In late October, when PPD, Inc. (NSDQ: PPDI) acquired fellow CRO Excel PharmaStudies, we suggested more CRO consolidation might follow. However, it was both a surprise – and not a surprise – when the news broke that PPD would follow up its Excel transaction with another major CRO acquisition, BioDuro LLC (see story). The 660 employees of BioDuro, which is based in Beijing, focus on drug discovery.
As Greg Scott, our Executive Editor, points out, the acquisition was interesting because it gives PPD a pre-clinical capability in China, and it shows the company is deeply committed to building a major China presence. The two deals put PPD on a par with, or even possibly ahead of other major western CROs – Quintiles, Covance (NYSE: CVD), Charles River (NYSE: CRL) – that have expanded into China. We expect more M&A activity will occur in China's highly fragmented CRO industry.
On another topic, Greg Scott also reflected on the huge difference between China and the US with respect to creating life science clusters. The US never has a strategic plan to create a cluster, so clusters grow up organically over many, many years. China, on the other hand, "declares" that an area will become a cluster, and then makes it happen (see story). China offers incentives to bring companies together to start a cluster, but it needs to develop more private funding, the money that is necessary to take these companies to the next stage.
In 2008-9, a record 98,510 students from China enrolled in American universities, a 21% increase, according to the Open Doors report, an annual survey (see story). Results aren't in for this year, but early indications are that numbers from 2009-10 will be even higher. Although China was second to India last year, its count of student emissaries is growing faster, giving it the momentum to possibly surpass India this year. In the last few years, China's life science industry has benefitted greatly from these students, many of whom go on the work in western companies, and then take their expertise back to China, the Sea Turtle phenomenon.
China Cord Blood Corporation (NYSE: CO) listed its ordinary shares on the New York Stock Exchange and, at the same time, completed a secondary offering (see story). The company placed 3.3 million shares at a price of $6.05 for gross proceeds of $20 million.
