Biopharmaceuticals China News
Vol.1 Issue 1. 2010
Copyright Š CCM International Limited
Biopharmaceuticals China News Vol. 1 Issue 1. 2010
Publication date: 4 May, 2010
CONTENTS Investment Focus
1 Potential investment opportunity in China’s vaccine industry 2 Resources (holding) integrates Beijing Pharmaceutical Group
Govermental Policies
3 Updated Pricing Drug List by NDRC comes into force 3 Procurement and Distribution Rules of Essential Drugs to issue in 2010
Market Dynamics
4 5 7 7 9 9 10
Hualan’s net profit soars 229.10% in 2009 Huge potential in China’s diabetes treatment market China Securities Pharmaceutical Index hits record high Total output of Ceftriaxone Sodium hit a record high in 2009 Beijing OriGene won USD16 million venture capital Lilly’s Multi-Drug Resistant Tuberculosis Plan in China Hepalink ratified to be listed
Technology & New Product
11 Cephalosporin Oxazine Amidine produced by Baiyunshan Pharmaceutical obtains USP
News in Brief
12 12 12 12 12
Sanofi - Aventis builds research center in China Novartis (China) publicizes diabetes treatment breakthrough Fosun’s net profit up 91.3% in Q1 2010 Bayer Schering Pharma (China) upgrades Biopharmaceutical output value in Jiangsu to exceed USD73 billion in 2012
Welcome to the April issue of Biopharmaceuticals China News, specially published by CCM International. Despite of global financial crisis which resulted in negative effect on most industries in the world, China’s pharmaceutical industry witnessed sound development in 2009, thanks to implementation of nationwide Health Care Reform. Some biopharmaceutical enterprises achieved splendid performance in 2009, such as Hualan Biological Engineering Inc., the largest blood product and
vaccine producer in China, achieved net profit growth of USD89.1 million, up 229.40% year on year. In order to guide health and sustainable development of China’s pharmaceutical industry, Chinese government successively issued related policies, such as Pricing Drug List by National Development and Reform Commission, Procurement and Distribution Rules of Essential Drugs, etc. These policies are bound to facilitate the progress of pharmaceutical industry, especially biopharmaceutical industry. China’s pharmaceutical industry will continue its development momentum and boom in the following several years.
Biopharmaceuticals China News Vol. 1 Issue 1. 2010
Publication date: 4 May, 2010
Biopharmaceutical China News at a glance ■ The confidence bankruptcy toward China’s vaccine safety after a series of incidents broke out in recent months provided great potential investment opportunity for foreign pharmaceutical companies in China’s vaccine industry. ■ Cooperated with Beijing government, Recources(holding) integrated pharmaceutical asset of Beijing Pharmaceutical Group Co., Ltd. on Apr. 2nd, 2010. ■ The updated Pricing Drug List by Development and Reform Commission came into force on Apr. 1st , 2010. ■ Stipulations for Procurement and Distribution of Essential Drugs in China will be issued in 2010. ■ Hualan realized net profit growth of 229.40% in 2009, mainly aided by increased plasma dosage in blood products and rising demand for vaccine in Q3 2009. ■ Huge potential market exists in China’s diabetes treatment market as China has the largest numbers of diabetes patients throughout the world. ■ Aided by excellent performance of biopharmaceutical companies, China Securities Pharmaceutical Index, on Apr. 12th, 2010, hit record high, close to 6125.0. ■ Export quantity and price of Ceftriaxone Sodium has hit a record high since 2008, thanks to thriving clinical demand, improving of total CS output and intensifying the efforts on oversea markets exploitation. ■ On Mar. 17th, 2010, Beijing OriGene won USD16 million venture capital for its TrueMABTM project. ■ Cooperating with Zhejiang Hisun, Lilly started to implement its global MDR-TB plan in China on Mar. 23rd, 2010. ■ In Apr. 2010, Hepalink has been formally ratified to be listed by China Securities Regulatory Commission. ■ On Apr. 11th, 2010, Cephalosporin Oxazine Amidine developed by Baiyunshan Pharmaceutical successfully obtained USP.
Main companies mentioned in this issue
Biopharmaceuticals China News
Investment Focus Potential investment opportunity in China’s vaccine industry The confidence bankruptcy toward China’s vaccine safety after a series of incidents broke out in recent months provided great potential investment opportunity for foreign pharmaceutical companies in China’s vaccine industry. For instance, nearly 100 children in Shanxi Province died from the unqualified vaccine injected; another case is that unqualified vaccine produced by Jiangsu Ealong Biotech. Co., Ltd., the first vaccine producer in Jiangsu Province, flooded in Jiangsu’s vaccine market. These incidents result in the absence confidence of Chinese people towards homemade vaccine safety and governmental credibility, and quality assured vaccines are urgently needed in China. Thus, foreign pharmaceutical companies, with the advantage of superior technology, won the potential investment opportunities in China’s vaccine industry, such as exporting qualified vaccines to China, cooperating with domestic pharmaceutical producers by providing technology, etc. In the future, vaccine basics market which was monopolized by state-owned enterprises is likely to be co-shared by foreign pharmaceutical companies, such as some foreign pharmaceutical companies have invested into BCG vaccine and Polio vaccine which belong to catalogue of China’s immunization programs, according to the revised industrial Catalog Guiding Foreign Investment in 2007. Chinese government has allowed foreign pharmaceutical companies to co-invest with domestic vaccine producers in China’s vaccine industry. In Sep. 2009, Glaxo Smith Kline, the second largest pharmaceutical company in the world, cooperated with Jiangsu Watoson Biotechnology Ltd. which focuses on human vaccine R&D, production and sales in China, to have invested USD53.97 million in China’s children vaccine industry and established a joint venture in China, with Glaxo Smith Kline holding 65% stocks. According to the investment plan, the plant will manufacture measles-rubella-mumps combined vaccines, a kind of children vaccine, which fall into the catalogue of National Vaccination Program, as well as other children’s vaccine.
