Zhejiang Huahai Pharmaceutical Co., Ltd. (SHSE: 600521) signed an agreement with Merck (NYSE: MRK
) to provide an unnamed finished product to the big pharma. The deal represents a move up for Huahai Pharma, which has traditionally provided APIs to western pharmaceutical companies, as well as finished drugs in China.
Under the agreement, Huahai Pharma will formulate, produce and package the drug. Merck will distribute the product worldwide. Before Huahai can begin supplying the product, it must pass inspection by the FDA and the European Union. Huahai expects those approvals in the second half of 2009.
Huahai will also produce other preparations, pharmaceutical ingredients and intermediates for Merck under the agreement.
In October 2007, Huahai won the first ever FDA approval for a finished drug when the agency gave its OK to Huahai for generic version of the AIDS drug nevirapine, a Boehringer Ingelheim product that it markets under the name Viramune. Huahai must wait until the patent expires on nevirapine, which will occur in May 2012, before it actually exports the product to the US. Meanwhile, it is selling the drug to the government of China at $3.50 per bottle of 60, 200 mg pills.
At the time of the nevirapine approval, Huahai expected its next success would be a finished-dose Alzheimer's drug that would be sold in Europe and sales of nevirapine to the Clinton foundation for use in Africa, which would be allowable under the President's Emergency Plan for AIDS Relief (PEPFAR).
Zhejiang Huahai was founded in 1989. The company's website says its manufacturing facility includes 13 API workshops and one formulation workshop. Huahai's A shares were listed on the Shanghai Stock Exchange in March 2003.