BEIJING, Sept. 2, 2015 /PRNewswire/ -- China Biologic
Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a
leading fully integrated plasma-based biopharmaceutical company in
China, today announced that the
Company's subsidiary Guizhou Taibang Biological Products Co., Ltd.
("Guizhou Taibang") entered into a strategic collaboration
agreement (the "Agreement") with Xinjiang Deyuan Bioengineering
Co., Ltd. ("Xinjiang Deyuan") to source raw plasma. The Agreement
allows Guizhou Taibang to source no less than 500 tonnes of source
plasma from Xinjiang Deyuan over the next three years.
The raw plasma will be shipped in batches to Guizhou Taibang for
the production of human albumin and IVIG products. The Company
expects that the products made from the sourced raw plasma will
begin to reach the market in second half of 2016. As required and
approved by the local regulator, during the term of the Agreement,
Xinjiang Deyuan will entrust the operation of its plasma collection
stations to Guizhou Taibang.
As part of the Agreement, Guizhou Taibang agreed to lend to
Xinjiang Deyuan an interest-bearing loan with a principal amount of
RMB300 million (approximately
US$47 million). The loan is due
July 31, 2018 and is secured by a
pledge of a 58.02% equity interest in Xinjiang Deyuan from its
controlling shareholder. The loan to Xinjiang Deyuan and the raw
plasma will be funded primarily by the Company's cash released from
a collateral deposit to secure a USD-denominated loan that the
Company repaid in full in June
2015.
Mr. David (Xiaoying) Gao,
Chairman and Chief Executive Officer of China Biologic, commented,
"We are pleased to announce our strategic collaboration agreement
with Xinjiang Deyuan. We have substantially processed the initial
143 tonnes of source plasma and plasma pastes outsourced from
Xinjiang Deyuan in our first cooperation agreement, in April 2015. Through the initial agreement, we
laid a solid foundation for our further collaboration, gained trust
from both our business partners and regulators, and demonstrated
our strong operational capabilities, including quality control and
production management."
Mr. Gao continued, "This transaction represents a unique growth
catalyst for China Biologic as it will provide us a significant
volume of additional raw material over the next three years. The
Agreement is mutually beneficial to both parties as our loan will
allow Xinjiang Deyuan to resume plasma collection operations at
their existing five collection stations, which have been shut down
for almost one year, as well as pursue facility upgrade projects.
As we continue to devote our efforts to expanding our in-house
plasma collection capacity, this collaboration will allow us to
efficiently enhance our Guizhou
facility's production capacity utilization, and supply more
plasma-based products to satisfy growing demand and increase our
market share."
"While the cost for these raw materials is moderately higher
than plasma from our own collection stations, we expect the net
profitability on the products made from these raw materials to be
in line with our Guizhou
facility's current profitability, as we will incur substantial
operational cost savings through significant capacity utilization
improvements. We remain committed to ensuring sustainable supply
growth to meet China's increasing
demand for plasma-based products and we believe we are well
positioned to be a leader in this field for years to come,"
concluded Mr. Gao.
About China Biologic Products, Inc.
China Biologic Products, 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 dosages of plasma-based products through its indirect
majority-owned subsidiaries, Shandong Taibang Biological Products
Co., Ltd. and Guizhou Taibang Biological Products Co., Ltd. The
Company also has an equity investment in Xi'an Huitian Blood
Products Co., Ltd. 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,
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. Among other things, the
Company's plans regarding the production and sale of plasma
products made from the outsourced raw materials and the
management's quotations and forecast of the Company's financial
performance in this news release contain forward-looking
statements. 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, the
actual volume of outsourced source plasma delivered, quality
inspection of outsourced source plasma, potential delay in bringing
to the market as planned the products made from the outsourced
source plasma, potential delay or failure in acquiring land use
rights, obtaining construction permits, completing the design or
construction, or passing the government inspection and
certification process for new collection stations in Hebei province, potential inability to achieve
the designed collection capacities at the new collection stations,
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, Inc.
Mr. Ming Yin
Senior Vice President
Phone: +86-10-6598-3099
Email: ir@chinabiologic.com
ICR Inc.
Mr. Bill Zima
Phone: +86-10-6583-7511 or +1-646-405-5191
E-mail: bill.zima@icrinc.com
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SOURCE China Biologic Products, Inc.