With the first quarter of 2008 officially history, the news for US-listed China biomedical companies was not good: a loss of 27% in the ChinaBio Index (see story). That put the CBI in between the benign loss (relatively speaking) of 14% for Nasdaq-listed stocks and a more major decline of 34% for the Shanghai Composite. As one of old stock market bromides says, stocks will do what they will do. But the downturn in stock prices hasn’t seemed to have much effect on China’s biomedical enterprises, which produced a heavier than usual news flow during the last week.
CROs in particular were making deals. Commonwealth Biotechnologies, Inc. (CBTE) formed a China-based joint venture with Venturepharm Laboratories Ltd. [HKEX: 8225] (see story). CBI, with headquarters in San Diego and facilities in Richmond, Melbourne and the UK, will use the JV to extend its service offerings to include contract manufacturing and clinical trials. Venturepharm, based in Beijing, will buy a block of stock in Commonwealth that comprises 39% of CBI’s outstanding shares, worth almost $6 million.
Two other CROs, both based in the US but with labs in Asia, also formed a strategic alliance. Chemizon, a division of Optomagic, participated in Crown Bioscience’s Series B round of financing, as part of the alliance (see story). Chemizon, headquartered in Longmont, CO, has labs in South Korea and Beijing. Chemizon is publicly traded in Korea, following a reverse merger with Optomagic. Crown Bioscience is based in Santa Clara, CA. It has labs in Beijing and Carmel, IN. Crown also has established a strategic alliance with Shanghai Tigermed Consulting, Inc., a clinical trial CRO dedicated to oncology.
Dr. Marc Cuzel, head of R&D for Sanofi-Aventis (NYSE:SNY), said that Sanofi would seek to establish half a dozen research partnerships with China universities and state-sponsored research institutions (see story). This initiative will take the place of building its own research center in China. Sanofi believes that China is a good place to do research, but it already has so much innovation, Sanofi believes partnerships are a better way of taking advantage of China’s research capabilities. Sanofi will seek research in cancer and rheumatoid arthritis, he said.
A number of China biomedical companies reported big increases in their 2007 financial results. China Sky One Medical (OTCPK:CSKI) said 2007 revenues were up 148% at $49.3 million. Net income was $15.3 million, or $1.15 per share, which produced a profit margin of 31% from its external use traditional Chinese Medicines business (see story).
Boehringer Ingelheim said its China subsidiary, Shanghai Pharmaceuticals, reported its 2007 revenues increased 46% to 697 million RMB ($95 million) (see story). BI China attributed the increase to its 2006 deal with state-owned Sinopharm, which has taken over the distribution duties for BI China. Over the next five years, BI China expects revenues to climb to 2.3 billion RMB ($327 million) in 2012.
Sinovac Biotech (NASDAQ:SVA) also had a good year. Its revenues were up a dramatic 118% to $33.5 million. Net income was $7.7 million or 19 cents per share as sales of the company’s hepatitis A and seasonal influenza vaccines soared (see story). Sinovac also announced the very good news that its vaccine for pandemic flu was approved by the SFDA (see story). Sales will be to a government stockpile, though the company did not say how many doses the government would order.
In other news, ProGenTech of Shanghai and Emeryville, CA raised $21 million in a Series C round, led by Bay City Capital of San Francisco and DT Capital of Shanghai (see story). To keep samples free of user contamination, ProGenTech is developing an automated nucleic acid purification system with a cassette-based technology. Established in 2005, ProGenTech launched its first product, the Entura, in Asia in November 2007.
And finally, Oculus Innovative Sciences (OCLS) announced SFDA approval of its Microcyn Technology for treatment of several acute and chronic wounds, including ulcers, cuts, contusions and burns (see story). Microcyn is a non-toxic, super-oxygenated form of water that is highly effective against bacteria, viruses, mold and spores.