CCM International Limited
Vol. 1 Issue 1. 2010
In Nov. 2009, Novartis Pharmacy Ltd., the second largest flu vaccine producer in the world, also entered Chinese vaccine industry by expending USD124.63 million to purchase 85 % stocks of Zhejiang Tianyuan Bio Pharmaceutical Co., Ltd. (Tianyuan), the second largest flu vaccine supplier in China. ’ At present, China is the third largest pharmaceutical market in the world. In the future, Novartis will provide Tianyuan vaccine technology including technology of influenza vaccine, rabies vaccine, etc., for the purpose of Novartis’s vaccine production localization, and Novartis’s strategic target is to become a leader in the fast-growing vaccine industry in China.’ said Mr. Vasella, CEO of Novartis in Nov. 2009. The above-mentioned facts indicate that investment restriction for foreign pharmaceutical companies in China’s vaccine industry have been gradually relaxed, and policy barriers restraining foreign pharmaceutical companies to enter China’s vaccine industry will be eliminated step by step. Notes: Vaccine basics refer to vaccines supplied by Chinese government for free, including: 1.Vaccines belong to the catalogue of National Immunization Program. 2.Extra vaccines when provinces, autonomous regions and municipalities implement the National Immunization Program. 3.Vaccines used for emergent vaccination or mass preventive vaccination organized by government at or above the county level or relevant administrative department in charge of health.
Related Market Report this Month:
Future of Red Biotechnology in China A comprehensive industry report with 178 pages, please click the title to see the main content and sample pages. To purchase or need more details, please contact us at econtact@cnchemicals.com
1
www.cnchemicals.com
Biopharmaceuticals China News
Vol. 1 Issue 1. 2010
Resources (holding) integrates Beijing Pharmaceutical Group On Apr. 2nd, 2010, cooperated with the Beijing government, China Resources (holding) Co., Ltd. Resources(holding), one of the leading conglomerates in Hong Kong and Chinese Mainland, integrated pharmaceutical assets of Beijing Pharmaceutical Group Co., Ltd.( Beijing Pharmaceutical Group) (PICTURE 1).
Resources Medications’s target of this integration is to set up platform for pharmaceutical enterprises under direct jurisdiction of central government. And after this asset reorganization, Beijing Pharmaceutical Group will get listed in overall. Resources Medications will form a complete industry chain of pharmaceutical industry covering Chinese medicine, chemical medicine, biopharmaceutical, medical equipment and pharmaceutical business, which will largely heighten its position in pharmaceutical industry. Resources Medications has achieved total revenue of USD4.94 billion in 2009, and become the second largest pharmaceutical company in China.
The integration will be implemented by China Resources Medications Group Co., Ltd. (Resources Medications), a subsidiary of Resources (holding). After the integration, Beijing government will hold 30% stocks of the integrated company, and Resources (holding) will relocate the headquarter of Resources Medications, used to be in Shenzhen, to Beijing. Resources (holding) and Beijing government signed a strategic cooperation framework agreement regarding pharmaceutical and microelectronics sectors. According to this agreement, Resources (holding)’s investment into pharmaceutical industry in Beijing will be encouraged and supported by Beijing government, such as enjoying reduction and exemption of taxes, financial assistance, etc., and Beijing government will also facilitate Resources (holding)’s integration of biopharmaceutical resources in order to found a leading pharmaceutical enterprise in Beijing. Through cooperation with Resources (holding), Beijing government will further promote the development of pharmaceutical industry.” said Mr. Guo Jinlong, Mayor of Beijing on the signing ceremony.
Resources Medications is a wholly-owned subsidiary of Resources (holding), engaged in Resources (holding)’s domestic pharmaceutical business, with total assets of around USD3.81 billion and turnover of USD3.96 billion in 2009. Beijing Pharmaceutical Group, with total turnover of USD3.9 billion in 2009, is a whollyowned company of Beijing government. It has about 20 subsidiaries, among which Wandong Medical Equipment and Beijing Double-Crane Pharmaceutical are listed in Shanghai and Shenzhen Stock Exchange.
PICTURE 1: Signing ceremony of Beijing government and Resources (holding)
Source: http://info.crc.com.cn/internet/news/xwfbny/201004/ t20100403_111966.htm
CCM International Limited
2
www.cnchemicals.com
Biopharmaceuticals China News
Vol. 1 Issue 1. 2010
Govermental Policies
referential price. That is to say, in the reimbursement of drugs, the price of prescription drugs was constituted by the National Development and Reform Commission, and drugs with government referential price were referred to retail price by local government, according to actual local condition. To OTC drugs, local government constitute retail price, according to actual local condition.
