Government Policy

China has earmarked 2 trillion RMB ($309 billion) for science and technology in its 2011-2015 Five-Year Plan (see story). Biotechnology – including biopharmacy, bio-engineering, bio-agriculture and biomanufacturing – will be a major priority, according to Yandong Liu, Chinese State Councilor and member of the Politburo. The goal of the funding is two-fold: to improve the quality of life in China and to add one million new jobs by 2015.

Deals and Financings

Jointown Pharmaceutical Group and 360buy.com expect to form a joint venture that will offer online sales of pharmaceuticals directly to consumers (see story). Jointown is the third largest distributor of drugs inside China, and 360buy.com is China’s largest e-commerce business. An insider said the JV will be funded with 10 million RMB ($1.5 million) in initial capital.

Wuhan Kindstar Diagnostics, a company that provides esoteric laboratory testing services to China hospitals, raised $11 million in a Series B round (see story). Established in 2003, Kindstar’s network covers 2000 hospitals in 300 China cities, including 660 tertiary care hospitals. The company, which has labs in Beijing, Shanghai and Wuhan, offers 750 advanced diagnostic tests in areas that include hematology, oncology, genetics, infectious diseases, and cardiovascular disease.

MediciNova (NSDQ: MNOV) (JSDQ: 4875) of San Diego has formed a JV with Zhejiang Medicine (SHA: 600216) that will be tasked with China commercialization of a MediciNova asthma drug, MN-221 (see story). The two companies signed a Letter of Intent regarding the JV in March. The plan is to move ahead quickly, as Zhejiang Medicine said it hoped to file an IND with the SFDA for the drug by year-end.

Harbin Gloria Pharma's (SHE: 002437) impending deal to acquire Heilongjiang Dilong Pharma has fallen apart (see story). Earlier this week, the two companies seemed ready to tie a knot, with only the price of the transaction remaining an issue. It didn’t help that a third company, as yet unnamed, joined the bidding process and apparently topped Gloria’s offer. Gloria was seeking to buy a 51% stake in Dilong.

Microbix Biosystems (TSX: MBX), a Canadian company specializing in influenza vaccine technology, has put its China joint venture on hold (see story). Three years ago, Microbix formed a flu vaccine JV with Hunan Biopharmaceutical, which planned to use Microbix’s technology to build Asia’s largest flu vaccine production facility. As the time to begin construction grew nearer, both sides wanted to amend the original contract. However, neither side would agree to the other’s changes. As a result, negotiations have stopped, and the future of the JV is in doubt.

China Licensing Deals

Boston Therapeutics has out-licensed the China rights for an OTC glucose control treatment to Advance Pharmaceutical Company of Hong Kong (see story). Boston Therapeutics claims that Sugardown™, a chewable tablet consisting of complex carbohydrates, slows down carbohydrate digestion and the subsequent rise of blood glucose. To gain China rights to Sugardown, Advance made an equity investment of unspecified size in Boston Therapeutics, which will use the money to support clinical trials of the product.

Company News

Walvax Biotechnology (SHE: 300142) has received board approval for a 727 million RMB ($112 million) building project (see story). The money will be used to finance construction of the third phase of the company’s production facility in Yunnan province. Walvax, a vaccine manufacturer, completed a very successful IPO on the ChiNext exchange in November 2010, raising $358 million.

Clinical Trials

Sinovac Biotech (NSDQ: SVA) of Beijing will begin a Phase II clinical trial of its proprietary inactivated EV71 vaccine against Hand, Foot and Mouth Disease (HFMD) (see story). The latest trial will seek to determine the optimal dosage level of the vaccine, which proved safe and provoked an effective immune response in its Phase I test. The Phase I trial was completed earlier this year.

Disclosure: none.