What Happened To China Pharma Outsourcing Industry In 2008 - News Compile

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What Happened to China Pharma Outsourcing Industry in 2008? Selected News Compile

By JZMed, Inc. February, 2009

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Preface In a short period of eight years, Chinese pharmaceutical outsourcing industry has been growing in an average annual rate of 48%. China has now become the primary choice of outsourcing destination for drug companies around the world. The industry is currently composed of 250 professional service providers, 50 multinational service providers, 150 traditional Chinese pharmaceutical companies and 20 Chinese biotechnology companies and has reached a market value of more than $1.4 B. Only three years ago, Chinese pharma outsourcing industry was still under radar detection. However, because of the emergence of a decent industry size and the reality of its fast development, it is now receiving more and more attention from major pharmaceutical markets. The numbers listed in the following table from JZMed’s news collection could back this conclusion. Table 1. News Coverage on China Pharma Outsourcing Total numbers of piece of outsourcing news Worldwide China outsourcing outsourcing 2006 88 5 2007 138 20 2008 281 81 Source: JZMed Database. Year

News coverage on China outsourcing Percentage (%) 6% 14% 29%

To help professionals in all related industries gain a quick peek of what is going on in this Chinese industry and recall what happened to it last year, we edited this News Compile. All news related to China pharma outsourcing was reported in 2008 by various media worldwide. We hope this News Compile will assist professionals to better understand this Chinese industry. Please contact JZMed, Inc. with any questions or inquiries.

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Table of Contents Preface ------------------------------------------------------------------------------------------------2 News on Major Pharma Companies in China Novartis has big plans in China --------------------------------------------------------------------6 Novartis Seeks to Accelerate Growth in China --------------------------------------------------6 GSK to double R&D staff in China ---------------------------------------------------------------7 GSK Signs Pre-JV Vaccine Pact with Shenzhen Neptunus Interlong ------------------------7 Sanofi-Aventis to Market Seasonal Flu Vaccine in China -------------------------------------7 Sanofi invests in Chinese clinical R&D capacity -----------------------------------------------7 Novo Nordisk made Major Investment in Its Tianjin Facility ---------------------------------8 Roche Announces Expansion in China -----------------------------------------------------------9 Lilly Adds New Target to Hutchinson Meditech Collaboration -----------------------------10 AZ to slash more European jobs and ramp-up China investment ---------------------------10 From Europe to China: AZ Restructures Packing Strategy ----------------------------------10 AstraZeneca announced proposed further investing in its Wuxi plant in China -----------11 Schering-Plough to Use HUYA Bioscience for Hunting Drug Candidates in China -----12 News on Investment Activities Beijing Chemclin Biotech Co. received $16.5 million investment --------------------------15 China Launches “Mega Program” to Fund Drug Development -----------------------------15 Medtronic Buys 15% of Shandong Wiegao; Opens JV ---------------------------------------15 BMP Sunstone Acquires 50% Stake in Pediatric Drug Maker ------------------------------15 New VC Fund to Back Biopharmas in Jilin Province -----------------------------------------16 Joint Ventures JV formed between MPI Research and Medicilon --------------------------------------------17 GSK Signs Pre-JV Vaccine Pact with Shenzhen Neptunus Interlong ----------------------19 Shinva and GE Healthcare Form Medical Device JV -----------------------------------------19 Alliances European CRO joins first Chinese CRO alliance ----------------------------------------------20 Provid and Acesys Form US-China Medicinal Chemistry CRO Alliance -----------------21 Tigermed, OCT and LSK to set up global trials network -------------------------------------21 Acquisition ________________________________________________________________________ Page 3 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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WuXi PharmaTech makes its first acquisition -------------------------------------------------23 NeoStem buys its way into China ----------------------------------------------------------------24 Smiths Group Buys China Device Maker ------------------------------------------------------25 Frontage deal bolsters PRA’s lab services business -------------------------------------------25 News on Drug Discovery Service J&J signed another contract deal with WuXi PharmaTech -----------------------------------27 News on Preclinical Research Service China become a hot place for preclinical services ---------------------------------------------28 After searching all over the world, Bridge finally landed in China -------------------------29 Charles River accelerates China plans; reports profit jump ----------------------------------31 Immtech joins the China club --------------------------------------------------------------------32 WuXi broke planned deal with Covance -------------------------------------------------------33 Charles River opens preclinical centre in Shanghai -------------------------------------------34 Covance plans for preclinical in China ----------------------------------------------------------35 PharmaLegacy Opens facility in China ---------------------------------------------------------36 Pfizer now use WuXi PharmaTech for preclinical research ---------------------------------37 WuXi PharmaTech Shanghai Rodent Facility Awarded AAALAC Accreditation -------38 BioDuro Labs Accredited by AAALAC --------------------------------------------------------38 News on Clinical Research Service Asian CROs poised for substantial growth -----------------------------------------------------39 China to benefit if India tightens clinical trial rules -------------------------------------------40 PPD initiates central lab services in China -----------------------------------------------------41 Omnicare broaches China's borders -------------------------------------------------------------43 Tigermed Builds Up Phase I CRO Services ----------------------------------------------------44 News on Contract Manufacturing Service WuXi ends US biologics manufacture; focus on testing --------------------------------------45 News on Medical Devise/Instruments Tecan Expands Operations In China And Asia Pacific ---------------------------------------47 Cook Medical to Open Asia Regional Center in Shanghai -----------------------------------48 Shinva and GE Healthcare Form Medical Device JV -----------------------------------------48 News on Biological Testing Service ________________________________________________________________________ Page 4 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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BioCurex to Offer Cancer Tests in Shanghai --------------------------------------------------49 ProGenTech to Develop Diagnostics with China’s CDC -------------------------------------49 News on Service of Outsourcing Service Drug Information Association (DIA) Opens New Office In China -------------------------50 Chinese Companies Use Service Provided by Western Companies QIAGEN and Shanghai Biochip Corp. Sign Collaboration Agreement --------------------52 Sartorius Stedim Biotech Signs Agreement With WuXi AppTec ---------------------------52 Pharmatech Associates Leads Design For First FDA-Licensed Biomanufacturing Facility In China -------------------------------------------------------------53 Honeywell inks China packaging deal ----------------------------------------------------------54

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News on Major Pharma Companies in China Novartis has big plans in China May 06, 2008 Every major pharmaceutical company has a "China" strategy. Novartis is among the most aggressive: it is currently the fourth biggest supplier of medications to hospitals in that country and aims to make China one of its top 10 markets by 2010. On April 2, Novartis’ China R&D center broke ground on its permanent headquarters in Shanghai’s Zhangjiang Hi-Tech park. It currently has more than 2000 full-time employees in China, and plans to make an initial investment of $96 million to build the R&D center which focuses on treatments for diseases with a high prevalence in that country. (Our 2006 take on the NITD and its ilk can be found here.). It was clear to Novartis that China is going to be a tremendous market. It is convinced that it is one of the most important emerging markets.

Novartis Seeks to Accelerate Growth in China November 05, 2008 China business revenues of Novartis grew 24.8% last year, Jeffrey Li, President of Novartis China, told the press on November 5. According to Li, the company hopes to raise its annual business growth in the country to between 30% and 40% and will seek to maintain this growth speed in the next five to ten years. In order to facilitate the growth plan, Novartis will step up investments into its R&D center in Shanghai and expand its marketing & sales force by 20% next year. Li said Novartis is optimistic about the future of the Chinese pharmaceutical market, although it is still unable to make a judgment over the potential impacts of the current global economic downturn on this market. Li also stated that he is encouraged to see that the country's ongoing healthcare reform seeks to provide broader healthcare coverage to more population. Li revealed that Novartis will also seek to boost its OTC drug market share in China and admitted that his company's growth in this area has not been satisfactory. The existing OTC drug sales of Novartis has been concentrating on Voltaren, but the company is in the process of registering more OTC drugs. However, new OTC products are unlikely to be launched in the short term due to the long registration process for OTC products (three to four years) in China. Li disclosed that Novartis is actively looking for acquisition targets in China to accelerate its growth in the country, and the priorities will be given to the opportunities in the OTC drug sector.

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GSK to double R&D staff in China August 07, 2008 GlaxoSmithKline Plc plans to double its research and development staff to 350 in the next few years. The company currently employs 170 R&D staff in China. Carol Zhu, head of operation management and alliances in GSK's China R&D unit said the drug maker plans to boost that to 200 by the end of 2008 and to 350 within another year. Zhu added that staff levels would remain fixed for three or four years after the increase. The company will expand its facilities to accommodate further increases after that, she said. GSK Signs Pre-JV Vaccine Pact with Shenzhen Neptunus Interlong November 21, 2008 GlaxoSmithKline and Shenzhen Neptunus Interlong Bio-Technique Co. Ltd. (NIBT), an established vaccine manufacturer in China, will work together to develop flu vaccines for the China market. The two companies have signed a formal Cooperation Agreement that will lead to the formation of a JV company with $78 million of assets, if certain undisclosed conditions are met.

Sanofi-Aventis to Market Seasonal Flu Vaccine in China October 13, 2008 HONG KONG (Reuters) - French drug maker Sanofi-Aventis hopes to sell 25 million doses of seasonal flu vaccine annually into China's largely untapped domestic market once its plant in the southern city of Shenzhen goes onstream in 2012. Wayne Pisano, head of the company's vaccines arm Sanofi-Pasteur, said on Monday only two percent of Chinese were vaccinated against seasonal flu each year, a fraction of the coverage in Europe and the United States.

