Aoxing Pharma and Johnson Matthey form narcotics and neurological drug firm in China

By Alexandria Pešić

- Last updated on GMT

Related tags: Pharmacology, Pharmaceutical drug

Aoxing Pharma and Johnson Matthey team up to research, develop, manufacture and market active pharmaceutical ingredients (APIs) for narcotics and neurological drugs in China.

Through affiliated companies, the firms will form ‘Hebei Aoxing API Pharmaceutical Company,’ which is to be situated on the Hebei Aoxing campus in Xinle City near Beijing. The total capital investment in the new company is expected to be $15m over the next five years.

Under the agreement, Macfarlan Smith, a subsidiary of Johnson Matthey, will bring technological expertise and capital, while Hebei Aoxing Pharmaceutical Group Company of Aoxing Pharma, who will hold a 51 per cent stake in the new company, will provide capital, fixed assets and API manufacturing licences.

Zhenjiang Yue, chairman and CEO of Aoxing Pharma, commented, “This collaboration represents a landmark to our business as well as the greater pharmaceutical narcotics and pain management industry in China.”

He went on to stress that he expects China will become the third largest pharmaceutical market in the world over the next two years, but believes that, at present, the medical use of narcotic pain relief and related products is still far behind the rest of the world.

“The business of finished dosage narcotics in China has been significantly hindered by the difficulty in accessing the appropriate quality and quantities of APIs,”​ he said.

The collaborating firms aim for cGMP approval by the China SFDA for the new manufacturing facility by the end of 2010, and hope to begin manufacturing by the first quarter of 2011.

Hebei Aoxing will initially work to develop eight narcotic API products for the China market, but says as many as 30 new APIs could eventually be added to its product range.

“The joint venture will strengthen our finished dosage product business and has the potential to more than double our current product pipeline,”​ said Yue.

Narcotic drugs market in China

The new deal fits with predictions David Shao, Aoxing Pharma’s senior vice president of finance, made in 2007 at the Roth Capital Conference.

He said prior to the year 2000, the China narcotic drugs market was only one per cent the size of the US market, with only six narcotic drugs available. China, he said, was ranked number 83 out of 94 countries, surveyed by the International Narcotics Control Board.

Appreciating the need to increase the access and availability of this class of medication for patients, in year 2000 the Chinese government approved 11 new narcotic drugs for domestic use and 19 drug approvals

“This in fact has really enjoyed 30 per cent annual growth rate,” said Shao, predicting the market would be worth around $6bn by the end of the year.

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