First Chinese CRO merger announced
they will merge - a first in China's CRO industry.
Sundia MediTech and United PharmaTech said today they have signed a letter of intent agreeing to combine, just two weeks after forming a service partnership with another contract researcher. Under the terms of the merger, the two companies - Sundia MediTech and United PharmaTech - will become subsidiaries of Sundia Investment Group, a holding firm based in the British Virgin Islands which owns Sundia. Sundia CEO Dr Wang Xiaochuan will become the new company's Chairman and CEO, while United PharmaTech current CEO Dr Shi Xiongwei will hold the positions of director and executive vice president. The two companies' senior staff will also join together into a new, combined management team. The proposal was approved today by one of Sundia shareholders, International Data Group Venture Capital (IDG VC), and also by the Board of Directors of both firms. "The CRO companies and the overall size of the CRO industry in China are still relatively small, and there is huge potential for growth so we can expect that in the following few years there will be many mergers," said Zhang Suyang, a partner at IDG VC. "Companies in this industry will grow very quickly and very soon we will see companies of reasonable size and with good governance emerge as corporations with serious long-term potential." This merge comes hot on the heels of the formation of the first contract research service alliance (CROSA) in China between the two companies and a third leading local firm to provide a more exhaustive range of drug development services to pharma companies. Sundia, United Pharmatech and HD BioSciences, the three Shangai-based contract research organisations (CROs) at the root of the project said they would combine their respective expertise to provide a wider range of drug discovery and development services to their clients - from preclinical to clinical supply manufacturing. This is the first collaboration of its kind in the country. Sundia's CEO Dr Wang said that while there were currently no plans for HD Biosciences to join its two former partners in the merger, "the new company will maintain all ties with HD Biosciences and all agreements made between HD Biosciences and the two merger partners will remain the same." This rapid move shows the two firms are taking advantage of China's high position on the list of top outsourcing destinations for drug development. In the past five years, the Chinese CRO industry has become a booming market as more and more drug companies are choosing the region to find service providers capable of offering R&D services for all the stages of drug development. Dr Wang added that of the drivers behind the move was to combine the two companies' expertise, which are seen as complementary, to expand more quickly. Sundia's services include preparation of intermediates and novel templates, synthesis of novel building blocks, specially designed focused libraries, lead optimization and analytic chemistry, while United Pharmatech specialises in chemical synthesis of building blocks, pharmaceutical intermediates and active pharmaceutical ingredients (API) as well as pharmaceutical development of off-patent drugs.