Updated Pricing Drug List by NDRC comes into force
The updated Pricing Drug List by National Development and Reform Commission NDRC came into force on Apr. 1st, 2010, indicating that Chinese government will further strengthen management and supervision of prescription drugs prices and decentralize more pricing power to local government, in order to achieve standardization in drugs market and rational pricing authority division.
Procurement and Distribution Rules of Essential Drugs to issue in 2010
According to the new List, all prescription drugs in the Socialized Medicine Catalog published in 2009 and all national essential drugs are added into Pricing Drug List. Besides, prices of narcotic drugs and psychotropic substances in Pricing Drug List are guided by with the highest ex-factory price and their highest retail price, instead of government referential price in previous time.
On Apr. 8th, 2010, the forum on how to actively manage the procurement and distribution of essential drugs after the issuance of National Basic Medicine System was held in Beijing, in which rule for procurement and distribution of essential drugs in China to be issued in 2010 was informed, indicating that as some relative policies and stipulations perfect, production and supply of basic drugs will be more reasonable and scientific under governmental management.
Under the background of publishment of On Establishment of Implementation Advices of National Essential Drugs System in Aug. 2009, NDRC upgrades the Pricing Drug List issued in 2005. The new List will exert influence on drug pricing, market behavior, etc. of related pharmaceutical enterprises. Some experts air their own opinions on this upgraded List.
According to Mr. Zheng, Director of Department of Essential Drug of the Ministry of Health, by the end of Feb. 2010, there have been about 30% primary care institutions implementing National Basic Medicine System, and the proportion is expected to climb to more than 60% in 2010. During the implementation of National Basic Medicine System for about one year, various defects like skimble - scamble price of drugs, commercial bribe, etc., have been exposed. Thus, it is necessary and urgent to constitute a unified standard for procurement and distribution of essential drugs
“Though main prescription drugs with patent protection belong to multinational companies, their patent protection will have expired one after another by 2013, which will leave great development opportunity for domestic prescription drugs producers. Thus, in order to effectively guide China’s pharmaceutical industry’s health development, NDRC upgrades Pricing Drug List.” disclosed by a director from a multinational enterprise in Shanghai. “In the light of this policy, there are 556 kinds of over-thecounter drugs priced by provinces, autonomous regions and municipalities pricing departments, implying that Chinese government will decentralize more pricing power to local government.” disclosed by an insider in Apr. 2010.
Regarding how to effectively implement the rule, some experts air their views on this forum. Mr. Liao, Deputy Director of Health Department of Sichuan Province, said, “In poor regions like Sichuan Province, government should permit relevant qualified companies to participate in distribution, in order to ensure availability of essential drugs.”
Wangming, Manager of Guangzhou Pharmaceutical Holdings Ltd. said “After the updated Pricing Drug List came into force, pharmaceutical companies may show more concern on how to win a preponderant price in the process of drug tender. “ Note: The Pricing Drug List issued in 2005 by National Development and Reform Commission showed that the pricing drugs were divided into following two categories: part of drugs are priced by the government; the rest are guided by government
CCM International Limited
3
www.cnchemicals.com
Biopharmaceuticals China News
Vol. 1 Issue 1. 2010
Mr. Niu Zhengqian, Deputy Secretary of Chinese Medicine Entrepreneur Association, viewed “We should take market mechanism into full play; and let hospitals, manufacturers and distribution companies be engaged in free competition; only by this way can the rule of procurement and distribution of essential drugs take greater effect and bring more benefits.”. “After the National Basic Medicine System has been implemented, government should constitute a national unified standard for procurement and distribution of essential drugs, in order to avoid the commercial bribe in the tender process.” said Li Zhenjiang, Chairman of Shineway Pharmaceutical Group, the largest manufacturer of modern Chinese medicine injections, soft capsules and granules. Regarding how to carry out this rule, CCM also put forward some suggestions. Firstly, there should be a complete, objective and fair standard system for drugs tender; secondly, government should establish reasonable entrance thresholds for pharmaceutical industry in order to guarantee drugs quality; thirdly, as for pricing, combination of market mechanism and governmental supervision should be made in the whole tender process and enterprises should be given more rights, such as how to distribute drugs, etc.
Market Dynamics Hualan’s net profit soars 229.10% in 2009 According to annual report for fiscal year 2009 on Mar. 9th, 2009, Hualan Biological Engineering Inc. (Hualan), the largest blood product and vaccine producer in China with capacity of 1,500t/a for plasma processing and 29.74 million doses per year for vaccine, achieved net profit growth of 229.40%, thanks to significantly increased plasma dosage in blood products, and rising demand for vaccine in Q3 2009.
