Two major changes, both long in development and both with far-reaching significance, have finally come to fruition in China biotech. They are the third revision to China’s patent laws and an 850 billion RMB ($123 billion) three-year plan to reform healthcare delivery in China. They show that China’s central government remains committed to creating a modern society that meets its citizens’ needs, even as it backs away from the capitalist model in healthcare.

After almost four years of work and three trial drafts, China has enacted the third major revision of its patent statutes and administrative rules, which were first instituted in 1984 (see story). Dr. Charles Liu of Unitalen Law discusses the changes that will be brought by the new law and the process involved to arrive at the final version. In our first installment of his review (there will be three in all), Dr. Liu discusses the topics Novelty and Inventiveness, Secrecy Check and Foreign Filing License, and Crossover of Invention and Utility Model.

China’s Central Committee also enacted a law implementing the first three-year phase of its comprehensive healthcare reform plan, a plan that authorizes an outlay of 850 billion RMB ($123 billion) (see story). One of the plan’s chief goals is to extend medical insurance to 90% of China’s 1.3 billion inhabitants by 2011. Other aims are to initiate a system of "basic medicines" covered by the insurance, an improved network of local-level clinics, a better public health system and improved services in public hospitals. By insuring people in rural districts, the plan would attack another major concern with China’s healthcare system: the huge disparity in healthcare delivery between urban and rural areas. As the country’s rural poor gain greater access to healthcare, China’s biopharma companies are reassessing their business plans to serve this new market.

There was more action in the deal sector last week. S*Bio Pte Ltd of Singapore announced its second drug development deal this month. S*Bio will sell a worldwide license to its early-stage leukemia drug, a multi-kinase inhibitor, to Tragara Pharmaceuticals of San Diego in a transaction valued at up to $112.5 million (see story). Two weeks ago, S*BIO optioned its JAK2 inhibitor program, including two drug candidates, to Onyx Pharmaceuticals (NSDQ: ONXX) for up to $550 million. In the latest deal, S*Bio will continue to perform the preclinical work on SB1317, for which Tragara will pay research fees. After that, Tragara will be responsible for all IND enabling, development and commercialization activities. 

SinoGenoMax Co. Ltd. of Beijing also reached a deal that was announced last week. The company will partner with Cogenics, a division of Clinical Data, Inc. (NSDQ: CLDA) to provide Cogenics’ clinical genotyping services in China (see story). According to Cogenics, the top 20 pharmaceutical companies in the US and Europe are clients. Cogenics’ services include pharmacogenomics discovery and validation as well as biomarker research and development. SinoGenoMax, incorporated in 1998, is headquartered in the Beijing Economic-Technological Development Area. It provides genotyping services for local and international universities, research institutes and pharmaceutical companies. 

Abbott Labs (NYSE: ABT) announced that it has opened an R&D facility in Singapore's Biopolis research park, the company’s first research lab in Southeast Asia (see story). The new lab will conduct stability studies, supporting regulatory requirements for new products around the world. The company said it would concentrate on drugs in the areas of neuroscience and cancer. In addition to having its regional headquarters in Singapore, Abbott is also building a nutritional manufacturing plant there. 

Product development news was robust last week. China Medical Technologies (NSDQ: CMED) (中国医疗技术公司) received approval from the SFDA for two new FISH probes: the Prenatal FISH Probe and Cervical Cancer FISH Probe (see story). The Prenatal FISH Probe is a detection kit for the analysis of trisomies 13, 18 and 21 (Down Syndrome) and sex chromosome aneusomies (X and Y). The Cervical Cancer FISH Probe seeks to detect the amplification of the TERC gene in human cervical tissue. China Medical paid $135 million to purchase its Fluorescent in situ Hybridization (FISH) technology in Q1 of 2007. Since then, the business has been coming on strong. In the most recent quarter, revenues from FISH products were $10.6 million, almost 25% of the company’s sales. 

China-Biotics (NSDQ: CHBT) received manufacturing certificates from the SFDA for several additions to its probiotic line of products (see story). These include Synbiotics Capsules, Probiotics Gegen Capsules, Probiotics Tremella Polysaccharide Capsules and Probiotics Chewable Tablets. Probiotics are live microbial food supplements designed to promote intestinal microbial balance. The new probiotics products are the result of an eight-month development process, conducted by the company’s in-house R&D team of more than 30 researchers and academic partners. 

3SBio (NSDQ: SSRX) (沈阳三生制药) has filed for SFDA approval of a biologic drug, recombinant human thrombopoietin, known as TPIAO, as a treatment of idiopathic thrombocytopenic purpura (ITP) (see story). TPIAO has been marketed since 2006 for treatment of chemotherapy-induced thrombocytopenia, or platelet deficiency. More than half of China’s 80,000 ITP patients do not respond to conventional steroid treatment, and TPIAO was more effective than steroids in this population. 3SBio currently has three drugs in front of the SFDA: in addition to TPIAO, the company has applied for approval of NuLeusin, a second generation IL-2 intended as a treatment for late-stage metastatic renal cell carcinoma, and High-Dose EPIAO.

In financial news, BMP Sunstone Company (NSDQ: BJGP) (美国美华太阳石集团公司) announced its full-year guidance for 2009, calling for a 36% increase in revenue to between $150 million and $160 million (see story). Non-GAAP net income is predicted to rise 70% to a range of $10 million to $13 million. For 2008, BMP Sunstone expects revenues will be $110 million to $120 million and non-GAAP net will be between $6 million and $7 million.

And finally, China Bio-Immunity Corporation (OTCBB: CHHB) had the unfortunate duty of announcing that it has begun a voluntary recall of its rabies vaccines, which are produced under the JGAD label (see story). In a routine test, the SFDA found the “possibility of a flaw” in one of its vaccines. At this point, no adverse reactions have been reported to the SFDA. Nevertheless, the SFDA has shut down the production lines of the company until an investigation of the problem is completed. Rabies vaccines provide over 90% of the company’s revenues.

Disclosure: none.