Sanofi invests in Chinese clinical R&D capacity October 23, 2008 French drug giant Sanofi-Aventis has set its sights on developing China as its Asian R&D hub, unveiling plans for a significant expansion of its clinical research unit in Shanghai. ________________________________________________________________________ Page 7 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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The facility, which was established in 2005, has already been involved in several global registration studies for a range of Sanofi products including Lantus, Plavix, rimonabant, dronedarone and idrabiotaparinux. The firm said that the planned expansion will allow it to keep pace with the growth of the country’s drug sector and in particular with the increasing demand for local clinical trials by the Chinese State Food and Drug Administration (SFDA). Sanofi’s plans are designed to compliment the new biometrics centre it recently set up in the Chinese capital Beijing. This new facility, which is due to be fully operational by the end of the year, will provide the firm with study design data, management and statistical analysis services. The firm reiterated that, while the new centre will support global Phase I to IV studies, ramping up the level of local registrational work and broadening the scope of clinical operations in China would be among its top priorities. Closer academic links Drug discovery is another important aspect of Sanofi’s Chinese plans, as evidenced by its new deal with the Shanghai Institutes for Biological Sciences (SIBS), which represents eight of the country’s top scientific institutes. The move is not Sanofi’s first deal with Chinese researchers. In 2007, it formed a partnership with the Institute of Hematology and Blood Disease in Hospital in Tianjin under which it is conducting a project to develop antibodies to acute myeloid leukaemia (AML) and other cancers. In addition to forging closer ties with Chinese academia, the partnership will see Sanofi invest in a scholarship programme designed to support the development of the country’s most promising young scientists in fields including structural chemistry, biology and pharmacology. SIBS’ vice president, Jia-Rui Wu, commented that: “This collaboration agreement brings pharmaceutical R&D in China to another level, by allowing talented Chinese scientists to become internationally recognised and ensuring that discoveries made in the area of basic research are rapidly converted into applications for treating disease."

Novo Nordisk made Major Investment in Its Tianjin Facility November 07, 2008 Novo Nordisk announced on November 7 that it is investing close to US$400 million in a production facility in Tianjin, China. The company has earmarked the new insulin ________________________________________________________________________ Page 8 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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production plant in Tianjin as its primary production base in the Asia-Pacific region. It represents one of the largest investments in the firm's history and is said to be creating up to 500 new jobs. "The new plant in Tianjin will become the world's most modern insulin formulation and filling plant and is yet another example of the increasingly important role China is playing in Novo Nordisk's global operations," stated president and chief executive officer Lars Rebien Sorensen. Ronald Frank Christie, president of Novo Nordisk China, suggested that the facility will provide the company with a strengthened base for meeting the challenge posed by diabetes in the Asian countries. The decision indicates that many multinationals remain confident about China's mediumterm growth prospects even as signs are indicating that the economy is slowing much more quickly than previously expected. "For over a decade we have realised that the diabetes market in China would grow quickly and nothing in the recent financial crisis has really changed that," said Lars Rebien Sorensen, chief executive of Novo Nordisk. China has continued to receive large volumes of foreign direct investment this year, in spite of slowing growth in many economies around the world and the tight conditions in credit markets.

Roche Announces Expansion in China November 03, 2008 Roche announced today that it will establish an Asian Drug Collaboration Unit in China and at the same time expand the company’s manufacturing facility in Shanghai in order to streamline its global supply chain, step up export sales from China and prepare for the company’s growth in China in the next decade. Dr. Franz Humer, the company’s chairman, revealed at the inauguration ceremony in Shanghai that the facility expansion project will include expansion and upgrading of its existing administrative and manufacturing facilities, and construction of a number of new facilities including a quality control building, a sample collection and testing center for prescription drugs and high sensitized drugs, warehousing and cold storage facilities for APIs and prescription drugs, and regenerative energy systems. Humer stated that Asia, in particular China, has significant growth potential for the emerging biotech sector and by establishing an Asian Drug Collaboration Unit in China, Roche seeks to strengthen its collaboration with China, South Korea, Taiwan and Singapore in new drug innovation. ________________________________________________________________________ Page 9 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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Roche currently cooperates with more than 80 international institutions including Genentech and Chugai Pharma in drug R&D, and has collaborative agreements with three well-known Chinese pharmacy colleges. Roche established its first joint venture in China with a total investment of US$45 million in 1994 and currently markets 22 innovative drug products in the country.

Lilly Adds New Target to Hutchinson Meditech Collaboration November 24, 2008 Hutchison China Meditech Ltd has expanded its drug discovery and development partnership with Eli Lilly, adding another oncology target to the list. When the two companies set up their partnership last year, the initial areas of concentration were specified targets in oncology and inflammation.

AZ to slash more European jobs and ramp-up China investment November, 24, 2008 AstraZeneca is to cut 1,400 jobs and close more manufacturing facilities by 2013, as it attempts to slim down in preparation for impending generic competition for some of its cornerstone drugs. The move, which is in addition to the 7,600 jobs the firm will eliminate over the next two years under its 2007 restructuring plan, will see it close facilities in Porrino, Spain, Destelbergen, Belgium and Umeaa, Sweden. Jobs at the company’s plants in Macclesfield in the UK and Sodertaije, Sweden will also be affected although further details are not being released at present. The news comes just days after the drugmaker won a case temporarily blocking a generic version of its asthma drug Plumicort Respules made by Israeli firm Teva Pharmaceutical Industries. AstraZeneca, which has halted sales of a generic version of Plumicort that it sells with Par Pharmaceuticals, said that the final outcome of the patent trial, due to begin again tomorrow, is likely to impact on its earnings for the year. Observers had mixed feelings about the patent battle. Natixis’ Philippe Lanone, told Bloomberg that although AstraZeneca had reacted quickly there already may be some damage from early shipments of Teva’s generic version of Plumicort. The UK firm’s share price fell 1.7 per cent, or 42 pence, in trading on the London Stock Exchange.

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Regardless of the outcome of the Plumicort battle, AstraZeneca’s announcement of new job cuts is a further indication of the difficulties being faced by big pharma in the changing global market. While planned cuts by other drug majors such as Pfizer, Merck & Co, Schering Plough, Wyeth and GSK have been on the table for several years, the headlines in recent months have been dominated by news of additional restructuring moves. Most recently Merck CEO Richard Clark said that the company must lose a further 7,200 jobs to survive. Astra looks East AstraZeneca also fell in line with another trend sweeping big pharma, announcing plans for further investment in its operations in South East Asia. The firm plans to increase its investment in its manufacturing facility in Wuxi, China. The additional funds, details of which have not yet been released, is designed to expand the plants drug formulation capabilities and establish it as a packaging hub for its all of its manufacturing facilities in the region. Commenting on the plan, AstraZeneca executive vice president David Smith said that: “It moves the supply process closer to the customer, responding to their requirements and improving the security of the product wherever it is bought.”

From Europe to China: AZ Restructures Packing Strategy November 26, 2008 AstraZeneca, last week, announced that it will eliminate packing sites in Spain, Belgium, and Sweden augment it’s facility in China to keep up with growth in the Asia Pacific markets. The move will cost AZ at least 1,400 positions by 2013. The closing of the three European plants is part of a regional strategy designed to make sure AZ is producing where the market is. Historically, the company has produced and packed its merchandise in Europe and shipped to China as needed. “We now have significantly more demand in China, and we are going to manufacture, pack, and produce closer to where the customers are,” said Sarah Lindgreen, global media relations specialist at AstraZeneca. “This gives AZ more customer insight and reduces shipping costs.” AZ will establish Macclesfield, Cheshire, UK, as its regional packing center for the European market, transferring packing that is now done at the smaller sites to a central location. There will be a net reduction in headcount at Maccelsfield of about 250 people. Some employees will be taking on new roles, and some of the formulation work that was being done in Europe for the Chinese market will be moved to China. ________________________________________________________________________ Page 11 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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“With the increasing wealth of the Chinese population, a shift in the demographics, and a greater awareness of healthcare opportunities, the Chinese are pushing for a range of drug products, including mature drugs that are no longer as popular in the states or Europe,” Lindgreen told Pharm Exec on Tuesday. “They want the drugs that were new 10 years ago. They’ve never had access to these medications, and we are seeing significant growth.” She noted that there will be upgrades at the China plant during the next five years, but at this time AZ hasn’t indicated whether improvements will be in headcount or capitol investments. “These moves are a continuation of AstraZeneca’s program to improve the organization’s productivity and efficiency,” stated David Smith, executive vice president of operations, AstraZeneca. “It moves the supply process closer to the customer, responding to their requirements and improving the security of the product wherever it is bought.” In other news, AstraZeneca was awarded a temporary restraining order against Teva Pharmaceuticals to stop the generics firm from marketing its version of AZ’s asthma drug Pulmicort. As an addendum, AZ will have to stop selling its own generic version of the drug that it developed with Par Pharmaceuticals. AstraZeneca announced proposed further investing in its Wuxi plant in China November 20, 2008 AstraZeneca announced proposed changes to its global manufacturing and supply chain operations as part of its plans to improve efficiency. The company introduced new manufacturing processes, and it will also establish a regional packing strategy to improve its ability to respond to customer requirements. AstraZeneca will exit three sites: Porriño in Spain, Destelbergen in Belgium, and Umeå in Sweden. The company also announced that roles will be affected at its facilities in Macclesfield, UK, and Södertälje, Sweden. These moves will result in a net reduction across the business of 1400 positions by 2013, subject to local consultation. AstraZeneca is further investing in its Wuxi plant in China. Part of this investment will provide additional packing and formulation capabilities.

Schering-Plough to Use HUYA Bioscience for Hunting Drug Candidates in China December 18, 2008 HUYA Bioscience International, a leader in US/China pharmaceutical co-development, recently announced an agreement with Schering-Plough Corporation's subsidiary, N.V. Organon. Schering-Plough has selected HUYA to identify and present to Schering-

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Plough on an exclusive basis proprietary lead, preclinical and clinical drug candidates in specific therapeutic areas that originate in China. "HUYA is quickly gaining a reputation as a key point of contact for members of the Chinese bioscience community looking to establish relationships with Western development partners," said Mirielle Gingras, PhD, President and CEO of HUYA. "Our agreement with Schering-Plough demonstrates both the effectiveness of our network in China, and our ability to leverage that network to benefit major development partners in the West. We are delighted to be forging this new alliance, and look forward to a fruitful collaboration." Schering-Plough will gain access to HUYA's growing Chinese bioscience network comprising premier universities, government research institutions and bioparks throughout the country. HUYA already has agreements in place with several of these organizations whereby HUYA has ongoing exclusive access to compounds and biologics in a variety of indications. The company is currently evaluating and following the progress of more than 500 drug development candidates. HUYA's model is based on longevity of relationships with its Chinese partners to provide a continuous source of compounds rather than a one-time single compound strategy. The ongoing exchange of expertise and data is intended to lower risk and facilitate rapid and efficient clinical development in both China and the West. HUYA currently has two Chinese drugs undergoing preclinical development in the US HBI-3000 and HBI-8000. Both drugs, for cardiac fibrillation and oncology, respectively, have successfully passed US FDA pre-IND consultations. HUYA's Innovative Co-Development Model HUYA was one of the first companies to recognize China's potential to help meet the global need for pre-clinical and clinical stage compounds for the drug development process. Leveraging the HUYA Integrated Co-development Model for partnering with Chinese research institutions and pharmaceutical companies, HUYA identifies and licenses highly promising pre-clinical and clinical stage compounds in China. HUYA's Chinese partners retain development and marketing rights in China with the expectation that both parties will benefit from the research and development collaboration. One of the key differentiators of HUYA's approach HUYA is the assembly of a highlevel team of scientific and clinical advisors for each new compound. The team collaborates with its' Chinese partners to discuss and design clinical trials as the compounds enter the U.S. development process, speeding the process and mitigating risk. HUYA's global team of advisors includes Benedict Lucchesi, MD, PhD, Peter R. Kowey, MD, Dennis Roy, MD, Jefferson L. Anderson, MD, Eric J. Topol, MD, Stanley Nattel, MD, Anthony Tolcher, MD, Alex Adjei, MD, PhD, Patricia LoRusso, DO and Michael Robertson, MD.

