China Biologic Products Enters Into Agreement to Acquire 90% Controlling Interest in Chongqing Dalin Biologic Technologies Co.,
October 02 2008 - 8:00AM
PR Newswire (US)
- Transaction to create the largest non-state-owned producers of
plasma-based product in China TAIAN CITY, China, Oct. 2
/Xinhua-PRNewswire-FirstCall/ -- China Biologic Products, Inc.
(OTC:CBPO) (BULLETIN BOARD: CBPO) ("China Biologic" or the
"Company"), one of the leading plasma-based pharmaceutical
companies in the People's Republic of China ("PRC"), today
announced that on September 26, 2008, the Company has agreed to
acquire a 90% controlling interest in Chongqing Dalin Biologic
Technologies Co., Ltd. ("Dalin"). Dalin owns 54% of the equity
interest in Qianfeng Biological Products Co., Ltd. ("Qianfeng"),
one of the largest plasma-based biopharmaceutical companies in
China, located in Guiyang, Guizhou Province. The transaction is
expected to be completed within two months. Expected benefits of
the acquisition include: -- Increased plasma collection to almost
double current levels and significant increase in production
capacity -- Significant increase in commercial scale and expansion
into Guizhou Province -- Opportunity for synergies through
leveraging China Biologic's existing sales and administrative
infrastructure, as well as consolidating research and development
efforts -- Opportunity to increase prices for Qianfeng's product
line through China Biologic's strong brand name and higher value
product positioning -- Use of Qianfeng's technological know-how to
achieve higher yields per unit of plasma input and raise overall
efficiencies "This acquisition will transform our Company to become
the largest non-state-owned producer of plasma-based
biopharmaceutical products in China, in terms of market share and
production capacity," said Mr. Chao Ming Zhao, CEO of China
Biologic Products. "We expect that this transaction will allow us
to increase our supply of plasma by almost doubling our collection
quantity, expand our product portfolio and achieve our geographic
expansion plans. After the closing of our acquisition, our combined
production of plasma-based products is expected to reach
approximately 450 tons per year and our facilities will have a
combined capacity to produce 1100 tons per year. More importantly,
we expect to achieve significant synergies and economies of scale
through consolidation of our sales and administrative teams,
increased bargaining power with suppliers and more efficient
utilization of resources such as sharing our technological
know-how." Currently, China Biologic is the only approved
manufacturer of plasma-based biopharmaceuticals in Shandong
Province, which has a population of 93 million. China Biologic
currently produces about 200 tons of plasma-based products per year
and has 700 tons of annual production capacity. China Biologic had
revenues of $32.4 million and net income of $8.2 million in 2007.
Qianfeng is one of the largest plasma-based biopharmaceutical
companies in China and the only operating manufacturer in Guizhou
Province, which has a population of 39 million. Qianfeng produces
about 250 tons of products per year with annual production capacity
of 400 tons. China Biologic believes that Qianfeng currently has
approximately 9.5% market share in China, as compared to the
Company's 6.1%, which would result in a combined market share of
approximately 15.6%. The top 6 largest plasma-based
biopharmaceutical companies in China including Qianfeng have a
total market share of approximately 50%. Qianfeng is in compliance
with Good Manufacturing Practices ("GMP") standards, and has been
approved by the PRC's State Food and Drug Administration ("SFDA")
to produce six types of plasma-based products including Human
Albumin, Human Immunoglobulin, Human Intravenous Immunoglobulin,
Human Hepatitis B Immunoglobulin, Human Tetanus Immunoglobulin and
Human Rabies Immune Globulin. Qianfeng owns 7 plasma collection
stations in Guizhou Province, of which 6 are currently in operation
and collecting approximately 250 tons of plasma supply per year.
Upon completion of the acquisition, China Biologic plans to re-open
the additional plasma collection station in 2009. China Biologic
intends to employ more advanced collection techniques at these
stations, improving the Company's yields and generating additional
plasma supply. China Biologic chose to target Guizhou Province,
which has historically produced the highest volumes of plasma
collection in China, due to a higher proportion of its population
willing to engage in the collection process. Guizhou Province has a
total of 19 plasma collection stations in operation, collecting
approximately 1200 tons of plasma supply every year. "The strict
regulatory environment has limited the number of plasma-based
producers in the industry and rising demand for improved healthcare
has created a shortage of plasma-based products," Mr. Zhao further
commented. "Therefore, through the acquisition of Qianfeng, we
expect that we will increase our market share in China and enhance
our competitiveness." The Company will acquire the 90% interest in
Dalin for approximately $28.5 million, to be paid in four
installments. The Company ended the June quarter with approximately
$8.8 million of cash and no debt. Management believes a portion of
the acquisition price will be paid for via an anticipated bank
loan. About China Biologic Products, Inc. Through its indirect
majority-owned subsidiary Shandong Taibang Biological Products Co.
Ltd. ("Shandong Taibang"), China Biologic Products, Inc., a
Delaware corporation (the "Company"), is principally engaged in the
research, development, production and manufacturing and sale of
plasma-based biopharmaceutical products to hospitals and other
health care facilities in China. The Company's human albumin
products are mainly used to increase blood volume and its
immunoglobulin products are used for the treatment and prevention
of diseases. Safe Harbor Statement This release may contain certain
"forward-looking statements" relating to the business of China
Biologic Products, Inc. and its subsidiary companies. All
statements, other than statements of historical fact included
herein are "forward-looking statements," including statements
regarding: the significance of the acquisition of Chongqing Dalin
Biologic Technologies Co., Ltd. and its subsidiary Qianfeng
Biological Products Co. Ltd. on the Company's ability to increase
its overall production capacity, revenues and market share; the
ability of the Company to achieve its commercial objectives; the
business strategy, plans and objectives of the Company and its
subsidiaries; and any other statements of non-historical
information. These forward-looking statements are often identified
by the use of forward-looking terminology such as "believes,"
"expects" or similar expressions, involve known and unknown risks
and uncertainties. Although the Company believes that the
expectations reflected in these forward-looking statements are
reasonable, they do 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 press 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 those 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. For more information, please contact: Company Contact:
Mr. Y. Tristan Kuo CFO China Biologic Products, Inc. Tel:
+86-538-6202206 Email: Web: http://www.chinabiologic.com/ Investor
Relations Contact: Mr. Crocker Coulson President CCG Investor
Relations Tel: +1-646-213-1915 (NY office) Email: Web:
http://www.ccgir.com/ DATASOURCE: China Biologic Products, Inc.
CONTACT: Company Contact, Mr. Y. Tristan Kuo, CFO at China Biologic
Products, Inc., +86-538-6202206, or ; Investor Relations Contact,
Mr. Crocker Coulson, President of CCG Investor Relations,
+1-646-213- 1915 (NY office), or Web site:
http://www.chinabiologic.com/ http://www.ccgir.com/
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