doses vaccine for national H1N1 storage task, among which 29.46 million have been shipped to the locations designated by government, and the rest will be released before the end of this year. In the future, it will accelerate the process of overseas registration for H1N1 bacteria and seasonal influenza vaccines so as to further enhance its vaccine business (TABLE 1). Development of blood products business also contributed to the net profit growth. The company achieved revenue of USD74.19 million from blood products, with gross profit rate of 63.63% in 2009, respectively up 26.09% and 4.88% against 2008. Revenues from human albumin, intravenous immunoglobulin (IVIG) and other blood
TABLE 1: Hualan’s business situation, 2008 & 2009 Though under the context of global financial crisis, Hualan still made considerable achievements in 2009. . The achievement firstly sourced from vaccine, which was needed with large numbers when influenza suddenly happened in Q3 2009. Revenue from vaccine realized USD104.52 million in 2009, up 887.84% over 2008. Besides, the company is responsible for 52.25 million
CCM International Limited
2009
Item
Value, million USD
2008 Value, million USD
Up YOY, %
Up YOY, %
Revenue
178.00
160.39
68.00
48.25
Net profit
89.00
229.40
27.00
70.35
Source: Annual report of Hualan in 2009
4
www.cnchemicals.com
Biopharmaceuticals China News
products reached USD38.56 million, USD21.11 million, USD14.51 million, up 15.53%, 10.74% and 127.27% separately over 2008. Taking the rising market demand for IVIG into consideration, the National Development and Reform Commission raised IVIG price, thus revenue from IVIG increased, and revenue proportion of human serum albumin declined accordingly in blood products. This structure optimization is helpful for improvement of plasma utilization rate and gross profit rate of blood products (FIGURE 1). Hualan is estimated to get sound development in 2010, as a series of vaccines such as seasonal influenza vaccine, hansenula hepatitis B vaccine, etc. will be put into market this year. Additionally, aided by the increased plasma dosage, couple with the price increase of IVIG from USD60.41/dose to USD87.97/dose in Shanghai, which is also likely to increase in other regions of China, the company’s net profit is estimated to rise by 30%~50% year on year. The company’s much better performance in stock market is a strong proof for its fastest development in recent years.
Vol. 1 Issue 1. 2010
FIGURE 1: Hualan’s stock performance, Jan. 2006 ~ Apr. 2010
�
Source: google finance Note: SCI refers to Shanghai Composite Index
Huge potential in China’s diabetes treatment market China, with more than 92 million adult diabetes and about 150 million potential diabetes, has the largest numbers of diabetes patients in the world, according to New England Journal of Medicine in Mar. 2010, in which new medical research findings, review articles, and editorial opinion on a wide variety of topics of importance to biomedical science and clinical practice are published. Besides, total direct medical expenditure of diabetes (male and female diabetes patients with age of over 20 in China) and its complications has reached USD2.8 billion and it will witness uptrend in the future, disclosed in the High Blood Sugar Diabetes Forum sponsored by USA Abbott Laboratories in Apr. 2010.
diabetes market, Novo Nordisk, the largest human insulin producer in the world, input USD381 million to establish the world’s largest insulin preparation and bottling plant in China at the end of 2008, which is the largest investment for the company after its foundation for 80 years. At present, Novo Nordisk seizes above 60% market share of human insulin in China. Another case is Sanofi-Aventis, a diversified healthcare company in the world. To further enlarge its market share in China, it announced in Apr. 2009 that it would invest USD87.9 million to expand its Lantus pre-filling production line in its insulin factory in Beijing Economic and Technological Development Zone, which is expected to be launched in 2012. By then the company’s Lantus capacity will reach 50 million units per year.
This shows that huge potential exists in China’s diabetes treatment market. Some multinational pharmaceutical enterprises, like Novo Nordisk, Eli Lilly and Sanofi-Avetis have captured about 90% market share of China’s diabetes treatment market of top first class hospitals. And they have enlarged or will enlarge their investments in this field in China. For instance, in order to consolidate its leadership in China’s
CCM International Limited
At present, domestic approved antidiabetic drugs mainly refer to insulin secretion (glinides and sulphonylurea), non-insulin secretion (biguanides, α-glucosidase inhibitor and glitazones) and human insulin. What is the situation of prescription status of patients with diabetes in main hospitals of China’s medium and
5
www.cnchemicals.com
Biopharmaceuticals China News
Vol. 1 Issue 1. 2010
large cities? (FIGURE 2)
Medicines. However, in the class of α-glucosidase inhibitor, Acarbose produced by Germany Bayer Group captures about 30% prescription share, aided by its being under patent protection status and successful promotion in diabetes treatment field.
In the light of a market research study, surveying diabetes prescription status in main hospitals of China’s medium and large cities with 4500 prescriptions of patients with diabetes by Cegedim Strategic Data, a leading market research company dedicated to the healthcare industry, in Mar. 2010, in the field of oral drugs treating diabetes, the class of Biguanide, accounting for 37.6% prescription share, is still the most widely used antidiabetic drug for diabetes treatment, and recommended as first-line drug for diabetes treatment and listed in Catalogue of National Basic
In the field of injective drugs treating diabetes, human insulin occupies about 38.6% prescription share. Key products of Novolin 30R of Novo Nordisk in Demark takes up 12.3% prescription share.