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"From my involvement with the cardiac fibrillation program, I have been impressed with the relationship that HUYA has forged with its Chinese partners," said Eric Topol, MD, Chief Academic Officer, Scripps Health, San Diego, CA. "HUYA's co-development model is an excellent system for developing new drugs and ultimately introducing them into the Western market."

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News on Investment Activities

Beijing Chemclin Biotech Co. received $16.5 million investment Oct 23, 2008 Beijing Chemclin Biotech Co. completed a $16.5 million Series B round that it will use to further its diagnostics reagents business. The financing was led by a new investor, China Healthcare Partnership (managed by MC China), and it included existing investors, WI Harper, Siemens Venture Capital, and SB China Venture Capital. The investment bank China eCapital advised Chemclin in the transaction. Formed in 1999, Chemclin markets radioimmunoassay (RIA) kits, ELISA and chemiluminescent (CLIA) reagents. China Launches “Mega Program” to Fund Drug Development November 9, 2008 China has instituted a mammoth new drug development program that could be worth up to $10 billion, with the goal of stimulating a first-rank, innovative drug development industry in China. The “Mega New Drug Development Program” is the first government funding program to focus solely on new drug development. Funding will be spread over a total of thirteen years with the initial 6.6 billion RMB (nearly $1 billion) going to projects that are begun from now through 2010. Medtronic Buys 15% of Shandong Wiegao; Opens JV December 24, 2008 Medtronic, Inc. has completed its equity investment in fellow medical device maker Shandong Wiegao Group Medical Polymer Company Limited. The company paid HK $1.7 billion (US $221 million) for a 15% interest in Wiegao. Following the investment, Medtronic and Wiegao have established a joint venture (controlled 51/49 by Medtronic), which will market Medtronic's spinal devices and Wiegao's orthopedic products in China.

BMP Sunstone Acquires 50% Stake in Pediatric Drug Maker December 23, 2008

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BMP Sunstone Corporation will pay 20 million RMB ($3 million) to acquire 50% of Zhangjiakou Shengda Pharmaceutical Co., Ltd. from Beijing Penn Pharmaceutical SciTech Development Co., Ltd. Eventually, BMP Sunstone intends to acquire a majority stake in Shengda. Like BMP Sunstone, Shengda focuses on the pediatric market with a special interest in antibiotics. It has SFDA approval to manufacture 76 drugs. New VC Fund to Back Biopharmas in Jilin Province December 22, 2008 Power Capital Co., Ltd. and a fund of funds in Jilin Province, Northeast China have established a 200 million RMB ($30 million) venture capital fund that will invest in pharmaceutical companies in Jilin. Power Capital also plans to set up a parallel fund for M&A and reorganization of the province's pharmaceutical resources.

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Joint Ventures JV formed between MPI Research and Medicilon January 02, 2008 US-based MPI Research and China's Shanghai Medicilon have formed a joint venture in preclinical services, as they position themselves to cash in on what is a budding market sector in China. Coined Medicilon-MPI Preclinical Research, the new venture will be based at the Zhangjiang Hi-Tech Park in Shanghai until later this year, when operations will be transferred to a new 50,000 sq. ft preclinical testing facility in the Chuansha Economic Park. Together, the two firms said they will establish a facility, expected to be fully operational by 2009, that provides both good laboratory practice (GLP) and non-GLP preclinical services including investigatory new drug (IND) enabling studies and assistance with IND submissions and new drug applications (NDAs) for the US and other regulated markets. MPI Research is one of several firms trying to forge a path for themselves in the growing preclinical contract services arena, which is dominated by Charles River laboratories and Covance. Among its clients it counts US biotech firms such as Advanced Cell Technology, whom this year it contracted with to undertake an extensive preclinical program, including pilot studies for its retinal pigmented epithelial (RPE) program designed to find new treatments for degenerative retinal disorders. However, as biopharma companies continue to migrate towards sourcing preclinical services in China, MPI Research has had its eye on a slice of the pie and has been looking for three years for the right firm with which to form a partnership in the country. There appears to be plenty of opportunity at present for firms who establish themselves in the early-phase arena to grow extensively - China is fast becoming one of the best destinations to outsource preclinical work, which is often highly specialised and difficult to perform. According to a recent Bloomberg report, China's largest preclinical services provider, WuXi Pharmatech, will this year overtake Pfizer, the world's largest pharmaceutical company, in the number of chemists it employs. ________________________________________________________________________ Page 17 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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The contract research organisation (CRO) went public four months ago and since then it has doubled in value. Meanwhile, in November, China's second largest CRO ShangPharma attracted $30m from US private investment firm TPG and is planning a growth assault to try and gain some ground on its larger domestic rival. Moreover, the country's emergence as a favourite destination for outsourcing drug development has been reflected in a flurry of activity in this field of late involving several large pharma firms including AstraZeneca, Merck & Co, Pfizer, Novartis and Eli Lilly. "The Chinese scientific community has identified this as a niche area and the government has been working to provide an environment where these studies can be conducted to the satisfaction of global sponsors and regulatory bodies so that the country can become a leader in the field', DA Prasanna, vice chairman & managing director of Manipal Acunova recently told Outsourcing-Pharma.com. The speed of studies conducted in China has also contributed to the country's appeal, as is the low cost base the country is able to offer to those partaking in the high risk world of drug discovery. According to a recent report published by the UK Trade and Investment (UKTI) department, the local Chinese industry estimates that Phase I trials can be conducted in China for around 15 per cent of the equivalent cost in a Western country, while Phase II studies cost 20 per cent of the price in the west. China also has a large and untapped domestic market which further adds to its attraction. Even so, a recent survey reveals that Western pharma companies are still largely shying away from outsourcing preclinical work to Asia. Lehman Brothers carried out the survey, and only 32 per cent of those interviewed said their companies were planning to outsource preclinical studies to Asia, and even then, nobody said they planned to do this "immediately". For those planning to shy away from Asia for the indefinite future, the biggest hurdles cited in the survey were distance, intellectual property risks, and lack of quality control in how studies are carried out. "While most respondents did not plan on outsourcing preclinical studies to Asia, there was interest, although it still remains off the horizon", said Lehman Brothers Equity Research analysts Douglas Tsao and Lawrence Marsh. For the majority of companies, it appears to be more of a long-term plan, with 30 per cent stating they would wait five years or longer; 26 per cent said 4 years; 20 per cent indicated they would wait 3 years; while only 14 per cent intended to do so in 2 years; and 11 per cent within the next 12 months.

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"Almost half indicated they expected to begin outsourcing studies to Asia within the next three years", said the analysts. "Interestingly, we suspect this roughly matches the timeline that the major US preclinical services providers are expected to begin offering [good laboratory practice] GLPcompliant testing services in China".

GSK Signs Pre-JV Vaccine Pact with Shenzhen Neptunus Interlong November 21, 2008 GlaxoSmithKline and Shenzhen Neptunus Interlong Bio-Technique Co. Ltd. (NIBT), an established vaccine manufacturer in China, will work together to develop flu vaccines for the China market. The two companies have signed a formal Cooperation Agreement that will lead to the formation of a JV company with $78 million of assets, if certain undisclosed conditions are met. Shinva and GE Healthcare Form Medical Device JV December 29, 2008 Shinva Medical Instrument and GE Healthcare will form a medical device JV, called Xinhua GE Medical Systems, with a total investment of $25 million. The new company will focus on diagnostic X-ray equipment and be involved in R&D, manufacturing and sales. It will also develop additional equipment and software. Under the agreement, Shinva will hold a 51% stake of the new company, and GE will hold the remaining 49%.

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Alliances European CRO joins first Chinese CRO alliance February 21, 2008 Europe's Novasecta has formed an alliance with Chinese contract research organisations (CROs) Sundia Meditech and HD BioSciences to provide their R&D services to European mid-sized biopharma firms. To date, the rapidly-growing trend of outsourcing drug discovery work to CROs in China has been largely driven by the large global pharma firms. In Europe, NovaSecta is a specialist R&D service provider for smaller to mid-sized Businesses and the firm said it is now time for European pharmaceutical and biotech companies "to make use of the scientific skills, creative talent pool, flexible resourcing and cost-effectiveness that many global big pharmas already take for granted in China". "This alliance is therefore a natural step in Novasecta's evolution as an R&D services company". Its two new partners, Sundia Meditech and HD BioSciences have already been working together in China since May 2007, when they formed the country's first CRO alliance so that they could expand their range of services to better serve clients worldwide, while still minimising cost. Robert Thong and John Rountree, NovaSecta's co- founders and managing directors, said that they selected these two Chinese firms to work with in particular, "based on their professionalism and track record in repeatedly delivering drug discovery solutions to their US and multinational clients". With the Chinese CRO market continuing to develop as it has been, we can expect to see more and more of these types of domestic and western alliances formed in the country, with the aim offering international clients better access to quicker and cheaper preclinical services from within China. Only last month, US-based MPI Research and China's Shanghai Medicilon formed a joint venture to provide preclinical services in China. Together, the two firms said they will establish a facility, expected to be fully operational by 2009, that provides both good laboratory practice (GLP) and non-GLP preclinical ________________________________________________________________________ Page 20 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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services including investigatory new drug (IND) enabling studies and assistance with IND submissions and new drug applications (NDAs) for the US and other regulated markets. The country's emergence as a favourite destination for outsourcing drug development has been reflected in a flurry of activity in this field of late involving several large pharma firms including AstraZeneca, Merck & Co, Pfizer, Novartis and Eli Lilly, who have also established bases there. "The Chinese scientific community has identified this as a niche area and the government has been working to provide an environment where these studies can be conducted to the satisfaction of global sponsors and regulatory bodies so that the country can become a leader in the field', DA Prasanna, vice chairman & managing director of Manipal Acunova recently told Outsourcing-Pharma.com. The speed of studies conducted in China has also contributed to the country's appeal, as is the low cost base the country is able to offer to those partaking in the high risk world of drug discovery. The new alliances now being forged between western and Chinese firms are opening the door for the western firms who do not have the scale and resources that the big pharma firms do, to now also start taking advantage of what China has to offer.

