evident.

The move by GSK reflects the larger trend of big pharmas’ interest in providing basic medicines to China, a trend that seems to be gaining momentum.

China Cord Blood Corporation (NYSE: CO) listed its ordinary shares on the New York Stock Exchange and, at the same time, completed a secondary offering. The company placed 3.3 million shares at a price of $6.05 for gross proceeds of $20 million. China allows one cord blood collection license for each major area, and China Cord Blood owns the licenses for Beijing and Guangdong.

The 3.3 million shares involved in the transaction represent 5% of the total outstanding ordinary shares, which now number 66.1 million. A small number of units were previously traded on the OTC Bulletin Board Exchange under the symbol CNDZF; each unit consisted of one ordinary share and two warrants.

In an investment review of Pfizer (NYSE: PFE), Goldman Sachs said sales in emerging growth markets would become a significant factor in the company’s revenues, a fact that it considers underappreciated by stock market investors. China is the major emerging market for Pfizer.

Goldman expects emerging growth markets to produce $3.5 billion of revenue for Pfizer in 2012, and $3 billion of that will come from China.

PPD, Inc. (NSDQ: PPDI) is quickly building up its China-based CRO capability. The company announced it will acquire BioDuro LLC, a CRO based in Beijing whose 660 employees focus on drug discovery (pre-clinical) services. The acquisition complements PPD’s purchase of Excel PharmaStudies earlier this month. Excel is a clinical CRO that conducts Phase II through Phase IV clinical trials from its offices throughout China. PPD did not disclose financial details of either transaction.

BioDuro has grown quickly. Founded in 2005 by Masood Tayebi, it operates a 110,000-square-foot laboratory in Beijing. All of its operations are in China, though it maintains a corporate headquarters in San Diego. The company specializes in medicinal chemistry, biology, pharmacology, drug metabolism, pharmacokinetic and safety services. It has the resources to synthesize novel compounds and optimize those compounds to generate drug development candidates.

The Q3 results from Tongjitang Chinese Medicines Company (NYSE: TCM) continue to show a decline in sales that has been going on for two years. Revenues dropped 5% lower in the quarter to $15.3 million, and net income moved from a $1.1 million profit in the year-earlier period to a $2 million loss.

The main culprit for the decline was the company’s major product, the osteoporosis treatment Xianling Gubao (XLGB). Its sales fell 23% to $9 million in the quarter. Tongjitang put the blame for its lower revenues on China’s healthcare reform, which has caused distributors and retail outlets to draw down inventory as they wait for lower prices. That is only the latest in a series of problems that Tongjitang and XLGB have faced.

American Oriental Bioengineering (NYSE: AOB) reported its Q3 revenues rose 12% to $78.8 million but net income fell 39% to $10.0 million. Though the company had a list of reasons for the decline, the mixed nature of American Oriental’s financial disclosures – higher revenues and lower profits – have been a fact of life all year for the company.

One of the factors has been slower sales for Shuanghuanglian Injection Powder, the company’s lead product. American Oriental says revenues for SHL will be down 30% this year. A TCM product with anti-viral effect, SHL is used to treat bronchial infections.

Advanced BioMedical Technologies (ABMT.OB) said its operating subsidiary, Shenzhen Changhua Biomedical Engineering Co. (ABT-Changhua), has signed a cooperative agreement to develop its Polyamide (PA) bio-absorbable material in new applications. Together with the First Affiliated Hospital of Guangdong Pharmaceutical University in Guangzhou, the company will conduct research and animal tests using PA for Cranio-Maxillofacial Fracture Treatment and Craniofacial Reconstruction.

ABT-Changhua will produce miniscrews and plates using its patented PA bio-absorbable material. GDPU Hospital will conduct research and animal testing on these medical devices, and it will also carry out a Phase II clinical trial for this new indication. The goals will be safety and efficacy data, which will support a request to the SFDA for a Phase III trial.

WuXi PharmaTech (NYSE: WX), a bellwether for China’s CRO industry, reported a modest increase in Q3 revenues, but clearly feels the worst of the economic downturn is in the past. Revenues move up 10% to $70 million, and net income (non-GAAP) was 33% higher at $17.6 million. The company reiterated its guidance for 2009 revenues ($265-$275 million) while raising its estimate for 2009 adjusted EBITDA ($86-$90 million, up $5 million). China-based Laboratory Services division is the company’s best performing segment.

