Simcere Pharmaceutical (NYSE:SCR) of Nanjing paid 111 million RMB ($14.8 million) for a 51% stake in Boda Pharmaceutical, a company that markets a rival to Simcere’s best-selling drug, Bicun. Bicun, an injected edaravone, is a neuroprotective drug. It is administered following a stroke to protect organs during reperfusion (a return of blood supply following stroke). Boda makes the only other injected edaravone available in China.
Bicun is very important to Simcere. In Q2 of 2007, Bicun contributed 110 million RMB of revenue, one-third of the total sales of the company. That figure was up from 20% of revenue in the year earlier period. The sales of Bicun have ramped up quickly since its introduction: its revenues can boast a CAGR of 210% from 2004 to 2006. Simcere calls Bicun a “first-to-market, branded generic drug.” Edaravone has been investigated heavily in Japan for use as a neuroprotectant.
Simcere did not release revenue figures for Boda, but it did say the company was “fast-growing.” It produces injectable edaravone under the brand name Yidashen. Together the two companies will seek to increase the awareness of injectable edaravone in stroke patients, while they consolidate their rival sales networks.
When Simcere completed its IPO on the NYSE in April 2007, it proposed using a portion of the proceeds to make acquisitions. This is the first acquisition it has announced since the IPO. Simcere bought Endu, an innovative cancer drug, in 2006, prior to the IPO.
The company netted $162 million in the IPO, of which $53 million was left over after the amount initialed for debt reduction, R&D and new facilities.