Provid and Acesys Form US-China Medicinal Chemistry CRO Alliance Sep 8, 2008 Provid Pharmaceuticals of New Jersey and Acesys Pharmatech of China have formed a US-China CRO alliance. The new group puts together Provid’s US-based drug discovery expertise and project management capabilities with Acesys’s China-based medicinal chemistry resources and favorable cost structure. According to the announcement, the alliance will offer all aspects of medicinal chemistry for pharmaceutical and biotech clients.

Tigermed, OCT and LSK to set up global trials network November 22, 2008 Chinese CRO Tigermed Consulting has teamed up with Russian and South Korean counterparts OCT and LSK to establish a global clinical trials network and expand its geographic footprint.

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Saint Petersburg-headquartered OCT, conducts clinical studies in Russia, Ukraine and other Eastern European countries while Seoul-based LSK carries out equivalent work in Korea, Japan, Taiwan and Malaysia. Tigermed, one of the largest contract research organisations (CRO) in China, hopes that the strategic alliance will help it expand its capacity and territorial client base and provide a network from which it can further its penetration into the lucrative European and US trials markets. Company vice president Cao Xiachun said that: "By forming these strategic alliances, Tigermed takes the pioneering position in exploring business potential and achieving breakthroughs in global service capabilities through cross-border cooperation, which is a significant move for China's CROs.” She explained that: “Strategic collaboration is one of our important tactics to expand global business, and this type of partnering becomes an essential part of our international strategy." Chinese trial firms set to dominate sector? Clinical development has long been a strength of the Chinese outsourcing sector, in contrast with India where manufacturing dominates. This situation may polarise further if, as is expected, India places further restrictions on research after a recent series of high profile problems with studies conducted in the country. Earlier this month a report by the Campaign for Fighting Diseases, part of the UK-based International Policy Network, raised this point by suggesting that removing support for India’s emerging clinical trials industry would be a mistake. "Although it is not clear if the clinical trials were culpable, should the inquiry suggest new regulations, the real winner will be the Chinese economy rather than Indian patients," commented the report's authors, Philip Stevens and Julian Harris.

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Acquisition

WuXi PharmaTech makes its first acquisition January 07, 2008 WuXi PharmaTech, China's contract research titan, has orchestrated its first acquisition, gaining biologics capabilities and a base in the US. The firm has agreed to pay $151m for US-based AppTec Laboratory Services in addition to taking on $11.7m of AppTec's debt. The transaction already has the approval of all required parties and is expected to close in the first quarter of 2008. AppTec offers contract testing, research and development, and biologics manufacturing services from FDA-registered facilities in Philadelphia and Atlanta and WuXi PharmaTech said its chemistry services will be complemented by AppTec's biologics testing and manufacturing capabilities to create a "broader and deeper scope of services". In addition, the firm said that AppTec brings "established customer relationships with many leading pharmaceutical, biotech and medical device companies in the US and around the world". Dr Ge Li, WuXi PharmaTech chairman and CEO, said the purchase was a step towards its goal of becoming a "global R&D outsourcing leader". A company spokesperson indicated that further acquisitions may be on the cards in the near future. To date, WuXi PharmaTech has only employed a strategy of organic growth, however, after going public four months ago it has doubled in value and is now in a position to begin spreading its tentacles beyond China's borders. With its global expansion plans it may also be planning to take on the US-based contract research organisations (CROs) who are setting up operations and/or establishing business partnerships in China and in doing so, encroaching on its market share. China has been actively trying to create a name for itself in the preclinical arena and is fast becoming a popular destination to outsource preclinical work, which is often highly specialised, difficult to perform and costly. According to a recent Bloomberg report, WuXi Pharmatech, China's largest preclinical services provider, will this year overtake Pfizer, the world's largest pharmaceutical company, in the number of chemists it employs - currently the number sits at 2100.

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The annual cost of a Chinese scientist is around $30,000 a year - a saving of up to ninetenths on hiring a US scientist, according to a report by Jinsong Du, a health-care analyst with Credit Suisse in Hong Kong. NeoStem buys its way into China November 04, 2008 NeoStem has agreed to acquire China Biopharmaceuticals Holdings in an attempt to capitalise on the manufacturing and marketing opportunities in the nation. The deal will see NeoStem take a 51 per cent controlling interest in Suzhou Erye Pharmaceutical, a subsidiary of China Biopharmaceuticals, which produces over 100 drugs on seven good manufacturing practice (GMP) compliant lines. NeoStem’s business is currently focused on the collection, research and development of stem cells, with the acquisition marking its first venture into small molecules. Robin Smith, CEO of NeoStem, said: "We are excited about our collaboration with Suzhou Erye Pharmaceutical Co Ltd as it will open new markets, distribution channels and capabilities for production of stem cell related products in the world's fastest growing economy." Eyre is currently undergoing a three-year expansion plan, which is intended to add additional manufacturing capacity and enhance revenues and profits. Madame Jiang, general manager at Eyre, said that the deal with NeoStem would enhance the company’s pipeline and give it access to new technologies. The deal is expected to be closed in the first calendar quarter of 2009. NeoStem aims at Asia In a further attempt to gain a foothold in the Asian market, NeoStem has agreed to acquire Beijing HuaMeiTai Bio-technology and its holding company. NeoStem is particularly keen to capitalise on the contracts HuaMeiTai has with the Shandong New Medicine Research Institute of Integrated Traditional and Western Medicine. Shandong is a provider of regenerative medical therapies in China, with NeoStem believing it can use this distribution channel to get its products to market in the nation. In addition NeoStem and Shandong are looking to collaborate on new technologies, in particular very small embryonic-like stem cells (VSELs). NeoStem has a worldwide exclusive license for the identification and isolation of VSELs.

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Smiths Group Buys China Device Maker November 28, 2008 Smiths Group of London (LSE: SMIN), an engineering conglomerate that includes Smiths Medical, a medical device division, has acquired Zhejiang Zheda Medical Instrument (ZDMI). Based in Hangzhou, ZDMI makes syringe pumps and enteral feeding devices primarily for the Chinese market. Last year, ZDMI reported sales of 73 million RMB ($10.7 million). The purchase price was not disclosed. Frontage deal bolsters PRA’s lab services business December, 8, 2008 Contract research organisation PRA International has signed an agreement with fellow US firm Frontage Laboratories to expand the range of laboratory services it can offer to its clients. The CRO has joined a number of its peers in broadening the portfolio of services offered in order to provide a comprehensive suite that can attract large drugmakers wishing to find a ‘one-stop-shop’ for trials. It already operates a comparable full-service offering in Europe and is bringing its North American operations into line. PRA said the deal would allow its US Clinical Pharmacology Center, part of the PRA Early Development Services business, to offer “a full complement of analytical lab testing services to its existing Phase I - IV clinical trial services in North America.” In the bioanalytical area, Frontage specialises in method development and validation, biological sample testing, synthesis and characterisation of reference standards and metabolites, as well as pharmacokinetic testing and bioequivalence studies. The company operates a bioanalytical and biomarker research centre in Malvern, near Philadelphia, that houses 17 mass spectrometers and other instrumentation. The company’s CEO, Song Li, said that the firm can now will offer specialised bioanalytical services through PRA’s customer network. The aim is to build “a collaborative relationship with PRA that not only streamlines project execution but also places a strong emphasis on project management," he said. PRA said Frontage’s services will complement the activities of PRA’s 80-bed Lenexa clinical facility near Kansas City, Missouri, which runs a multitude of Phase I and Phase IIa studies each year, with a particular focus on first in human studies and other complex pharmacokinetic studies.

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The new collaboration also offers pharmacokinetic and biostatistical consultancy and data support (including data management, biostatistical and PK/PD analysis and ICHcompliant report writing). The firm said it “now offers pharma and biotech sponsors and other CROs the ability to align the clinical and laboratory processes, thus saving time by avoiding unnecessary clinical trial delays.” Bigger in Germany Meanwhile, PRA has also added another office in Munich, Germany, as it continues to tap into the European contract research market. This is PRA’s third office in Germany, a country which was home to the first European branch of PRA, established in Mannheim 27 years ago. Earlier this year the company relocated some of its German operations into a facility in Berlin that at the time tripled the size of the previous site, on the back of what it described at the time as “exceptionally fast” growth in its European Phase I trials business.

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News on Drug Discovery Service

J&J signed another contract deal with WuXi PharmaTech October 20, 2008 Johnson & Johnson has tapped Chinese WuXi PharmaTech for additional R&D services, following the trend towards high-level, strategic collaborations between drugmakers and contract research organisations. Under the terms of the new agreement WuXi Pharmatech will provides Janssen Pharmaceutica, part of J&J’s Pharmaceutical Research & Development division, with integrated research services in the area of discovery chemistry, discovery biology, chemical and analytical development services, formulation, and preclinical and bioanalytical services. Previously, WuXi was supplying only discovery chemistry services to J&J, so the expanded agreement represents a significant hike in the scale of their collaboration, and reaffirms the value that the larger CROs can accrue by developing a broad, integrated service portfolio. The terms for the new contract and indeed the previous one have not been disclosed. Recent weeks have seen other examples of wide-ranging collaborations between CROs and drugmakers, in keeping with the shift from tactical to strategic outsourcing. Perhaps the most notable is Covance’s $1.6bn agreement with Eli Lilly, which also signed major deals with Quintiles and 3i at the same time as part of a major shift into outsourcing. Others include Novartis’ long-term relationship with Lonza for development and manufacture of biopharmaceutical candidates. Dr. Ge Li, chairman and CEO of WuXi PharmaTech, said, "”Our partnership demonstrates the strength of our innovation driven and fully integrated R&D service platform." The expansion of the deal comes after a rocky patch for WuXi. A collaboration with Covance that would have seen the companies partner on preclinical services collapsed earlier this month. Meanwhile, WuXi recently downgraded its earnings projections for 2008 after saying that it had experienced delays or cancellations in contracts from small biotech companies.

