Week In Review: Concord Medical Raises $240 Million For China Radiology Services

Government and Regulatory

China’s State Council announced a new initiative to bolster generic drugmakers (see story). New rules will impose higher standards for generic drugs. If a generic drugmaker can qualify as a high-tech enterprise, the company will be eligible for tax incentives -- the normal 25% tax on corporate profits will be reduced to 15%. For the past few years, CFDA Commissioner Jingquan Bi has been cracking down on generics, saying many are ineffective because they are not equivalent to the original drugs.  

A trade war between the US and China seems imminent, with both sides threatening to impose $50 billion of tariffs, a number that quickly grew to $100 billion (see story). At the moment, it seems as though the US will impose tariffs on products such as imported insulin, antibiotics and vitamins, among others. Experts caution that, because the threats need a few months to become effective, the tariffs may not progress into actual policies, as government regulators use the time to work out the underlying problems.  

Trials and Approvals

Denovo Biopharma, a San Diego-Hangzhou company, has started a pivotal Phase III trial of its lead drug, DB102 (enzastaurin) (see story). DB102, which was initially developed by Eli Lilly (NYSE: LLY), failed a Phase III clinical trial in 2013 in patients with diffuse large B-cell lymphoma (DLBCL). Denovo acquired global rights to DB102 in 2014, planning to redevelop the drug by targeting a sub-set of patients. By analyzing Lilly’s patient samples, Denovo found overall survival was significantly improved for patients who possess the DGM1 biomarker. The study will enroll 235 patients in the US and China.  

Company Spotlight

Shanghai Fosun Pharma (SHA: 600196; HK: 02196) plans to become the “Huawei of the pharmaceutical industry,” according to Qiyu Chen, Chairman of the company (see story). Chen made the comparison because, like the China smartphone company, Fosun will continue to invest in R&D and pursue M&A while it plans further expansion into global markets. Last year, Fosun spent $239 million on R&D, part of the nearly $740 million it has spent over the last five years. And it completed a $1.1 billion acquisition of a majority stake in India's Gland Pharma, which it says will help Fosun market biosimilar drugs globally.

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