BEIJING, May 20, 2020 /PRNewswire/ -- China Biologic
Products Holdings, Inc. (NASDAQ: CBPO, "China Biologic" or the
"Company"), a leading fully integrated plasma-based
biopharmaceutical company in China, today declared that Xinjiang Deyuan
Bioengineering Co., Ltd. ("Xinjiang Deyuan"), China Biologic's
source plasma supplier and cooperation partner, has materially
breached its strategic cooperation with China Biologic by entering
into plasma supply arrangements with Southern Shuanglin
Bio-Pharmacy Co., Ltd. ("Shuanglin"), and that China Biologic will
take all necessary measures to protect its rights.
The Company has learned from a public announcement issued on
May 15, 2020 by Shuanglin, a company
listed on the Shenzhen Stock Exchange, that Shuanglin and Xinjiang
Deyuan have entered into a cooperation framework agreement
regarding expansion of plasma collection stations, pursuant to
which Xinjiang Deyuan has entrusted five plasma collection stations
to Shuanglin and has begun to supply source plasma to Shuanglin
after receiving approval from the Xinjiang Heath Commission for the
entrustment arrangement, and Shuanglin has paid an initial deposit
of RMB40 million to Xinjiang Deyuan
(the "Shuanglin Transaction").
The five plasma collection stations that Xinjiang Deyuan
entrusted to Shuanglin are among the six stations that Xinjiang
Deyuan entrusted to China Biologic under the strategic cooperation
agreement (the "Cooperation Agreement") entered into in
August 2015 among the Company's
subsidiary Guizhou Taibang Biological Products Co., Ltd. ("Guizhou
Taibang"), Xinjiang Deyuan and its controlling shareholder (as
supplemented by a supplementary agreement entered into in
August 2018). Under the Cooperation
Agreement, Xinjiang Deyuan has the obligation to supply to Guizhou
Taibang no less than 500 tonnes of source plasma over a three year
period from August 2018 to
August 2021 and as of the date
hereof, Xinjiang Deyuan has not fully discharged its plasma supply
obligations, with approximately 192 tonnes of source plasma
remaining to be supplied to Guizhou Taibang. The entry into the
Shuanglin Transaction by Xinjiang Deyuan during the term of the
Cooperation Agreement makes the five plasma collection stations
entrusted to Shuanglin no longer able to supply source plasma to
Guizhou Taibang, which the Company believes
constitutes a material violation of the Cooperation Agreement.
As previously disclosed in the annual report on Form 20-F filed
by the Company with the Securities and Exchange Commission on
March 12, 2020, since November 2019, Xinjiang Deyuan has significantly
reduced the plasma volume delivered to the Company due to Xinjiang
Deyuan's operating cash shortfall and its disagreement with the
Company regarding payment arrangements for the plasma, and China
Biologic has been negotiating with Xinjiang Deyuan to try to
resolve the disagreement. In addition, as part of the Cooperation
Agreement, Guizhou Taibang lent to Xinjiang Deyuan a loan with a
principal amount of RMB300 million,
and as of the date hereof, the outstanding principal amount of the
loan is approximately RMB248 million
and the overdue interest amounts to approximately RMB10 million. On March
17, 2020, Guizhou Taibang filed two lawsuits against
Xinjiang Deyuan in the Beijing Third Intermediate People's Court
and the Beijing Chaoyang People's Court, respectively, to demand
the repayment of such loan, among other claims. According to
Shuanglin's public announcement, Shuanglin was aware of Xinjiang
Deyuan's ongoing dispute with China Biologic when entering into the
Shuanglin Transaction with Xinjiang Deyuan.
China Biologic had no knowledge of the Shuanglin Transaction
prior to its public announcement by Shuanglin, and Xinjiang Deyuan
did not obtain China Biologic's consent before entering into such
transaction. China Biologic views the Shuanglin Transaction as a
serious breach of the Cooperation Agreement by Xinjiang Deyuan. The
Company will take all necessary measures, including legal actions,
to protect its rights and recoup all potential losses due to
Xinjiang Deyuan's breach of the Cooperation Agreement, including
but not limited to any revenue loss due to Xinjiang Deyuan's
failure to supply sufficient source plasma to the Company. The
Company will also continue to vigorously litigate the two lawsuits
filed against Xinjiang Deyuan.
About China Biologic Products Holdings, Inc.
China Biologic Products Holdings, Inc. (NASDAQ: CBPO) is a
leading fully integrated plasma-based biopharmaceutical company in
China. The Company's products are
used as critical therapies during medical emergencies and for the
prevention and treatment of life-threatening diseases and
immune-deficiency related diseases. China Biologic is headquartered
in Beijing and manufactures over
20 different dosage forms of plasma products through its indirect
majority-owned subsidiary, Shandong Taibang Biological Products
Co., Ltd. and its wholly owned subsidiary, Guizhou Taibang
Biological Products Co., Ltd. The Company also has an equity
investment in Xi'an Huitian Blood Products Co., Ltd. Since the
acquisition of TianXinFu (Beijing)
Medical Appliance Co., Ltd. in 2018, China Biologic is also engaged
in the sale of medical devices, primarily regenerative medical
biomaterial products. The Company sells its products to hospitals,
distributors and other healthcare facilities in China. For additional information, please see
the Company's website www.chinabiologic.com.
Safe Harbor Statement
This news release may contain certain "forward-looking
statements" relating to the business of China Biologic Products
Holdings, Inc. and its subsidiaries. All statements, other than
statements of historical fact included herein, are "forward-looking
statements." These forward-looking statements are often identified
by the use of forward-looking terminology such as "intend,"
"believe," "expect," "are expected to," "will," or similar
expressions, and involve known and unknown risks and uncertainties.
Although the Company believes that the expectations reflected in
these forward-looking statements are reasonable, they involve
assumptions, risks, and uncertainties, and these expectations may
prove to be incorrect.
Investors should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
news release. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a
result of a variety of factors, including, without limitation,
quality of purchased source plasma, potential delay or failure to
complete construction of new collection facilities, potential
inability to pass government inspection and certification process
for existing and new facilities, potential inability to achieve the
designed collection capacities at the new collection facilities,
potential inability to achieve the expected operating and financial
performance, potential inability to find alternative sources of
plasma, potential inability to increase production at permitted
sites, potential inability to mitigate the financial consequences
of a temporarily reduced raw plasma supply through cost cutting or
other efficiencies, and potential additional regulatory
restrictions on its operations and those additional risks and
uncertainties discussed in the Company's periodic reports that are
filed with the Securities and Exchange Commission and available on
its website (http://www.sec.gov). All forward-looking statements
attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by these factors. Other than
as required under the securities laws, the Company does not assume
a duty to update these forward-looking statements.
Contact:
China Biologic Products Holdings, Inc.
Mr. Ming Yin
Senior Vice President
Email: ir@chinabiologic.com
The Foote Group
Mr. Philip Lisio
Phone: +86-135-0116-6560
Email: phil@thefootegroup.com
View original
content:http://www.prnewswire.com/news-releases/china-biologic-comments-on-the-xinjiang-deyuan-and-shuanglin-transaction-301062805.html
SOURCE China Biologic Products Holdings, Inc.