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The Week in Review: Chongqing Zhifei Bids for Dutch Vaccine Company
publication date: May 14, 2011
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author/source: Richard Daverman, PhD
Deals and Transactions
Chongqing Zhifei Biological Products (SHE: 300122) entered the auction for Bilthoven Biologicals, a Dutch company offering both vaccines and CMO services, bidding $93 million (see story). Bilthoven is a spinoff of the Netherlands Vaccine Institute. Bilthoven’s assets include sophisticated biological product equipment and several vaccine products.
Sinopharm Xinjiang Pharmaceutical will sell seven subsidiaries in Xinjiang province for one RMB each, a total seven RMB for the package (see story). The company is a subsidiary of China National Pharmaceutical Group (Sinopharm). The buyer will assume all the debt of the seven companies, an amount that was not specified. None of the seven companies are currently operating because of their high levels of debt.
Big Pharma in China
Sanofi (NYSE: SNY) expects China will become its second biggest market, after the US, within five years (see story). The company plans to exploit its consumer health business and vaccines to drive revenue growth, according to the company’s CEO, Mike Viehbacher. In a separate announcement, Sanofi Pasteur, Sanofi’s vaccines arm, announced the China launch of its 5-in-1 combination vaccine of childhood immunizations.
Government Policy
As expected, consolidation is the theme of the 12th Five-year Plan (2011-15) for China’s drug distribution sector. In the plan, the Ministry of Commerce encouraged more M&A to continue the rollup of pharma distribution companies (see story). The goal is to have, by the end of 2015, three national pharmaceutical distributors, each with annual revenues of at least 100 billion RMB ($15.4 billion). Underneath the top layer, the MoC wants to see the formation of 20 regional distributors with sales of more than 10 billion RMB ($1.5 billion).
Company News
WuXi PharmaTech (NYSE: WX), one of China’s most visible CRO/CMOs, reported first quarter revenues that were slightly better than expected, up 16% at $93.6 million (see story). The company’s lab service revenues increased 12%, but the star performer was contract manufacturing, which climbed 35% to $19.1 million. GAAP net income was up 17% at $18.2 million, or 24 cents per share.
SFDA Approvals
Simcere Pharma (NYSE: SCR) reported Shanghai Celgen Bio-Pharma, a company in which Simcere owns a 35% stake, was granted SFDA approval for Qiangke (see story). Qiangke is a Recombinant Human TNF Receptor-IgG Fusion Protein for Injection. Simcere says the drug is indicated for ankylosing spondylitis, a chronic inflammation of the spine that can restrict mobility. The drug is also used to treat other automimmune diseases as well.
Tianyin Pharma (AMEX: TPI) announced SFDA approval for a diabetes drug, Gliclazide Tablets (80 mg formulation) (see story). Gliclazide is an oral treatment for type 2 diabetes, administered when diet and exercise are not enough to control blood glucose. Patients take one or two tablets before eating to increase the production of insulin. Tinayin Pharma hopes to launch Gliclazide in July. The company did not issue any revenue projections for its newest product.
Distribution News
China Meheco Corp. (SHA: 600056) signed a two-year contract to provide 6.1 billion RMB ($939 million) of drugs to Venezuela (see story). The contract is the largest pharmaceutical supply deal that Venezuela has signed, and it also will boost China Meheco’s revenues by about 50% over its two-year life. Meheco reported operating revenue of 6.3 billion RMB ($964 million) in 2010, with profits of 195 million RMB ($30 million).
Naviscan of San Diego announced Chindex Medical Limited will be the China distributor for its breast-specific PET scanner (see story). The scanner uses PET technology to produce tomographic images that allow physicians to visualize and biopsy breast tumors as small as 1.3 mm, about the width of a grain of rice. Naviscan manufactures the world’s only commercially-available Positron Emission Mammography (PEM) scanner and PEM-guided biopsy system.
Disclosure: none.
Chongqing Zhifei Biological Products (SHE: 300122) entered the auction for Bilthoven Biologicals, a Dutch company offering both vaccines and CMO services, bidding $93 million (see story). Bilthoven is a spinoff of the Netherlands Vaccine Institute. Bilthoven’s assets include sophisticated biological product equipment and several vaccine products.
Sinopharm Xinjiang Pharmaceutical will sell seven subsidiaries in Xinjiang province for one RMB each, a total seven RMB for the package (see story). The company is a subsidiary of China National Pharmaceutical Group (Sinopharm). The buyer will assume all the debt of the seven companies, an amount that was not specified. None of the seven companies are currently operating because of their high levels of debt.
Big Pharma in China
Sanofi (NYSE: SNY) expects China will become its second biggest market, after the US, within five years (see story). The company plans to exploit its consumer health business and vaccines to drive revenue growth, according to the company’s CEO, Mike Viehbacher. In a separate announcement, Sanofi Pasteur, Sanofi’s vaccines arm, announced the China launch of its 5-in-1 combination vaccine of childhood immunizations.
Government Policy
As expected, consolidation is the theme of the 12th Five-year Plan (2011-15) for China’s drug distribution sector. In the plan, the Ministry of Commerce encouraged more M&A to continue the rollup of pharma distribution companies (see story). The goal is to have, by the end of 2015, three national pharmaceutical distributors, each with annual revenues of at least 100 billion RMB ($15.4 billion). Underneath the top layer, the MoC wants to see the formation of 20 regional distributors with sales of more than 10 billion RMB ($1.5 billion).
Company News
WuXi PharmaTech (NYSE: WX), one of China’s most visible CRO/CMOs, reported first quarter revenues that were slightly better than expected, up 16% at $93.6 million (see story). The company’s lab service revenues increased 12%, but the star performer was contract manufacturing, which climbed 35% to $19.1 million. GAAP net income was up 17% at $18.2 million, or 24 cents per share.
SFDA Approvals
Simcere Pharma (NYSE: SCR) reported Shanghai Celgen Bio-Pharma, a company in which Simcere owns a 35% stake, was granted SFDA approval for Qiangke (see story). Qiangke is a Recombinant Human TNF Receptor-IgG Fusion Protein for Injection. Simcere says the drug is indicated for ankylosing spondylitis, a chronic inflammation of the spine that can restrict mobility. The drug is also used to treat other automimmune diseases as well.
Tianyin Pharma (AMEX: TPI) announced SFDA approval for a diabetes drug, Gliclazide Tablets (80 mg formulation) (see story). Gliclazide is an oral treatment for type 2 diabetes, administered when diet and exercise are not enough to control blood glucose. Patients take one or two tablets before eating to increase the production of insulin. Tinayin Pharma hopes to launch Gliclazide in July. The company did not issue any revenue projections for its newest product.
Distribution News
China Meheco Corp. (SHA: 600056) signed a two-year contract to provide 6.1 billion RMB ($939 million) of drugs to Venezuela (see story). The contract is the largest pharmaceutical supply deal that Venezuela has signed, and it also will boost China Meheco’s revenues by about 50% over its two-year life. Meheco reported operating revenue of 6.3 billion RMB ($964 million) in 2010, with profits of 195 million RMB ($30 million).
Naviscan of San Diego announced Chindex Medical Limited will be the China distributor for its breast-specific PET scanner (see story). The scanner uses PET technology to produce tomographic images that allow physicians to visualize and biopsy breast tumors as small as 1.3 mm, about the width of a grain of rice. Naviscan manufactures the world’s only commercially-available Positron Emission Mammography (PEM) scanner and PEM-guided biopsy system.
Disclosure: none.
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