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The Metrics of Growth in China Biopharma

 May 17, 2008 05:13 PM

The healthcare market in China is certainly growing, and so are the companies that serve the market, though the parameters used to measure that growth may differ for each biopharma. For public companies, the quarterly earning statement delivers a significant analysis of a biopharma's measure of success, and last week, China biopharmas continued to roll out Q1 reports that were remarkable for their uniformly positive news. But for private companies, the metrics have to be different. In ChinaBio® Today last week, we published examples of both types of stories.

GenePharma, a young and growing private company that provides research tools to the hot siRNA market, was the subject of a profile that included an exclusive interview with its founder and CEO, Dr. Peter Zhang (see story). GenePharma has recently made two announcements that testify to its ambitious plans: the company is opening a new manufacturing a facility in BioBay Park near Suzhou, and it acquired a patent license from Alnylam (NSDQ: alny). The patent license allows GenePharma to sell its siRNA products worldwide. Combining low prices with excellent service – and an explosive market for siRNA products – GenePharma is well-positioned for growth. The company is also a textbook example of the sea turtle phenomenon, the convergence of recent historical and economic trends that has made China a preferred location for siting biopharma enterprises.

No fewer than four China-based, American-listed biopharmas disclosed their Q1 financial reports during the last week. Each announced revenue growth of at least 39%, and two were able to say their sales had more than doubled.

China Sky One (OTCBB:cski.ob), with a remarkable 140% jump in revenue ($12.4 million) and a 170% climb in net income ($3.9 million), wins the Most Improved award for companies reporting this week (see story). To continue its growth, China Sky One completed two acquisitions in the beginning of Q2 that will continue its growth. One acquisition, Heilongjiang Tianlong Pharma, is a competitor of China Sky One in the niche of externally-applied (patches, sprays, ointments) drugs, and the other addition, Heilongjiang Haina Pharma, has a Good Supply Practice license that allows distribution of drugs. Meanwhile, China Sky One continues to expand its in-vitro diagnostic test offerings, and the company is applying for listing on the American Stock Exchange. Presently, China Sky One is listed on the OTC Bulletin Board.

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