India's Aurobindo Pharma has decided to cut loose its bleeding Chinese pharma subsidiary - while still holding on to its ingredients making operation - and instead focus on a new investment in India.
Aurobindo Pharma said it will divest Aurobindo Tongling (Datong) Pharmaceutical, which manufactures pharmaceutical products for the Chinese market, as it has been steadily incurring financial losses for the last three years.
However the firm will still retain its stake in the captive raw ingredients manufacturing part of the China-based business, Aurobindo (Datong) Bio-Pharma.
Meanwhile the company has decided to shift its investment back to India, taking over a slice of Senor Organics, a profit making, small pharmaceutical manufacturer which makes active pharmaceutical ingredients (APIs) and intermediates.
In particular, Senor specialises in piperazine and indole derivates and half of its business currently comes from custom synthesis projects.
Location wise, Senor is a perfect fit for Aurbindo, with its manufacturing unit in the Medak district of Andhra Pradesh, adjacent to one of Aurbindo Pharma's units.
In other movements in the Chinese pharmaceutical industry, it was also announced this week that Ever Leader Holdings, through its wholly owned subsidiaries, a Chinese-based pharmaceutical company engaged in the development, manufacturing and distribution of pharmaceuticals, APIs and intermediaries, has completed a reverse merger with Applied Spectrum Technologies, a publicly traded shell company.
The new entity will be called Benda Pharmaceutical, which according to Benda chairman and CEO Yiqing Wan will be "poised to benefit from the explosive growth in Chinese healthcare spending over the next two decades."