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News on Preclinical Research Service China become a hot place for preclinical services May 07, 2008 China's preclinical services providers are beginning to carve a niche for themselves on the global stage, buoyed by the growth of the domestic market. China's pharmaceutical industry, which holds vast potential but remains largely untapped, is finally waking up, growing 30 per cent a year between 2000 and 2005 to reach $3bn, compared with a 19 per cent annual growth rate for the pharmaceutical industry as a whole. According to a recent article in Nature Biotechnology, titled: "Chinese health biotech and the billion-patient market", as the domestic market continues to evolve, several Chinese companies that were founded with a pure research and development (R&D) business plan have recognised that to stay afloat they needed to adopt a new plan, one that would offset risks and costs and increase in-house capabilities. Hence the country's preclinical outsourcing industry was born. Many of these companies are now relying on contract services to generate revenues and remain competitive. The services they now offer range from early-stage research and preclinical development, to the clinical services and manufacturing aspect of the business also. WuXi PharmaTech, ShangPharma, Shenzhen Chipscreen Biosciences, HD Biosciences, CapitalBio, Fudan-Yueda Bio-Tech and SinoGenoMax are among the dominant contract research organisations (CROs) that have sprung up over the years. As firms such as these have gained experience they are now drawing interest form international firms who are eyeing China's cost-efficiency of developing drugs compared with the west, resulting from the low-cost scientific talent, clinical trials and raw materials available in the country (with a lowest estimate of 10 per cent of the cost of similar expertise in the US). Now these Chinese services firms are beginning to take their businesses a step further having gained the world's attention, they are recognising that their experiences with domestic regulatory agencies and markets are valuable to international clients, and they are using this knowledge in their business plans, according to the Nature article.

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Assistance in drug registration with Chinese regulatory agencies, such as those offered by Shanghai Genomics; and market consultation and clinical evaluations according to Chinese State Food and Drug Administration (SFDA) requirements as offered by Beijing Wantai are examples of expanding realms of service. China's largest preclinical services provider, WuXi PharmaTech, is at the forefront of this movement, being one of the first Chinese companies to market itself internationally as a pure service company. With over 1,000 employees, it is one of the country's largest biotech firms and provides services to support new drug discovery and the chemical development of new drug candidates. The company is in the midst of expanding its capabilities into preclinical toxicity, animal studies, bioassays and plant formulations, with the aim of becoming a fully integrated services company. According to the Nature article, WuXi PharmaTech's chairman and CEO, Ge Li, credits the company's success to an innovative approach both to operations and project management and to diligent protection of its clients' intellectual property (IP). Ensuring protection of clients' IP "is the lifeblood for a company like ours", he said. Meanwhile, international partnerships for innovation are also on the rise in China, with foreign biotechs increasingly forging new alliances with Chinese services firms. In January this year, US-based MPI Research and China's Shanghai Medicilon formed a preclinical services joint venture in China and in February, Europe's Novasecta formed an alliance with Chinese CROs Sundia Meditech and HD BioSciences to provide their R&D services to European mid-sized biopharma firms. Alongside this, the Chinese government is strongly encouraging foreign companies to develop their products in the country. In addition, investment in Chinese CROs by foreign firms is also on the rise, as witnessed by an increasing incidence of such deals over the past couple of years. For example, in January, China's NovaMed Pharmaceuticals secured $13.8m in Series B Funding from international investment firms Fidelity Asia Ventures and Fidelity Biosciences, and in November 2007, China's second largest CRO ShangPharma attracted $30m from US private investment firm TPG. After searching all over the world, Bridge eventually landed in China January 22, 2008

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Bridge Laboratories will bolster its China operations again after scoring itself a further $18m worth of venture capital funding. The money will be put towards expanding its toxicology lab in Beijing, in addition to further growing its US operations, which consists of a headquarters in California and a facility in Maryland. In a statement, the company said that the funding will also provide it with the flexibility to consider acquisitions that would enhance its facilities or capabilities. Bridge was asked by Outsourcing-pharma.com to elaborate on the nature of its latest expansion plans but failed to do so. The firm's strategy involves delivering preclinical services in China at "significant savings", while providing a US-based service for clients that prefer this option. As such, it has been making ongoing efforts to enhance its China capabilities and this is the third round of funding the company has received, bringing the total to $57m. $35m of this was raised in February last year, also to accelerate growth of its preclinical operations in China, part of which involved constructing a second vivarium. Bridge claims to now operate the largest vivarium and US-level compliant pharmaceutical drug testing lab in the country. At the time, the firm had also recently completed the acquisition of the Preclinical Division of Gene Logic, which was also funded by the cash injection. China is growing in popularity as a destination for outsourcing stages of the drug development process and in the preclinical arena it is particularly attractive due to the country's efforts of late to specialise in the field, and the low costs involved. Bridge has to compete for business in the country with domestic rivals WuXi PharmaTech and ShangPharma that are also attracting new investment and new business and growing larger by the month. In February last year the firm launched a new training scheme between its facilities in the US and China to enable its employees to cross train in both labs - a potential competitive advantage for a contract research organisation (CRO) in China. "The first thing that any prospective client looks at is our training records so the advantage is critical," Glenn Rice, Bridge's (former) CEO, told Outsourcing-Pharma.com at the time. The Visiting Scholar Programme offered by the company was the first of its kind in the preclinical CRO industry and the company then claimed to be the only pre-clinical CRO to develop drugs to US level standards in Asia. ________________________________________________________________________ Page 30 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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Charles River accelerates China plans; reports profit jump February 19, 2008 Charles River Laboratories has reported another profit jump in its Q4 2007 financial results and has also stepped up its China plans as the demand for its preclinical services in the country are said to be "robust". In an analyst call related to its fourth quarter results, Jim Foster, company president, chairman and CEO said that it is now speeding up its facility expansion programme in China, where it is constructing a new 50,000 square foot laboratory, and is expecting to begin offering good laboratory practice (GLP) preclinical services from the country by the middle of this year instead of the first quarter of 2009. Charles River has been operating in China since mid 2007 when it forged a joint venture with a local firm Shanghai BioExplorer, which it later actually acquired. Interestingly, Foster insists that to date, the company is not seeing its business in China coming from international customers who are offshoring the work to them in a bid to save money. Foster clarified that its customer base is not domestic Chinese drug firms either. Instead, the preclinical services the company performs in China are "to support the clients that we have elsewhere in the world", in North America and in Europe, but whom also have a base in China. These firms seek them out for services on discoveries that are made locally, "where they're going to want a preclinical task force locally as well", said Foster. Meanwhile, for the fourth quarter of 2007, the contract research organisation's (CRO's) sales increased 17 per cent to $318.0m from $271.7m in the comparable 2006 period. Operating income grew to $52.1m, up from 45.2m in the previous year, as did pre-tax profit which came in at $51.1m compared to $44.5m. Charles River attributed the profit gains primarily to the higher sales. Sales for the Research Models and Services (RMS) segment were $145.2m in the fourth quarter of 2007, an increase of 13.7 per cent from the fourth quarter of 2006. At the same time the segment's operating margin increased 1.5 percentage points to 27.1 per cent. "Sales growth was driven by strong demand for research models in the United States and Europe, worldwide Transgenic Services, and In Vitro products", the firm said. In the CRO's slightly larger Preclinical Services (PCS) unit, fourth quarter sales climbed 20 per cent year-over-year to $172.9m. "Continuing strong demand for general and specialty toxicology services from pharmaceutical and biotechnology customers" was the primary factor which contributed to the sales growth. ________________________________________________________________________ Page 31 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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However, the segment's operating margin simultaneously declined 2.9 percentage points to 16.0 per cent. "As expected, the additional costs associated with the transition to the new preclinical facilities in Massachusetts and Nevada and the negative impact of foreign exchange in Canada resulted in lower operating margins for the PCS segment", the firm said. Looking forward, Charles River said it plans to boost its workforce by around 800 employees during the year - equivalent to an increase of around 10 per cent. Immtech joins the China club July 1, 2008 Immtech Pharmaceuticals has become the latest in a string of western research and development services firms to announce a partnership with a peer in China in a bid to get a foothold in this market of vast potential. The US company has signed a Memorandum of Understanding (MoU) with Beijing Capital Medical University (BCMU) in Beijing, one of China's leading academic medical research centres, to form a joint venture later this year that will provide a range of preclinical contract research services in the country on behalf of international biopharma firms. "As the world's most rapidly expanding market for healthcare products, China is poised for explosive growth in research in the years ahead, especially related to early stage drug discovery," said Mr Guo, director of BCMU Resource Management Center. Specific services will range from research planning and risk assessment through to preclinical and clinical study design. "By combining our complementary resources and expertise, we will deliver high-quality research services that will help companies to reduce the time and costs associated with drug discovery," said Eric Sorkin, chairman and CEO of Immtech. Eventually there is a plan in place to move the scope of services offered beyond the initial focus of on early-stage drug discovery, to include the support of later-stage clinical development, Sorkin explained. This will include coordination with research sites, data management, monitoring and reporting for clinical research programs, as well as providing counsel related to clinical research regulatory guidelines and regulatory review procedures in China. There have been a number of pairings of international companies with preclinical services enterprises in China of late, as a number of domestic firms have been building up ________________________________________________________________________ Page 32 of 55 JZMed, Inc. (www.jzmedi.com) 2/8/2009