FIGURE 2: Structure of prescription share by different classes and brands of diabetes drugs in 2009 Biguanide
α-glucosidase inhibitor Sulphonylurea
Others 4.90%
Others 1.10%
Premix human insulin
Others 8.10% Glimepiride 4.50%
Metformin 22.50%
Glinides
Intermediate-efficacy human insulin Others 5.80%
Acarbose Diamicron 29.40% 8.30% Glitazones
Longacting human Humulin70/30 insulin 6.10%
Short-acting human insulin Glinides and Biguanides
Others1.50%
Glipizide Others Repaglinide Metformin Others 9.30% Others Novolin 30R Others 2.40% 7.50% Hydrochloride 6.10% 1.50% 12.30% 0.40% 10.20% Kaboping Gliquidone Avandia Novolin R Novolin N Lantus Nateglinide 4.10% Avandamet 3.80% 4.10% 3.50% 3.30% 2.90% 3.40% 0.20%
Distribution of prescription share 12.4%
37.6%
34.6%
33.7%
10.2%
0.2%
6.4%
4.8%
24.1%
3.3%
s
Source: Cegedim Strategic Data
CCM International Limited
6
www.cnchemicals.com
Biopharmaceuticals China News
Vol. 1 Issue 1. 2010
China Securities Pharmaceutical Index hits record high Aided by excellent performance of biopharmaceutical companies, China Securities Pharmaceutical Index (CSPI, 399933) has been performing strongly since early 2010, and hit record high of 6125.0 on Apr. 12th, 2010.
Figure: CSPI and SSECI performance, Jan. 2009 ~ Apr. 2010
As of Apr. 7th, 2010, 88 BC have released their fiscal 2009 annual reports in succession, and achieved total net profit of USD231.95 million, up 67.58% compared with 2008, mainly thanks to sound development and promising prosperity in this industry, reform of Health Care system, issuance of the Catalog of National Basic Drugs, reorganized assets of BC, etc. It is aided by the excellent performance of biopharmaceutical companies that CSPI has become the strongest securities industry index in China. On Apr. 12th, Shanghai Stock Exchange Composite Index (SSECI) performed downtrend, while CSPI hit the historically high level and closed at points of 6125.0. As of that day, CSPI has continuously advanced for 11 market days, reflecting the promising prosperity in this industry (FIGURE 3). When CSPI reached record high, many pharmaceutical stocks’ price also jumped to a new high point. Apart from the pharmaceutical stocks listed this year, 45 pharmaceutical stocks have hit record high since early 2010, accounting for 32.85% of the total comparable stocks. And 12 pharmaceutical stocks have achieved the highest since Apr. 2010, such as Shanghai RAAS, Jiangsu Yuyue, Pkucare Southwest Pharmaceuticals, etc. Eyeing this excellent performance of BC, institutional investors significantly increased their BC stocks. As of Q4 2009, their total BC stocks reached 3.20 billion shares, up 70.6% over that as of Q3 2009, indicating their optimism towards biopharmaceutical industry. Notes: CSPI is an index to reflect the overall performance of biopharmaceutical stocks in Shanghai and Shenzhen stock markets, which is indexed with all biopharmaceutical shares by China Securities Index Co., Ltd., a professional company specializing in creation and management of indices and index-related services.
CCM International Limited
Source: Baidu Finance
Total output of Ceftriaxone Sodium hit a record high in 2009 Total output of Ceftriaxone Sodium, the third generation cephalosporin and a broad-spectrum cephalosporin with a long plasma elimination half-life of approximately 8 hours in normal adults, hit a record high in 2009 reaching 3768 tonnes in 2009, up 29% year on year, thanks to thriving clinical demand, significantly increasing number of producers of Ceftriaxone Sodium and their efforts to intensify exploitation of overseas market. Besides, the export price of Ceftriaxone Sodium reached USD127.3/kg in Feb. 2010, up 35.8% compared with that in May. 2009. Clinical demand of Ceftriaxone Sodium is growing steadily along with the development of primary care. According to a report issued by China Association of Pharmaceutical Commerce (CAPC) in Apr. 2010, the expenditure of Ceftriaxone Sodium in hospitals of 22 major cities in China was USD39 million, up 35.1% compared with that in 2007, and its market share has achieved 42% in China’s cephalosporin market in 2009, up 11.5% compared with that in 2004. Besides, as to the annual growth rate over the past few years, only Ceftriaxone Sodium has achieved 106% compared with other cephalosporins like Cefazolin Sodium, Cefotaxime Sodium, Cefoperazone Sodium, Cefurozime Sodium. As an act of the reform of health-care in 2009, Chinese government will invest USD124.6 billion to improve primary care over the next three years. Therefore, it is expected that the clinical demand of Ceftriaxone Sodium will continue this uptrend in the future.
7
www.cnchemicals.com
Biopharmaceuticals China News
Vol. 1 Issue 1. 2010
In the past few years, total number of Ceftriaxone Sodium producers significantly increased. According to a report issued by CAPC in Apr. 2010, the number of total producers of Ceftriaxone Sodium was 3 in the early stage but reached 36 at end of 2009. Meanwhile, main producers like Shanxi Weiqida Pharmaceutical Co., Ltd., Shanghai Asia Pioneer Pharmaceutical Co., Ltd., etc., captured about 80% total capacity of Ceftriaxone Sodium in China.
a total value of USD236 million to Russia and Belarus, whose cephalosporin production technology lags behind (FIGURE 4). However, there are some uncertainties for Ceftriaxone Sodium exports in the future. In Oct. 2008, the Ministry of Commerce and Industry of India formally determined that the export of Ceftriaxone Sodium to India from China was dumping, and the Indian government levied 108%~120% anti-dumping duties on Ceftriaxone Sodium imported from China. Thus, many Chinese Ceftriaxone Sodium exporters are forced to withdraw form Indian market. Besides, some member countries in European Commission like Italy and Spain begin to investigate the dumping cases of Chinese Ceftriaxone Sodium, disclosed by some insiders in China.
