The Week In Review: NeoStem To Divest Interest In China Subsidiary

Includes: CLBS
by: ChinaBio Today

Deals and Financings

Quintiles, the global clinical CRO headquartered in North Carolina, announced it will invest $14 million to build a regional headquarters for China in Shanghai's Feng Lin Science Park. The company will also construct a 43,000 square foot lab testing facility at the site, which Quintiles expects will house over 450 employees within five years. Quintiles established a joint venture with Shanghai Clinical Research Center (SCRC) to provide central lab services from the facility.

Ascepion Pharma of Suzhou has out-licensed worldwide rights to one of its small molecule drug candidates to Swiss biopharma Debiopharm Group. The molecule, ASP-08126, is a multikinase inhibitor currently in pre-clinical development. ASP-08126 is an oral drug that binds and inhibits several tyrosine kinase oncogenes. These oncogenes are implicated in various parts of cancer development including tumor growth, metastasis and angiogenesis. Terms of the agreement were not disclosed.

Gentris, a North Carolina pharmacogenomic services company, and the Shanghai Institutes of Preventive Medicine (SIPM) signed a memorandum of understanding that establishes a collaboration to discover genomic biomarkers. Gentris will identify US pharmas for personalized medicine projects, while SIPM will seek support from China organizations. The collaboration wants to build a network of academic, industry and public health collaborators to advance pharmacogenomics R&D.

NeoStem (NYSE: NBS) will divest its 51% interest in its China subsidiary, Suzhou Erye Pharmaceutical, for $12.3 million in cash, selling it to the owners of the remaining 49% of the business (see story). It will also cancel some of the shares and warrants it issued to acquire Erye Pharma in 2009. NeoStem will realize a loss of between $18 million and $22 million on the transaction. According to NeoStem, China's clampdown on antibiotic use and price controls on generic antibiotics made the acquisition less profitable than it projected at the time of the original transaction.

Company News

China Medical Technologies (CMEDY), a maker of IVD and DNA medical devices, faces liquidation after bondholders filed a petition in the company's Cayman Island home to force the proceeding (see story). China Medical did not make a December 15, 2011 payment on its convertible bonds due in 2016. Meanwhile, the company has "gone dark," neglecting to file its usual quarterly reports or communicate in any way with investors. Strangely enough, the company's stock price is rising as the news gets worse.

Xiamen Innovax Biotech expects to launch Hecolin, its hepatitis E vaccine, in China later this year. It will form partnerships to bring the product to worldwide markets. In January of this year, the SFDA approved the vaccine after it was effective in a large Phase III trial. Innovax is the development arm of the National Institute of Diagnostics and Vaccine Development in Infectious Diseases at Xiamen University.

Disclosure: none.