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their experience in this area and are now drawing interest form international firms who are eyeing China's cost-efficiency of developing drugs compared with the west, resulting from the low-cost scientific talent, clinical trials and raw materials available in the country (with a lowest estimate of 10 per cent of the cost of similar expertise in the US). In addition, international firms are recognising the value that Chinese firms can offer in terms of their familiarity with the domestic regulatory agencies and markets. Alongside this, the Chinese government is strongly encouraging foreign companies to develop their products in the country. Only last week China's top contract research organisation (CRO) WuXi PharmaTech formed a joint venture with its US-based peer Covance, in a deal which will create a powerhouse in drug development services. The 50-50 joint venture has been created to "provide world-class preclinical contract research services in China" as the companies look to capitalise on the rise in outsourcing. In January this year, US-based MPI Research and China's Shanghai Medicilon formed a preclinical services joint venture in China and in February, Europe's Novasecta formed an alliance with Chinese CROs Sundia Meditech and HD BioSciences to provide their R&D services to European mid-sized biopharma firms. WuXi broke planned deal with Covance October 6, 2008 The much-trumpeted partnership between China’s WuXi PharmaTech and Covance to provide ‘world class preclinical research services’ has been called off. At the time the deal was announced back in June questions were raised about the deal from WuXi’s perspective. Although the companies had said one of the benefits was to broaden WuXi’s client base, the Chinese company has been doing spectacularly well of late in attracting clients on its own. For Covance the benefits were more straightforward, with the JV providing it with a foothold in China, with the inherent benefits of lower wages and higher margins the nation can bring. The JV was intended to be run out of a 323,450 sq. ft. facility which is currently being constructed by WuXi in Suzhou, China, and is due to be completed in 2009. Neither company was prepared to give a reason for the decision, although both issued statements asserting their ability to compete in the preclinical services segment in China.

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WuXi insisted that it would press on with the construction of the facility and “plans to offer a full-range of preclinical services and GLP toxicology capabilities ... helping WuXi clients to improve the success of discovery and shorten the time of development.” Dr Ge Li, WuXi’s chairman and CEO, said the facility was being built through alreadybudgeted capital expenditures and will not require additional funding. He added that the move would allow WuXi’s shareholders to receive “maximum benefit”, which might suggest that some were unhappy about signing away 50 per cent of the profits from the facility. For its part, Covance said it had decided to “pursue its original preclinical strategy in China.” In an equally combative statement, the CRO said it would build its own “world-class preclinical facility in the region and aggressively compete as the global market leader in a business we know very well.” The firm added that it would build the same array of preclinical services that it already offers in Europe and the US, and that these would complement its existing Phase II/III clinical development, central laboratory and bioanalytical capability in China. There is also speculation that the firm's priorities have changed in the wake of its strategic $1.6bn alliance with Eli Lilly. The question now is whether WuXi can do as well on its own as it would with Covance’s help. Dr Li seems convinced, arguing that the firm already has relevant expertise and capability in place as a result of its $151m acquisition of US firm AppTec Laboratory Services.

Charles River opens preclinical centre in Shanghai October 16, 2008 Charles River Laboratories has opened a new preclinical development facility in Shanghai, China which, the firm says, will act as a centre of excellence and help strengthen its position in the global outsourcing market. The new 60,000 square foot site is designed to serve both the emerging Chinese and global drug sectors and is compliant with rules laid down by the US Food and Drug Administration (FDA), the Chinese state regulators (SFDA) and the Organization for Economic Cooperation and Development (OECD). The US Association for Assessment and Accreditation of Laboratory Animal Care (AAALAC) and the Canadian Council of Animal Care (CCAC) have also approved

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operations at the site, enabling it to carry out the full range of preclinical development work. The Shanghai site is expected to begin providing good laboratory practice (GLP) accredited development services in the first quarter next year. James Foster, Charles River’s CEO, commented that: “As our clients make their initial forays into China, we are creating a centre of excellence that embodies global best practices along side them. “The same high standards of research, safety, humane care and good laboratory practices that globally distinguish Charles River are replicated [at the] facility,” added Foster. In a press statement the company also laid out its belief that China’s emerging drug market will see the country evolve into a key innovation hub for the global pharmaceutical industry in the coming years. Charles River said that its new base “will help foster this culture by helping multinationals as well as local biopharmaceutical organizations accelerate their drug development programmes”. While some emerging pharmaceutical markets like India and Southeast Asia have focused on providing manufacturing rather than development capacity, in China the preclinical and trial sectors are already quite well established. A recent Ewing Marion Kauffman Foundation report, “The globalization of innovation: Pharmaceuticals” which was published earlier this year, concluded that part of the difference lies in the fact that Chinese scientists are developing the ability to innovate due to the influx of R&D from big pharma that has taken place in recent years. As a result there is considerable and growing demand for preclinical services in the country. Further evidence for this is indicated by WuXi Pharmaceuticals decision to press ahead with the development of a preclinical facility despite the withdrawal of partner Covance.

Covance plans for preclinical in China October 27, 2008 Covance has given more details of its plans for China, with CEO Joe Herring suggesting there will not be a big shift in work from the US and Europe to the nation. This idea is underpinned by Herring’s belief that there will be “large equilibrium in labour rates”, which would reduce the appeal of operating in China.

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Despite this Covance is still pursuing its expansion into China, following the temporary blip resulting from the collapse of the deal with WuXi. In the second half of 2009 Herring predicts that multi-nationals will start to want to conduct work in animal models in China but is unconcerned by Covance’s likely inability to fulfill these needs. This is in part due to the sums of money involved, with Herring referring to two leading pharmaceutical companies that were both seeking to take out $300,000 to $400,000 preclinical contracts in China late next year. Owing to the scale of these contracts Herring said Covance will not be making a “massive investment” in China and will look to grow as the market grows. The intention now is to have the preclinical site operational around 2011, which would add to Covance’s current capacity in China. While admitting that “it would be great if [Covance] had a facility online” by late 2009, Herring remained confident that if Covance has preclinical space in China by 2011 the company “will do fine” in the nation. Land is yet to be purchased for the preclinical facility, which Covance claims will be a match for the standards in its US and European sites. PharmaLegacy Opens facility in China Oct 27, 2008 PharmaLegacy Laboratories Co., Ltd held its Grand Opening in Shanghai’s Zhangjiang Hi-Tech Park. The CRO, which offers specialty pre-clinical pharmacology services, has expertise in the areas of oncology, bone, orthopedics, inflammation, immune disease, and PD/PK. PharmaLegacy is founded by a group of experienced veterans who boast a lot of experience in pharmacology in three major disease areas, oncology, bone and inflammation/immune diseases. PharmaLegacy began renovating its Shanghai office space in April, started recruiting in May, moved in during July, and held its Grand Opening in October. The company is now fully operational and starts in self-sustaining mode. It has been validating its models for 3 months, and as a result, the company’s model validation is now 80% complete. The company now has 60 employees, 45 of them researchers. The company hopes to have 85 employees by year end.

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PharmaLegacy’s execution is GLP based, though the company doesn’t plan to claim GLP until it is audited. As an added plus, PharmaLegacy is the first company in China to install BioBook® (from IDBS in the UK) as its data management tool. In the BioBook system, every researcher has a seat license and must log into the system. All measurements are electronically input automatically. This means data cannot be manipulated, and all data can be traced back. Because only the people working on project can access the data, BioBook also protects IP. PharmaLegacy is backed by Latona Associates, a private equity company in the US. At one time, Latona owned Fisher Scientific Company, which it sold to Thermo Electron.

Pfizer now use WuXi PharmaTech for preclinical research November 07, 2008 SHANGHAI, China, Nov. 7 /Xinhua-PRNewswire/ -- WuXi PharmaTech (NYSE: WX), a leading pharmaceutical, biotechnology and medical device research and development outsourcing company with operations in China and the United States, announced today that it has signed a new three-year, in vitro ADME collaboration agreement with Pfizer. WuXi PharmaTech has enjoyed a close and cooperative relationship with Pfizer for many years, with collaborations ranging from synthetic chemistry, parallel medicinal chemistry (PMC), and ADME to bioanalytical services. "This new agreement further strengthens our already productive relationship with Pfizer, one of our largest customers for many years, and it is the direct result of our research capability and firm commitment to quality and customer satisfaction," commented Dr. Ge Li, Chairman and Chief Executive Officer of WuXi PharmaTech. Under the new collaboration agreement WuXi PharmaTech in partnership with Pfizer will establish ADME assays to provide in vitro screening services on compounds WuXi PharmaTech synthesizes for Pfizer. "A high quality and flexible Asia R&D partnership network is critical to Pfizer's emerging market and Asia strategy. We want to build strong relationship with leading Contract Research Organizations such as WuXi PharmaTech to tap into the scientific talents and R&D capabilities in Asia," commented Dr. Steve Yang, Vice President and Head of Asia R&D at Pfizer. The evaluation of ADME properties is a key step in the drug discovery and development process. WuXi will evaluate ADME properties for Pfizer compounds with the goal of providing this key information to assist Pfizer scientists to improve the pharmacokinetic properties of their compounds.

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WuXi PharmaTech Shanghai Rodent Facility Awarded AAALAC Accreditation December 18, 2008 SHANGHAI, China, Dec. 18 /PRNewswire-Asia/ -- WuXi PharmaTech (NYSE: WX), a leading pharmaceutical, biotechnology and medical device research and development outsourcing company with operations in China and the United States, announced today that its rodent facility in Shanghai has received accreditation from the Association for the Assessment and Accreditation of Laboratory Animal Care (AAALAC) International. AAALAC International is a private, nonprofit organization that promotes the humane treatment of animals in science through voluntary accreditation and assessment programs. As a result of an extensive on-site evaluation, AAALAC determined that WuXi PharmaTech's rodent facility is committed to the highest level of animal care and research practices. AAALAC noted the following in its official approval letter: "The WuXi PharmaTech China management and staff are commended for providing good facilities and programs for the care and use of laboratory animals. Especially noteworthy were the strong institutional commitment to the animal care and use program; the conscientious and capable Institutional Animal Care and Use Committee (IACUC); the knowledgeable and experienced animal care and use staff; excellent documentation (Standard Operating Procedures and guidelines) and records; and a well maintained, state-of-the-art facility. The attention to detail and completeness was exceptional." "The AAALAC accreditation comes as a result of our efforts in expanding service capabilities from chemistry to preclinical drug development including drug metabolism (DMPK) Ge Li, Chairman and Chief Executive Officer of WuXi PharmaTech. "We are pleased to receive such high praise from the leading independent world body on the care and use of laboratory animals and we could not be more proud of the report issued by AAALAC. We are confident of being at the top of our industry with the endorsement of AAALAC." BioDuro Labs Accredited by AAALAC December 11, 2008 BioDuro, a CRO headquartered in San Diego, CA, but with its laboratories in Beijing, China, announced that it has been awarded full accreditation from the Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC). The same accreditation has been given to the labs of the National Center for Safety Evaluation of Drugs (NCSED), with whom BioDuro has an exclusive collaboration.

