ShangPharma has raised $87m through an IPO on the New York Stock Exchange according to a Bloomberg report, beating the $46m to $53m the Chinese CRO forecast.
In a US Securities and Exchange Commission (SEC) filing the Shanghai firm said it will spend some $15m of the proceeds on construction of a new facility in neighbouring Fengxian.
The contract research organisation (CRO) added that the 460,000 sqft building will produce drug intermediates and active pharmaceutical ingredients (APIs) for both preclinical development and clinical trials
The project is expected to take two years with, according to ShangPharma, the first 200,000 sq ft of manufacturing space due to be operational sometime in 2011.
ShangPharma, which lists Wuxi PharmaTech, Albany Molecular Research, Cerep and Covance as key rivals in its IPO prospectus, also predicted that competition in the contracting sector will increase.
“We face competition based on several factors, including the quality and scope of services, the ability to protect confidential information and intellectual property, the ability to be responsive and efficient with respect to customers’ requests, depth of customer relationship and pricing.”
ShangPharma also suggested that, in China, it is likely to compete more directly with pharmaceutical firms that have invested significant capital in building R&D capacity in the country.
“These in-house investments may result in increased competition for qualified personnel. Some of our larger competitors may have greater financial, research and other resources, broader scope of services, greater pricing flexibility, more extensive technical capabilities and greater name recognition than we do.
“Furthermore, consolidation within the global pharmaceutical and biotechnology R&D outsourcing markets may create stronger competitors than those we are facing today.