Ceftriaxone Sodium producers have been intensifying exploitation of overseas market. In the past few years, the export of Ceftriaxone Sodium has been amounted to 30%~40% of its total capacity, which achieved 899 tonnes in 2009, up 14.1% year on year. India, South Korea, Europe, and Southeast Asia are the major export destinations. Since 2007, Ceftriaxone Sodium producers has exported cephalosporin including Ceftriaxone Sodium, cefoperazone, etc., achieving
FIGURE 4: Export volume and export growth rate of Ceftriaxone Sodium, 2007~2009 1,000
899
900 800 700
19.33% 658
788 19.76%
tonne
600
20.00%
14.09%
500
25.00%
400
15.00% 10.00%
300 200
5.00%
100 -
0.00% 2007
2008 Export Quantity
2009 Export Grow th Rate
Source: China Customs
CCM International Limited
8
www.cnchemicals.com
Biopharmaceuticals China News
Beijing OriGene won USD16 million venture capital On Mar. 17th, 2010, Beijing OriGene Technologies, Inc.(Beijing OriGene) announced it has won USD16 million Series B venture capital from IDGAccel, SBI & TH Venture Capital Management Co., Ltd., and Zero2IPO Capital, and its previous investors, Morningside Venture Investments and President International Development Corp. also participated. The venture capital will be mainly used to continuously build the largest collection of next generation monoclonal antibodies (TrueMABTM) covering the majority of human proteome in the world.
Vol. 1 Issue 1. 2010
Beijing OriGene Technologies, Inc. is a gene centric life sciences tool company dedicated to support academic, pharmaceutical and biotech companies in their research of gene functions and drug discovery. OriGene’s novel product line includes the world’s largest cDNA and shRNA clone collection, over 5,000 purified human proteins, high quality monoclonal antibodies, 100,000 highly validated human tissues, and Lumines Multiplex Assay products. OriGene also provides a broad range of antibody validation products including genome-wide tagged antigen standards and extensive IHC slides derived from the company’s tissue collection.
“This capital will facilitate the accomplishment of building the largest monoclonal antibody collection in the world covering the entire human genome of approximately 20,000 genes.” said Mr. He, Beijing OriGene’s Chairman and CEO.
Lilly’s Multi-Drug Resistant Tuberculosis Plan in China
Beijing OriGene has dedicated to build the largest collection of human full-length cDNA clones since last decade. The project will be developed with the most up-to-date antibody technologies and will be using authentic human full-length proteins as immunogens during the manufacturering process.
Cooperating with Zhejiang Hisun Pharmaceutical Co., Ltd. (Zhejiang Hisun), a well-known anti-infection pharmaceutical enterprise in China, Eli Lilly Company (Lilly) in the US, a global R&D-based pharmaceutical company, started to implement its global multi-drug resistant tuberculosis plan (MDR-TB) in China on Mar. 23rd, 2010.
TrueMABTM monoclonal antibodies are currently available in the market and will be utilized by commercial partners for various applications like flow cytometry and Multiples enzyme-linked immunosorbent assays. It was estimated by some insiders that as of 2020, there will be about 3,000 kinds of new drugs produced by biopharmaceutical technology, and gross output value of drugs produced by biotechnology will reach USD396 billion, disclosed by Liu Yanhua, Undersecretary of Ministry of Science and Technology in Jun. 2007. Therefore, the promising prospect of biopharmaceutical industry attracts venture investors’ capital.
This MDR-TB project exists to save lives by preventing and treating MDR-TB – a terrible disease that afflicts millions of people in some poor regions throughout the world. According to Mr. Lai, Lilly’s CEO in China, Lily has cooperated with Zhejiang Hisun by transferring technology of capreomycin for free, training relevant technicians, as well as proving ample funds, besides, in order to effectively control the spread of MDR-TB, the company will also carry out a series of health education, such as training medical personnel, popularizing prevention knowledge, etc.
According to statistic from Zero2IPO, an information and consultation for venture capital (VC) and private equity (PE), in 2009, there were total 49 cases of VC and PE to have been invested in the pharmaceutical industry with total investment of USD320 million, among which 31 cases are invested into development and expansion of pharmaceutical companies. “It is estimated that in 2010, investors of VC and PE will be further active in pharmaceutical industry.” said Zhengyufen, senior project manager of medical health department in Zero2IPO.