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News on Clinical Research Service

Asian CROs poised for substantial growth April 3, 2008 The Asia Pacific region is poised to witness heightened activity in terms of outsourced drug development to contract research organisations (CROs), with India and China remaining the preferred destinations. Recent estimates by Frost & Sullivan have determined that Asian CROs conducting Phase I-IV research earned revenues of $1.2bn in 2006, with the figure expected to reach $2bn in the next two years. This ties in with a report by market research firm Research and Markets, where it was predicted that outsourcing spending by biopharma firms across all phases of pharmaceutical development is projected to increase in Asia in the next one to two years, with the quantum of increase for phase II, phase III, and phase IV trial budgets likely to be higher than preclinical and phase I budgets. Meanwhile, the report also found that over the next two years, urology and musculoskeletal/arthritis are expected to be the most outsourced research areas. "The potential for CROs lies in expanding their strengths in musculoskeletal/arthritis and urology and maintaining capabilities in oncology, cardiovascular, dermatology, and gastroenterology", the company said. In India, outsourcing largely takes place between Phases II-IV, and interactive voice response systems (IVRS) as well as medical diagnostics are the services that are outsourced the most. The country's low cost base, large treatment naïve patient pool, and command of English are the major attractions here. While cardiovascular, central nervous system (CNS) and metabolic diseases are the research areas that are currently the most outsourced, oncology is likely to show an increase in outsourcing in the next two years, predicted Research and Markets. Meanwhile, Australia, Taiwan, Hong Kong, and to a lesser degree, South Korea and Japan, are among the other countries in the Asia Pacific tipped by Research and Markets to experience an increase in the number of CRO-conducted clinical trials.

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With regard to Japan, South Korea, and Australia, diseases affecting the CNS are likely to be among the most outsourced research areas, with Japan also likely to attract studies in the additional therapeutic areas of allergy/respiratory, pain management, and dermatology. The report is titled: "Contract Research Organization Market - What Pharmaceutical and Biotechnology Companies Want." China to benefit if India tightens clinical trial rules November 17, 2008 A UK development think-tank has warned against a knee-jerk reaction against conducting clinical trials in India, following the revelation a few weeks ago that dozens of children had lost their lives in studies conducted at a contract research facility. The Campaign for Fighting Diseases, part of the UK-based International Policy Network, says in a report that to remove support for India’s emerging clinical trials industry would be a mistake. "Although it is not clear if the clinical trials were culpable, should the inquiry suggest new regulations, the real winner will be the Chinese economy rather than Indian patients," write the report's authors, Philip Stevens and Julian Harris. They suggest that even if wrongdoing is uncovered, the fault will lie in the enforcement of existing regulations, rather than a need to implement new laws. There were 49 infant deaths reported from trials at the All-India Institute of Medical Sciences in New Delhi. Because contract research is conducted at AIIMS for pharmaceutical companies, the deaths have caused some to question the safety and morality of multinationals conducting clinical trials in India. Health minister Anbumani Ramadoss is pushing for a government inquiry into the matter, to ensure that poor people are not used as “guinea pigs.” There is no question that India is a very attractive location for clinical trials, as it has a fast-developing medical infrastructure, and a huge population which has little exposure to pharmacological treatments and is motivated to take part in studies. In addition, there is a large number of English-speaking physicians and scientists – and faster data processing times. With India already a global powerhouse in pharmaceutical manufacturing, initially focusing on chemical ingredients but latterly moving into secondary production, observers believe it is only a matter of time before a satellite clinical research industry

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becomes established. Consultancy company McKinsey predicts the sector will be worth $1.5-$2bn by 2010. One of the key drivers for that is the estimated 60 per cent saving on the expense of running a study in India compared to the USA, where a typical trial costs upwards of $150m. That provides a clear cost-incentive to the industry. Regulations have already been tightened up to improve standards in clinical research, as part of a wide range of drug industry legislative reforms that came into effect in 2005, bringing the country into line with standards drawn up by the World Health Organization and the International Conference on Harmonization. Any attempt to add further regulatory restrictions could incite clinical trial firms to shift their attention to China, as well as potentially reduce the number of new medicines becoming available to Indian patients. “In 2007, the consulting firm AT Kearney ranked China above India as the most attractive location for clinical trials,” according to the report’s authors. “Like India, it has a vast pool of patients, ethnically distinct groups and a growing respect for intellectual property.” PPD initiates central lab services in China January 31, 2008 Pharmaceutical Product Development (PPD) has initiated central laboratory services in China in response to the country's budding clinical trials scene. The US-based contract research organisation (CRO) has formed an exclusive agreement with Peking Union Lawke Biomedical Development Limited (PUL) that has allowed it to "begin immediately" providing its central lab services to biopharma firms in the country. The firm currently has other central labs in Brussels, Belgium and Kentucky in the US and said that China's attractiveness lies in the fact that it is a "high-growth clinical research market." PPD, along with several other global CROs already currently run clinical trials in China. Agostino Fede, director of PPD's global central labs operation said that the presence of a central lab in China will also save its clients time and money by providing lab results "more quickly without incurring expenses for exporting shipments." "Chinese law makes it extremely difficult to export lab samples to other countries for testing," said Fede.

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It also saves our clients time and money by providing lab results "more quickly without incurring expenses for exporting shipments." PPD is not the only CRO to have this idea. Its larger rival Quintiles also expanded its Global Central Laboratories and Clinical Development Services units in china (Beijing) earlier this month. Under PPD's new arrangement, the firm will also operate the new lab services from a base in Beijing, where the country's largest life sciences park is located, having invested in lab equipment on site that is "identical" to that of its other two central labs. The firm said that its new China central lab will be networked with PPD's in-house computer system and after completing a number of cross-validation and quality assurance measures, it is expected to deliver laboratory data that are "directly combinable." PPD, as with many of the large CROs, has been making preparations to increase its presence in new and emerging geographic locations, although it may be taking extra pains to be seen to be branching out globally. The company generates two thirds of its sales in the US, but has been conscious of developing its operations beyond US borders since July last year when several analysts expressed concern that the firm was not capitalising enough on conducting business outside the country. At the end of July, PPD announced it would expand its operations in Scotland and more than double its workforce over the next three years. Several months later, the company announced the opening of site in four new global locations - Copenhagen, Denmark; Sydney, Australia; Lima, Peru and Lisbon, Portugal. Since October, it has also made a number of key appointments in a bid to bolster its global activities. Earlier this month the firm hired a new senior member of management to oversee the company's Phase II-IV clinical operations in Europe, Middle East and Africa (EMEA) and lead its expansion plans in the budding region. "EMEA has been and will continue to be a very large and important region for PPD clinical research operations", said William Sharbaugh, chief operating officer of PPD. Sebastian Pacios now holds the position of PPD's senior vice president of clinical operations for EMEA, moving to the post from rival firm PRA International where he served as vice president, responsible for clinical research and project management in Europe, Africa and Asia-Pacific.

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Omnicare broaches China's borders By Kirsty Barnes 25-Feb-2008 – Omnicare Clinical Research has decided to formally broach China's borders with the opening of its first two offices in the country. The firm's president and CEO Dr Dale Evans said that the two new locations in Shanghai and Beijing "represent a vital component of our Asia Pacific business strategy". "The region is a burgeoning centre of drug development that offers numerous advantages. We're committed to the marketplace here and our new offices will help us provide clients with an even greater level of support. Our presence in China is another step in our global expansion." Indeed, Omnicare is one of many contract research organisations (CROs) now scrambling for global expansion in a bid to keep up with an industry that is spreading across the world. The Asia Pacific, and China in particular, is emerging as a popular new location for CROs to set up. Big pharma firms are fast investing and building their businesses in China attracted by a highly skilled, low-cost workforce and the vast potential offered by the Chinese market. In addition, clinical trials conducted in China provide access to a large population offering a potentially huge pool of patients - a major attractive point for drug makers as it is a big factor in speeding up the time and cost of clinical studies. For example, according to a recent report published by the UK Trade and Investment (UKTI) department, the local Chinese industry estimates that Phase I trials can be conducted in China for around 15 per cent of the equivalent cost in a Western country, while Phase II studies cost 20 per cent of the price in the west. Omnicare has already had a business presence in China since 2001, but its new offices, which will conduct project management, clinical trial services, regulatory affairs and business development, now cement its relationship with the country. The company's other established offices in the Asia Pacific region include Australia, India, Japan, Singapore and Taiwan. Meanwhile, rival firms have also been making the moves on China of late. Some have gone down the same route as Omnicare and opened up their own operations in China while others have chosen to form alliances with domestic firms already operating in the country.

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An example of this was announced last week when Europe's Novasecta formed an alliance with Chinese CROs Sundia Meditech and HD BioSciences to provide their R&D services to European mid-sized biopharma firms. Moreover, home-grown Chinese firms are also gaining momentum. In November China's second largest CRO ShangPharma attracted $30m (€21m) from US private investment firm TPG. Tigermed Builds Up Phase I CRO Services December 1, 2008 Tigermed Consulting Co., Ltd, a CRO with a clinical trial focus, has established a subsidiary, Hunan Tigermed Xiangya Drug R&D Ltd. Tigermed Xiangya, a collaboration with Central South University (CSU), will increase Tigermed’s services in pre-clinical drug studies and pharmaceutical analysis by giving the company a Phase I Clinical Laboratory.

