China Biotech Week In Review: Simcere Pharma Going Private

Includes: GSK, SCR
by: ChinaBio Today

Trials and Approvals

Chengdu Kanghong Pharmaceutical Group was granted CFDA approval for conbercept, a novel treatment for wet age-related macular degeneration. The drug is the first innovative, China-developed monoclonal antibody to gain regulatory approval, a significant milestone. The company believes its drug offers significant advantages over similar existing western MAbs.

MicuRx Pharmaceuticals, a San Francisco-Shanghai company focused on antibiotics, will start a China Phase II trial of its next-gen oxazolidinone antibiotic. The trial will enroll 200 patients with complicated skin and skin structure infections. MRX-I was developed to treat drug-resistant Gram-positive infections. The China trial is part of a larger global development program for MRX-I: the company is also starting a Phase I bridging study in Australia in a non-Chinese population.

Deals and Financings

Alvogen, a multinational maker of complex generic drugs, will buy 67% of Taiwan's Lotus Pharmaceutical for $210 million. Lotus makes generic oral and injection drugs in a wide variety of therapeutic areas. Lotus will manufacture Alvogen drugs, which will be sold in China and the rest of Asia, while, reciprocally, Alvogen will help Lotus obtain US approval for its products.

Hutchison China MediTech (Chi-Med) will form a drug distribution JV with Sinopharm (HK: 1099), investing $9.8 million to buy majority control (51%) of a Sinopharm subsidiary, HuYong Pharmaceutical (Shanghai). Chi-Med intends to use the JV to distribute its own drug products and to provide distribution/marketing services to other pharmas.

Simcere Pharma (NYSE: SCR) will go private, the last in a line of US-listed China pharmas to regain private-company status (see story). Shareholders voted overwhelmingly in favor of a deal that values the company at $506 million. A consortium led by the company's chairman and founder, Jinsheng Ren, offered $9.66 per ADS ($4.83 per ordinary share) last March. As a private company, Simcere will probably not be as inclined to report the progress of its innovative partnerships, a loss for those of us outside the company.

Company News

GlaxoSmithKline (NYSE: GSK) made changes to two of its marketing practices, aiming to be at the forefront of ethical changes in the way drugs are marketed (see story). The company said (1) it will no longer pay its sales people for meeting sales targets, and (2) it will stop paying doctors for speaking about GSK products or attending conferences. GSK never mentioned the word "China" as it discussed the new system, even though the old payment rules were partly to blame for China's bribery scandal that erupted this year.

A Shanghai Pharmaceuticals (SHA: 601607; HK: 2607) subsidiary has been accused of bribing hospital staff to prescribe its drugs. According to a whistleblower, Qingdao Growful Pharma paid $126,300 in bribes to boost sales of an iron supplement, Hong Yuan Da. The report alleges the bribes went to staff members of 31 hospitals in Qingdao during the first six months of 2013.

China's police staged several raids on businesses selling counterfeit medicines, arresting 1,300 people nationwide, according to official state sources. Altogether, police seized $362 million of fake drugs and raw materials. While most of the drugs were harmless - a combination of starch and materials past their use-by dates - a small percentage contained poisons or psychedelic materials, said the police. Most of the operations sold their merchandise on internet sites.

Disclosure: none.