Deals and Transactions

China National Biotechnology Group (CNBG) will raise as much as $2 billion in a Hong Kong IPO, an event that is expected to take place in the first half of next year (see story). China National Biotech is the largest biotechnology company in China, producing a long list of vaccines and blood products. Reportedly, the company will change its name to China Biotechnology Co. China Biotech is a subsidiary of SinoPharm Group.

WuXi PharmaTech (NYSE: WX) formed a $50 million corporate venture fund (see story). The company listed a number of objectives behind the initiative, one of which is to fund technologies that will increase WuXi’s service capabilities. The fund also hopes to help innovative scientists bring their breakthroughs to realization, and not surprisingly, WuXi expects to make money from the investments.

China Resources Medications Group (SHA: 600436) will form a $158 million joint venture with Zhangzhou Pientzehuang Pharma (see story). China Resources will own 51% of the entity, while Pientzehuang Pharma will be the minority partner. Pientzehuang will contribute eight drug products to the JV, which plans to build a pharmaceutical industrial park in Zhangzhou, Fujian province.

Kunming Pharma (SHA: 600422) will raise $110 million by issuing a secondary offering of 68 million shares (see story). The company will use the proceeds to increase its capacity, particularly small-volume injection products and a modern TCM facility. It will also increase its internationalization efforts. Thirty institutional buyers have already subscribed to the offering.

Yabao Pharma (SHA: 600351) announced a $74 million private placement (see story). The proceeds will be invested in a cGMP production facility, quality control systems for Safflower production, a production line for solid preparations and other projects. In February 2011, Yabao announced a $50 million collaboration with Frontage Labs of Pennsylvania to develop sustained release versions of more than 20 products.

Shanghai Fosun Pharma (SHA: 600196) purchased a 6.5% stake in Simcere Pharma (NYSE: SCR), paying $30.3 million to buy 3.48 million of Simcere’s ADRs in open market transactions (see story). In 2009-10, Fosun slowly amassed a 32% stake in Tongjitang Chinese Medicines and then helped take the company private.

Trials and Approvals

Sinovac Biotech (NSDQ: SVA) announced positive top-line results from a Phase II clinical trial of the company’s inactivated vaccine for human enterovirus 71 (EV71), which causes hand, foot and mouth disease (HFMD) (see story). The vaccine showed good immunogenicity and a favorable safety profile.

Jennerex, a San Francisco clinical-stage biotech focused on cancer therapies, released positive data on its novel treatment for liver cancer, JX-594. Lee’s Pharma of Hong Kong (HK: 8221) has in-licensed China rights to the drug, and will conduct the China portion of a global Phase III trial (see story). About 600,000 cases of hepatocellular carcinoma are diagnosed each year, of which 350,000 are in China. The US reports only 20,000 new cases every year.

Big Pharma in China

Sanofi (NYSE: SNY) reported its China revenues climbed 47% in Q3 to $370 million, a gain of $119 million (see story). About one-third of that rise can be attributed to Sanofi’s acquisition of BMP Sunstone, whose sales were running about $40 million per quarter when it was still an independent entity. The quarter puts Sanofi at an annual run rate of $1.5 billion for China revenues.

Government and Regulatory

Jianwen Wu, the former head of Shanghai Pharmaceutical Group (SHA: 601607), received a death sentence from a Shanghai court for accepting bribes, embezzling public funds and other charges of graft (see story). However, the sentence was suspended for two years, and most likely, Wu will see the sentence changed to life imprisonment if he exhibits good behavior over the next two years.

Disclosure: none.