At the time, EPO was Dragon's only focus, and its foray into the European EPO market was based on the assumption that the European Medicines Evaluation Agency (EMEA) would approve the registration of EPO with relatively few hurdles.
Dragon anticipated that its EPO would be commercialised in 2006 or 2007 and was expecting to fulfil Polymun's €3.2m minimum purchase commitment of EPO during this time.
However, in light of EMEA's much delayed and more stringent clinical requirements for human recombinant EPO and its cautious regulatory approach to biosimilars, such as rejecting CPMP's recommendation to approve Sandoz's biosimilar version of human growth hormone, Dragon has now pulled out of the project that it labelled "risky".
Based on the latest EMEA approval guidelines, the company estimated that it would have to spend over $20 m and would require a minimum of another 3 to 4 years to commercialise EPO in the European market.
"The Company will now focus on developing its other growth areas, especially the Chemical business which could be very competitive and successful in both the Chinese and international markets," said Mr. Yanlin Han, chairman and CEO of Dragon.
Dragon, who traditionally sold its products in China, has been expanding commercialisation of its products on an international scale and has seen its sales steadily increasing.
In particular, Dragon's chemicals business has been experiencing great success, with third quarter financial results showing it has grown over 450 per cent over the past year and 23 per cent sequentially from the second quarter, fuelling an 82 per cent year-over-year growth in revenues for the company.
"We do expect the revenues from the Chemical Division will continue to grow as we continue to maintain at a high production level. Such trend will be even more obvious during the fourth quarter because the Company only started the ramp up of the 7-ACA production level in late July this year," said Han.
"We already managed to produce at more than 80 per cent of the original full production capacity (400-tons per year) for our 7-ACA production facility," he said.