Deals, Products and New Trials Announced

In the last week, the news from the world of Chinese biopharma continues to focus on problems with safety. The New York Times ran a story of how difficult it is to track down offenders, because middle men obscure the origins of their materials. Their interests are not, according to the article, because they wish to hide substandard materials. Instead, these middlemen fear being cut out of the chain, so they don t want customers to know which company supplied the materials (see story, registration required). As a result, previous attempts to find the origins of substandard materials ran into a blank wall, and the materials were able to resurface years later, with deadly effects.

During the past week, the existence of fake blood protein products in hospitals and clinics was reported, while the Chinese government became proactive on safety by announcing measures that would deal with the problem, seeking through the new regulations to assure consumers that Chinese products are safe (see story).

Along the same lines, the SFDA ordered its local branches to carry out more inspections of local drug and health food producers. This was announced as part of a broader order that restricted the wording on health food advertisements and labels, forbidding any exaggeration of the product's effects. Health foods will not be able to imply that they have the ability to cure special diseases, or to use phrases such as highly effective, latest generation, or quick effect. They will be prevented from using vulgar or superstitious words in their names, and they can not be named after human organs.

In terms of deals, Charles River Labs (CRL) completed its previously announced arrangement with Shanghai BioExplorer (see story), a joint venture that will provide pre-clinical CRO services in China. China Shenghuo (KUN) made its IPO on the AMEX, floating a very small 2% of its shares outstanding, though the price action was very satisfying for insiders, because the shares doubled off the $3.50 IPO price to end the week at $7 each (see story). American Oriental Bioengineering (AOB) will pay up to $30 million to acquire Changchun Xinan Pharmaceutical Group, a privately held competitor in plant-based drugs (see story). And the Chinese private equity firm Legend appears poised to take over Shijiazhuang Pharma, an entity that is currently owned by the state (see story), though the deal has not yet been announced.

Mindray Medical (MR) received 510(k) clearance for two additional medical devices, bringing the total number of products it offers in the US to ten (see story). Since coming public, Mindray has been on a steadily upward course, and the latest announcement provides fuel to keep that rally moving. Finally, Sinovac (SVA) began testing its bird flu vaccine, a Phase II clinical trial that was announced earlier (see story).

Disclosure: none.