Revenues from China-based Laboratory Services rose 29% to $48 million, about 69% of the company’s total sales. The biggest problem for WuXi PharmaTech was its Manufacturing Services division, which saw its revenues decline 44% to $5.7 million. WuXi is quick to point out that the division’s sales are volatile, depending on customers' delivery schedules. The US Laboratory Services division’s revenues were down 1%.

Sinovac Biotech Ltd. (NSDQ: SVA) announced it has won a $3 million contract to supply its hepatitis A vaccine, Healive, to the Shanghai government. Sinovac said five companies vied for the contract, but Sinovac was chosen the sole supplier. Sinovac will supply Healive to Shanghai over the next twelve months.

The order came as a result of expanded government purchase programs for vaccines, which are part of the national expanded immunization program (EPI) funded by the Chinese government.

Oculus Innovative Sciences (NSDQ: OCLS) of California reported that its partners have received China regulatory approval to market its wound healing solution as an animal product. Based on the company’s Microcyn technology, Vetericyn products speed the healing of wounds while fighting infection. Bayer (BAYRY.PK) Animal Health secured the approvals in China and Taiwan.

Oculus is currently negotiating distribution agreements with Bayer, involving both pricing and minimum purchases, for the two countries.

In its Q3 earnings report, China Medicine Corporation (CHME.OB) announced it signed a preliminary non-binding term sheet with a private equity firm that would raise up to $59.5 million for the company. Together with a solid earnings statement, the news sent China Medicine’s shares 12% higher to $2.62 on heavy volume.

The funding would take place in three stages: (1) $7.5 million in convertible secure notes with a conversion price of $3.50 per share; (2) $24.2 million in newly issued shares at $2.60; and (3) $27.8 million in newly issued shares, also at $2.60 but at China Medicine’s discretion. China Medicine ended the quarter with just $2.2 million in cash, though it stated its working capital was $32 million.

Earnings season has now arrived, and China life science companies are reporting financial results from their most recent quarters. Although Mindray Medical (NYSE: MR), the medical device maker, announced a flat quarter, four small biopharmas had the pleasure of telling investors that revenues and profits are back on a significant upswing.

All China life science companies may not follow this pattern, but it is a refreshing change to read earnings reports that do not have to mention the unsettled conditions caused by a worldwide financial crisis.

WuXi PharmaTech (NYSE: WX) has signed a letter of intent with the Wuxi Outsourcing Area for Bio-Medical Research and Development to establish a facility that will provide R&D services. So far, WuXi PharmaTech has not made a formal announcement of the LOI, though company officials did confirm its existence to ChinaBio® Today. They caution that WuXi PharmaTech has not begun construction, nor committed itself to a specific timetable.

According to reports, WuXi PharmaTech will form a new firm with registered capital of 100 million RMB ($14.7 million) that covers an area of 6.7 hectares.

Novartis (NYSE: NVS) once again said that India is not a place to do R&D because its IP laws are not strong enough to protect discoveries. In 2006, Novartis made a commitment to build a $125 million R&D facility in Hyderabad. The next year, after the company lost a patent battle over its blockbuster cancer drug, Gleevec (Glivec outside the US), Novartis reneged on the center (see story). Last week, Novartis earmarked $1.25 billion for R&D activity in China.

“In principle you can discover in India, you can do research. There has been some progress on the protection of intellectual property but it’s not up to the standard that I would expect to make an investment into discovery-led research,” said Novartis CEO Daniel Vasella in an interview with Reuters.

BMP Sunstone Corporation (NSDQ: BJGP) and Pfizer China (NYSE: PFE) have formed a strategic partnership to distribute and promote Depo-Provera (Medroxy-progesterone Acetate), a Pfizer product used to treat endometriosis, in China. Endometriosis is a medical condition in women of childbearing age that can cause significant pain. Financial details of the agreement were not disclosed.

The partnership is interesting because Pfizer has its own drug distribution network in China. But the big pharma decided that in this niche, it could do better by forming an alliance with BMP Sunstone, which has an established line of women’s and infant medical products. BMP acquired the products by buying Sunstone in 2007, which made and distributed the Hao Wawa (Good Baby) brand for children's healthcare and Kang Fu Te (Comfort) for women's healthcare. After the acquisition, BMP became known as BMP Sunstone.