China Biotech Week In Review: J&J Actively Pursuing M&A In China

by: ChinaBio Today

For the first time, a Partnering Bootcamp has been added to the annual ChinaBio Partnering Forum. The Bootcamp, a half-day pre-conference program sponsored by Cooley LLP, will take place on the afternoon of Tuesday, May 22. The ChinaBio Partnering Forum is hosted by ChinaBio LLC, a leading consulting firm in Shanghai, and EBD Group, a leading biopharma event organizer. This year's Partnering Forum will be held May 23-24 in Suzhou, China.

Deals and Partnerships

China National Biotech Group (CNBG) will stage a $1.6 billion IPO in Hong Kong, according to sources. CNBG is one of many subsidiaries of the sprawling state-owned China National Pharmaceutical Group Corp (Sinopharm). The IPO is expected to take place in the first half of 2012. CNBG is China's largest biotech company, operating six institutes in major China cities and producing revenues of $790 million in 2010.

Zhejiang Conba Pharma (SHA: 600572) took in $148 million of new cash via a private placement of 120 million shares. The funds will be used to boost working capital, according to a company filing. Insiders will purchase the entirety, or at least the majority, of the offering. The new funds add about 15% to Conba's capital base, as the company currently has a market capitalization of $1 billion.

Ningbo David Medical Device Co. (SHE: 300314) completed its IPO on the ChiNext Exchange, raising $63.5 million (see story). The company placed 20 million shares at a price of 20 RMB each, a price/earnings ratio of 30. After rising to a high of 30 RMB, the stock was trading at 26.13 RMB, a return of 31% for the IPO investors. David Medical Device produces infant warmers and products that treat infant jaundice, along with other products that are used in neonatal units.

Ventac Partners has in-licensed potential diabetes 2 treatments from Guangzhou Institute of Biomedicine and Health, Chinese Academy of Sciences (GIBH). The molecules target the ERR-alpha receptor, which has been shown to affect the body's ability to respond to insulin. Ventac has placed responsibility for the venture in a new company, CASiGEN Pharma Ltd. CASiGEN will seek investors to advance development of the molecules, and it expects to form a partnership with a mainland China company to bring new diabetes drugs to the China market.

Two China institutions - Shanxi Zhendong Pharmaceutical Company (SHE: 300158) and the Shanxi College of Traditional Chinese Medicine - have banded together with the University of Adelaide in Australia to study the molecular basis of traditional Chinese medicine. Located at the University of Adelaide, the new center's ultimate goal is to integrate TCM into Western medicine.

Big Pharma in China

Johnson & Johnson (NYSE: JNJ) is actively pursuing M&A in China as a way of keeping its revenue growth at least equal to the general rise in China's pharmaceutical market (see story). J&J is especially interested in companies that would add products to its portfolio of mental health drugs and cancer treatments. Unlike some of its big pharma competitors, the company is not branching out into generic drugs as a way to increase China revenues.

Announcing two separate strategic China initiatives, Bristol-Myers Squibb (NYSE: BMY) increased its commitment to building its presence in China and its bid for a larger share of the country's prescription drug market (see story). On the one hand, BMS formed a multi-year strategic partnership with Tsinghua University of Beijing. BMS will underwrite early-stage research to identify new drug targets in oncology and immunoscience. Meanwhile, with a $20 million investment, BMS will expand its manufacturing capacity at its Shanghai site, allowing the company to produce diabetes drugs in China.

Trials and Approvals

Baxter International (NYSE: BAX) received approval from the SFDA of its treatment for hemophilia A, a product known as Advate (see story). Advate is a recombinant human coagulation factor VIII for injection used both for control and prevention of bleeding in individuals with hemophilia A. According to Baxter, more than 50,000 people in China have hemophilia A.

Company News

Novozymes Biopharma, the pharmaceutical subsidiary of Novozymes A/S (OTCPK:NVZMF), a Swedish maker of industrial enzymes, has begun selling hyaluronic acid that is made at its new Tianjin facility (see story). Novozymes' HA product is manufactured via a Bacillus-based process, while conventionally produced HA is derived from rooster combs or strains of Streptococcus bacteria. In comparison to its competitors' HA, Novozymes says its HA is less prone to impurities or viral contamination.


Zhejiang Hisun Pharma (SHA: 600267) was chosen to be the commercial supplier of ThermoDox, a clinical-stage liver cancer drug developed by Celsion (NSDQ: CLSN) of the US (see story). ThermoDox is Celsion's proprietary liposomal encapsulation of doxorubicin. Hisun positioned the agreement as a step toward developing a portfolio of branded generics products. In February of this year, Hisun announced a $245 million JV with Pfizer (NYSE: PFE), a project also devoted to branded generics.

Disclosure: none.