Lily has successfully transferred a series of production technology of capreomycin to Hisun till now, and Hisun has launched capreomycin production line for this project with total capacity of 5 million doses/year. By far, Lilly has invested USD135 million for this MDRTB project. In Jan. 2010, contributed by this project, Lilly won “2009 Multinational Corporations in China Contribution Award “. “This award future indicates the longterm commitment for preventing and treating tuberculosis in China, especially for MDR-TB,” said Mr. Eric Baclet, Regional CEO of Lilly in China in Jan. 2010. MDR-TB prevention and treatment is austere in China. According to a report issued by Chinese Ministry of Health,
Note:
CCM International Limited
9
www.cnchemicals.com
Biopharmaceuticals China News
Vol. 1 Issue 1. 2010
there were about 4.5 million patients with active tuberculosis in China as of Mar. 2009, 80% of which were in rural areas. Besides, according to a WHO research in 2006, about 130,000 new MDR-TB patients increase annually in China, accounting for 28% of the world’s total newly MDR-TB patients. At the same time, high treatment expenditure for MDR-TB, usually 100 times higher than that for normal tuberculosis, also restricts patients’ treatment. Great concern for treatment of MDR-TB has been shown in China, where symptoms suspicious of tuberculosis are checked, and a unified free treatment for free program for patients diagnosed is also provided. During the year 2001 to 2008, there were 642,000 MDR-TB patients healed. Capreomycin is mainly applied for mycobacterium-caused tuberculosis patients who aren’t healed with first-line anti-drugs such as streptomycin, isoniazid, rifampicin and ethambuto, etc., and for the patients who are not applicable to the above mentioned firstline anti-drugs, attributed to toxicity or bacteria resistance. It will be acquired bacterial resistance when used separately, thus only with combination of antibacterial drugs can it cure TB.
Hepalink ratified to be listed In Apr. 2010, Shenzhen Hepalink Pharmaceutical Co., Ltd. (Hepalink), the biggest supplier of heparins sodium’s Active Pharmaceutical Ingredients API in the world, has been formally ratified to be listed in Shenzhen Stock Exchange by China Securities Regulatory commission. The company will issue 40.1 million stocks, with about USD21.7 per share, to raise about USD869.5 million, among which about USD70.8 million will be used for its new heparins sodium’s API production lines with capacity of 830t/a, and about USD56.2 million will be used as floating capital of this project. The products of this new production line are in accordance with authentication standards of U.S. Food and Drug Administration (FDA) and Certificate of Suitability for European Pharmacopeia (CEP). Hepalink has been developing rapidly since 2007. In 2009, its revenue and net profit reached USD32.8 million and USD11.9 million, respectively up 411.2% and 387.8% year on year. Its revenue and net profit respectively realized a CAGR of 172.6% and 244.5% from 2007 to 2009. The company’s rapid achievement is mainly thanks to its technical
superiority in R&D and production. At present, it has become the largest heparins sodium’s API production and sale enterprise in the world. According to statistics from China Customs in 2009, Jan. 2009 ~ Sep. 2009, Hepalink’s export value reached USD175.8 million, accounting for 39.5% of national total export value of this product. Currently, supply of heparins sodium’s API falls short of demand and inadequate capacity has become the bottleneck for its further development in future. The launch of this new production line will effectively solve this problem, disclosed by insider in Apr. 2010. After it is listed in Shengzhen Stock Exchange, stock holder of the company will benefit a lot. Lili and Litan couple, Hepalink’s facto controller holding 288.0 million Hepalink’s stock shares, will become the richest person in Chinese mainland valuing USD6.3 billion. And stock value of Goldman Sachs, a full-service global investment banking and securities firm, who invested USD 4.9 million to Hepalink in 2007, and holding 12.5% stocks of the company, will reach USD966.2 million, 93 times of its initial investment. According to Hapalin’s Prospectus issued in Apr. 2010, it is estimated that as of 2010, demand for heparins sodium’s API will reach 6142 tonnes, achieving a CAGR of 10.2% year on year. However, Hepalink may also face some uncertainties in future. Its profit margin will decline in the future, since the production cost of raw material of heparins sodium’s API, which accounts for 85% production cost, may increase in the future, while heparins sodium’s API price will decline due to the expanded capacity of other companies in recent years (TABLE 2).
TABLE 2: Hepalink’s heparins sodium’s API export value, Jan. 2006~Sep. 2009 Year Jan. 2009~Sep. 2009
Total export value (million USD)
Hepalink’s export value (million USD)
Market share (%)
444.2
175.8
39.5
2008
226.1
63.5
28.1
2007
137.5
27.6
20.1
2006
103.3
29.4
28.5
Market share=Hepalin’s export value/total export value Source: Hapalin’s Prospectus issued in Apr. 2010
CCM International Limited
10
www.cnchemicals.com
Biopharmaceuticals China News
Technology & New Product Cephalosporin Oxazine Amidine produced by Baiyunshan Pharmaceutical obtains USP On Apr. 11th, 2010, Cephalosporin Oxazine Amidine developed by Guangzhou Baiyunshan Pharmaceutical Co., Ltd.( Baiyunshan Pharmaceutical) successfully achieved the US Patent(USP), and Baiyunshan Pharmaceutical will cooperate with the South China Center for Innovative Pharmaceutical, a nonbusiness scientific organization engaged in new pharmaceuticals creation and public services, to develop this new drug, revealed Mr. Chen, General Manager of Guangzhou Baiyunshan Pharmaceutical Co., Ltd. (000522, one of the leading pharmaceutical manufacturer in Guangdong Province). The newly developed drug enjoys good antibacterial activity to gram-positive bacteria. Mr. Zhu, Deputy Director of Baiyunshan Pharmaceutical, said ”Cephalosporin Oxazine Amidine has an entirely new chemical structure which is obtained through molecular modification of cefathiamidine, and has shorter half-life and less toxicity than cefathiamidine, thus it enjoys good application prospect.”
