SP Pharma to set up IVD JV
Shanghai. March 3. INTERFAX-CHINA - Traditional Chinese medicine (TCM) maker SP Pharmaceutical Co. Ltd. plans to set up an in-vitro diagnostic (IVD) joint venture (JV) in Jiangsu Province's Yixing City, a company representative told Interfax March 3.
The JV, provisionally named Jiangsu SP Xianzhi Biotech Co. Ltd., will focus on the research and development (RD), production and distribution of IVDs for pre-diagnosing organ and stem cell transplant rejections, according to Kou Yongcang, an investor relations representative with SP Pharma.
SP Pharma will invest RMB 20 million ($3.04 million) for a 60 percent stake in the venture. Dr. Cai Junchao, a transplant immunology expert with the Chinese Academy of Sciences (CAS), will contribute RMB 400,000 ($60,880) and technological assets for the remaining 40 percent share.
"As far as we know, there are currently no such products on the China market," Kou told Interfax, but was unable to provide further details of the technological assets Cai will contribute to the JV.
Shanghai Stock Exchange-listed SP Pharma is headquartered in Yixing with production facilities in Qinghai Province. The company diversified into the electric wire and cable industry in September last year due to dwindling profit margins for its pharma operations, Interfax previously reported.
The company has chosen to enter the IVD market because it is more profitable than TCM, Kou said.
SP Pharma's net profit surged by 47.65 percent in 2010 to hit RMB 302 million ($45.96 million), according to its annual report released today. Operating revenue was RMB 9.46 billion ($1.44 billion), up 38.6 percent year-on-year.
"The surge in operating revenue was driven by our electric wire and cable business, which accounts for roughly 90 percent of our total revenue," Kou added.