The USA’s SciClone has acquired NovaMed of China, getting hold of the latter’s sales force and positioning the firm as an attractive partner for big pharma in this key emerging market.
Under terms of the agreement, NovaMed, a privately-held, Shanghai-based company backed by foreign venture capital, will receive upfront payments of $24.7 million in cash and SciClone common stock valued at $37.1 million. The firm’s investors could also pocket up to $43.0 million in cash , “contingent upon the successful achievement of revenue and earnings targets for the 2011 and 2012 fiscal years”. Combined revenue for the new entity is expected to be $140-$145 million this year.
NovaMed, which had revenues of around $31.5 million last year, has a portfolio of 18 drugs spanning oncology, cardiovascular disease, central nervous system disorders and urology/infection. SciClone chief executive Friedhelm Blobel said the deal allows his firm “in a single transaction, to dramatically expand our presence in China in five important areas: pharmaceutical products, targeted therapeutic indications, management depth, sales force size and revenue”.
He noted that whereas SciClone had already established itself in China with Zadaxin (thymalfasin), which is sold for the treatment of hepatitis B and hepatitis C, as well as for certain cancers and as a vaccine adjuvant, “we have now evolved into a formidable presence in this fast growing market with a combined sales force of more than 680 individuals, nearly 20 commercial stage products spanning several key indications, and an expanded Shanghai based management team with significant pharmaceutical industry experience”.
SciClone’s chairman Jon Saxe added that the combined entity “should be an even more attractive partner for pharmaceutical companies wishing their products to be developed and represented in the Chinese market”. NovaMed already sells three Sanofi-Aventis products - Depakine (sodium valproate), the most widely prescribed broad-spectrum anti-convulsant in China, the blood pressure lowering drug Tritace (ramipril) and the hypnotic Stilnox (zolpidem) - and has exclusive licensing and promotion agreements with Pfizer and Baxter International.