Vol. 1 Issue 1. 2010
of Cephalosporin Oxazine Amidine can further enhance the company’s hi-tech innovation capability, which is in accordance with its strategy – patent first, distribution follows in overseas market. Through this way, Baiyunshan Pharmaceutical’s COA will participate in international competition.” With accession to WTO, Chinese government has issued a series of policies such as Measures for the Administration of Drug Registration, to support R&D of new drugs with independent intellectual property rights. Mr. Liu Xuebin, one of the key researchers for Cephalosporin Oxazine Amidine, said ”Aided by relative supporting policies of government, pharmaceutical companies have changed the disjunction of drugs R&D and market demand, and have been taking more important role in innovation of new drugs as they are fully informed of market demand. ” Mr. Chen also showed his confidence in the market prospect of this new drug. According to statistics from Chinese Pharmaceutical Association, national organization of pharmaceutical professionals, total consumers of cephalosporin in 22 major cities in China have reached USD101.5 million in 2008, up 27.0% compared with 2007. Besides, exemplified by cefathiamidine, with sales revenue of USD44.0 million in 2009, coupled with rich experience for promotion of products, Cephalosporin Oxazine Amidine is bound to win good prosperous market in the future.
Baiyunshan Pharmaceutical has been always attaching great importance to independent R&D of drugs. Mr. Chen also viewed ”Independent intellectual property can strengthen company’s core-competitiveness, especially for pharmaceutical companies. Thus, the achievement of obtaining USP
CCM International Limited
11
www.cnchemicals.com
Biopharmaceuticals China News
Vol. 1 Issue 1. 2010
News in Brief Sanofi - Aventis builds research center in China
Bayer Schering Pharma (China) upgrades
On April 6th, Sanofi - Aventis Group (Sanofi - Aventis), the largest drug manufacturer in Europe, announced that it would set up its R & D centers of Asia Pacific in China to accelerate the development of drugs and therapies innovation. The R&D will radiate regions including Japan, Russia and India.
Since this year, Bayer Schering Pharma (China) upgraded to be a separate district and reported directly to headquarters. It will invest USD132.92 million to global R & D center in Beijing in next 5 years and launch four new varieties to speed up the exploitation of Chinese market. It achieved USD704.53 million sales revenue last year, up by 28% year on year.
Novartis (China) publicizes diabetes treatment breakthrough On April 21st, Novartis (China) and the Ministry of Health joined hands to issue the largest diabetes treatment breakthrough on "Second Sino-US high-level exchange of Cardiovascular Summit" held in Shanghai. The breakthrough of NAVIGATOR attract great concern from cardiovascular experts, since it showed that RAS inhibitors Valsartan can effectively prevent diabetes occurrence for pre-diabetes.
Fosun’s net profit up 91.3% in Q1 2010
Biopharmaceutical output value in Jiangsu to exceed USD73 billion in 2012 Recently, Science and Technology Department of Jiangsu Province published Development Plan of New Biotechnology and Pharmaceutical Industry in Jiangsu Province (2009 ~ 2012). The plan shows that Biopharmaceutical output value in Jiangsu will exceed USD73 billion in 2012 compared with USD29 billion currently and it will push Jiangsu to be the most active area of new biotechnology and pharmaceutical industry all over the world.
On April 29th, Fosun Pharmaceutical (Fosun) announced its first Quarter Report in 2010, according to which its revenue increased by 27.34% and net profit by 91.3% aided by excellent performance of key pharmaceutical business, and benefit from stock transfer.
CCM International Limited
12
www.cnchemicals.com
Biopharmaceuticals China News
PRIORITY ORDER FORM Choose Type of Subscription: Single user PDF: □ 1 year CNY16,275/USD2,325 □ 2 years CNY27,668/USD3,953 Enterprisewide license: □ 1 year CNY40,688/USD5,813 □ 2 years CNY69,170/USD9,882 * The price is based on CNY and subject to exchange rate fluctuation. CCM reserves the right to adjust the rate o f USD if the exchange rate fluctuation exceeds 3%.
Your Details: First Name:
Surname:
Job Title:
Department:
Company: Address: Postcode/Zip Code: Country: Telephone:
Fax:
Email:
Payment Method: Wire Transfer
Bank Account: A/C NO.: 817-016793-838 BENEFICIARY NAME: CCM INTERNATIONAL LIMITED BANK NAME: HSBC TSIM SHA TSUI BRANCH BANK ADDRESS: 82-84 Nathan Rd, Tsim Sha Tsui, Hong Kong BANK SWIFT CODE: HSBCHKHHHKH
Please send your completed order to us by: Online at www.cnchemicals.com Post to CCM International Limited, 17th Floor, Huihua Commercial & Trade Building, No.80 Xianlie Zhong Road Guangzhou, 510070, P.R.China Tel: +86-20-37616606 Fax: +86-20-37616968 E-mail: econtact@cnchemicals.com
CCM International Limited
13
www.cnchemicals.com
CCM International Limited Address: 17th Floor, Huihua Commercial & Trade Building, No.80 Xianlie Zhong Road Guangzhou, 510070, P.R.China Tel: +86-20-37616606 Fax: +86-20-37616968 Email: econtact@cnchemicals.com Website: www.cnchemicals.com