Simcere Pharmaceutical Group
) recently announced that it has signed a share transfer
agreement with Zhuhai Rongding Equity Investment Partnership L.P.
on Jun 17, 2013.
As per the agreement, Simcere will sell its 99.99% stake in
Jilin Boda Pharmaceutical Co., Ltd for RMB 400 million.
We remind investors that Simcere had acquired a 51.0% stake in
Jilin Boda in Sep 2007. Thereafter, through a series of
transactions in 2010 and 2011, Simcere acquired another 48.99%
stake, resulting in an overall stake of 99.99%.
Jilin Boda manufactures Yidasheng, which is indicated for
stroke management. We note that edaravone injection (Bicun and
Yidasheng) generated sales of RMB 702.7 million of sales in 2012,
down 8.9% due to the loss of tenders.
Earlier in the month, Simcere entered into a strategic
Bristol-Myers Squibb Company
), whereby both companies will collaborate on the development and
commercialization of the subcutaneous (SC) formulation of
Bristol-Myers Squibb's rheumatoid arthritis drug, Orencia.
Simcere will primarily focus on the development and regulatory
activities, which are mandatory to obtain market approval for
Orencia SC in China. Both companies will share profits and losses
related to Orencia SC in China.
We wait for further updates from Simcere on how the cash
generated from the sale of the stake will be used.
We expect Simcere to face challenging market conditions in the
remainder of 2013 owing to pricing pressure from the government
in China. Nevertheless, improvements in cost structure should
lift the company's overall performance.
Simcere currently carries a Zacks Rank #2 (Buy). Right now,
stocks that look attractive include
) with a Zacks Rank #1 (Strong Buy).
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SIMCERE PHARMAC (SCR): Free Stock Analysis
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