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News on Contract Manufacturing Service

WuXi ends US biologics manufacture; focus on testing December 2, 2008 WuXi PharmaTech is to discontinue its US biologics manufacturing operations as it attempts to cut costs, with 100 employees due to lose their jobs. The move will affect employees at WuXi’s facility in Philadelphia, which will now focus solely on biologics testing, cell banking and cell therapy services. This facility was acquired in the takeover of AppTec, which gave WuXi biologics capacity and a base in the US. WuXi says it initiated the change as it anticipates that its US biologics manufacturing operations will account for less than four per cent of total revenues in 2008. The company believes that it will realise $10m in annual cost savings as a result of the move. The cessation of biologic manufacturing in Philadelphia will be complete by the end of 2008, costing the company an initial $2.5m to $3.5m before savings are realised in 2009. WuXi’s action comes after disappointing third quarter results that led to the company knocking $20m to $40m off its expected yearly revenues. This downturn affected many of WuXi’s divisions but had not been anticipated by its biologic manufacturing operations. Speaking during the second quarter conference call Benson Tsang, WuXi’s chief financial officer, said he believed that the biologics manufacturing division’s revenues and margins would continue to grow through 2008. This growth has been hindered by the global economic climate, with WuXi saying in its third quarter results that a number of small biotechs had delayed or cancelled biologic manufacturing contracts in response to financial pressures. Although WuXi was previously positive about the fate of the division it has been explicit about its desire to use its biologics knowledge gained from the AppTec acquisition to set up similar operations in China. Speaking during the second quarter conference call Ge Li, chairman and CEO, said: “We plan to leverage knowledge, know-how we obtained through our acquisitions to replicate

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our capabilities in biologics, manufacturing, and the process development service in China.” In addition when a new leadership team was installed at the Philadelphia site Edward Hu, Wuxi’s chief operating officer, said they would play an “important role” in the transfer of biological capability to China. At this time it is not clear how stopping biologic manufacture at Philadelphia will impact on existing clients or whether WuXi intends to create additional capacity in China. Staff from the Philadelphia facility assisted in the setting up of WuXi’s molecular biology lab in Shanghai and the company is also planning on constructing a microbiology and packaging testing laboratory in China.

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News on Medical Devise/Instruments

Tecan Expands Operations In China And Asia Pacific November 3, 2008 Tecan has opened its new Asia Pacific region headquarters, based in the heart of Shanghai's pharmaceutical and life science centre. The launch of the regional headquarters reflects the Company's significant growth and strong commitment to the market in China, as well as the whole Asia Pacific region, and will improve service and support for customers and distribution partners alike. The new office was opened by Thomas Bachmann, CEO of the Tecan Group, on the 28th October, 2008, at a ceremony attended by key customers from around the Asia Pacific region, major distributors, officials and representatives from key Chinese Provinces, the Swiss and Austrian Embassies in China and the Tecan Group. Guests were welcomed to the Shanghai office by the CEO and an official from the Chinese Government, and were treated to a traditional Chinese ceremonial inauguration of the facility, followed by a celebratory dinner. Under the new terms, the new Asia Pacific headquarters in Shanghai will now sell directly to many of the major multinational biotechnology, pharmaceutical and diagnostic companies flourishing in this rapidly developing area. Tecan's long-established Beijing operations will maintain close regional relationships with its customers in China. Similarly, a crucial well-established network of distributors will continue to cover the Asia Pacific region as before, including the important after-sales customer support. Tecan will also be able to support its distributors in these efforts by providing training, warehousing of spare parts and improved services out of Shanghai. Mr Bachmann said: "We are delighted to be making this positive move into what is almost certainly one of the fastest growing regions in life sciences today. With a stronger presence and new facilities, we will be able to improve sales coverage, service and support to all of our customers and partners in the entire Asia Pacific region."

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Cook Medical to Open Asia Regional Center in Shanghai December 12, 2008 Cook Medical, a privately owned medical device company located in Bloomington IN, will open a combined distribution and customer service center in Shanghai. The 50 million RMB ($7.3 million) center will serve as Cook Medical’s base for its operations in China and Southeast Asia. By improving service to its customers, Cook Medical expects to increase its penetration of the China and Southeast Asia markets.

Shinva and GE Healthcare Form Medical Device JV December 29, 2008 Shinva Medical Instrument and GE Healthcare will form a medical device JV, called Xinhua GE Medical Systems, with a total investment of $25 million. The new company will focus on diagnostic X-ray equipment and be involved in R&D, manufacturing and sales. It will also develop additional equipment and software. Under the agreement, Shinva will hold a 51% stake of the new company, and GE will hold the remaining 49%.

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News on Biological Testing Service

BioCurex to Offer Cancer Tests in Shanghai Nov 5, 2008 BioCurex Inc., headquartered in the Vancouver area, has completed the incorporation process for a fully-owned subsidiary, BioCurex China, which will be sited in Shanghai. The new company will operate initially as a clinical laboratory that will perform cancer tests, using BioCurex’s proprietary RECAF™ technology.

ProGenTech to Develop Diagnostics with China’s CDC December 22, 2008 ProGenTech, a molecular diagnostics company headquartered in California but with its operations in Shanghai, signed a collaboration agreement with the China’s Center for Disease Control and Prevention (China CDC) to create a joint laboratory. The lab will focus on developing next generation molecular diagnostic systems and assays, using ProGenTech’s Entura instrument platform.

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News on Service of Outsourcing Service

Drug Information Association (DIA) Opens New Office In China November 19, 2008 Pharmaceutical Online"
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services to international, national and regional associations, professional societies, foundations, and businesses. Kellen will provide: Full office outsourced management of DIA in China Management and logistical support for pACC activities Conference and training course organization and support Membership development and recruitment "DIA is confident that Dr. Ling Su, with the support of an outstanding headquarters team and an experienced local agency, will lead DIA's volunteer advisory council in China in an effort to expand our capabilities in the region," explains Dray.

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Chinese Companies Use Service Provided by Western Companies

QIAGEN and Shanghai Biochip Corp. Sign Collaboration Agreement May 30, 2008 Shanghai, May 30, 2008 - (ACN Newswire) - QIAGEN today announced that it has been selected by Shanghai Biochip Corporation (SBC) as a primary partner to supply various small interfering RNA (siRNA) library sets. SBC will use these library sets for setting up the first siRNA high-throughput screening center in China. siRNAs are synthetic RNA assay molecules which have the ability to turn genes "on" and "off" (RNA interference, RNAi). They are used for functional gene analysis and thus play a major role in drug development. "We are very pleased that SBC has selected QIAGEN as its partner and primary siRNA supplier", said Dr. Frauke Ehlert, General Manager of QIAGEN China/ HK. "SBC is one of China's largest service providers and R&D centers for systems biology research and drug discovery. This collaboration further expands QIAGEN's position as a leading supplier of innovative solutions." Songmin Xie, the operation manager of the RNAi screening center, commented: "The sophisticated siRNA design, broad coverage of human gene families, and excellent technical support are the main reasons why SBC selected QIAGEN Asia as the supply partner for the siRNA library." In forging this partnership, the Shanghai Biochip Corporation gains access to the largest portfolio of siRNA sets as well as the most advanced design algorithm available. This, accompanied by a comprehensive support structure, equips SBC to accomplish their goals to provide customers cutting edge solutions for drug discovery and development. Sartorius Stedim Biotech Signs Agreement With WuXi AppTec July 1, 2008 Sartorius Stedim Biotech has entered into an agreement with WuXi AppTec, Inc., a wholly owned operating subsidiary of WuXi PharmaTech, to cooperate on viral clearance studies. Under this agreement, WuXi AppTec will provide the relevant viruses, materials and methodologies to Sartorius Stedim Biotech to employ in conducting non GLP viral clearance testing of its tech-nologies with customer products and for supporting its own research and development activities.

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Sartorius Stedim Biotech markets an orthogonal and fully integrated three-step viral clearance technology platform to the biopharmaceutical industry. To further support its customers and to meet anticipated regulatory expectations, Sartorius has built an in-house laboratory for non-GLP viral clearance testing of its technologies. The cooperation with WuXi AppTec will benefit customers because non-GLP viral clearance testing during early-stage process development will allow Sartorius to recommend the best Viral Clearance Technology option. Sartorius and WuXi AppTec will be using the same viruses, materials and methodologies so that customers can reliably anticipate - at this very early stage – predictive study results of what might be expected from WuXi AppTec´s GLP Viral Clear-ance testing of the same product as part of the IND process and ultimately the Phase 3 validation process. Viral clearance studies performed during the early stage of process develop-ment often help process decisions and provide information about the viral inactivation or removal mechanism. Major regulatory bodies around the world require that companies demonstrate that their purification process has the ability to clear viruses before the drug product receives marketing authorization. "Viral clearance studies are gaining more importance at early stage process development and with WuXi AppTec we have found an excellent partner to realize both early stage non-GLP testing at Sartorius and GLP testing at WuXi AppTec," stated Reinhard Vogt, Vice CEO Sales and Marketing and Member of the Board of Sartorius Stedim Biotech. "We are very pleased to be able to partner with Sartorius Stedim Biotech in offering this unique benefit for biopharmaceutical manufacturers," said WuXi AppTec Vice President Larry Thomas. "It is a perfect fit with our company's commitment to providing clients with seamless single-source solutions to help shorten the time from initial process development to a successful IND." Pharmatech Associates Leads Design For First FDA-Licensed Biomanufacturing Facility In China October 7, 2008 HAYWARD, Calif. --(Business Wire)-- Pharmatech Associates, a leading consultancy in the regulated life sciences industry, has been chosen by Pacific Biopharma Group (PBG) to provide the Basis of Design for the first FDA- and EMEA-approved biotechnology manufacturing facility ever built in China. The Basis of Design for the 181,000 square foot facility will be the first reference document reviewed by the FDA as part of any licensure activity in China.

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The new facility is a showcase cGMP laboratory that uses state-of-the-art "single-use" technology throughout the biomanufacturing process. It is located in Taizhou, Jiangsu Province, in the emerging biomedical science park known as China Medical City (CMC). CMC is considered to be one of the largest and most ambitious undertakings by any nation to establish biomedical capabilities for the development of novel therapies for the world marketplace. "Pharmatech Associates understands every phase of the drug development lifecycle — not just pharmaceutical construction," said Dr. S. Chang, VP Manufacturing, Pacific Biopharma Group. "Their ability to integrate the critical considerations necessary for international biological market approval is essential to the success of our program in China." "We are delighted that PBG chose Pharmatech for this endeavor. The project caters directly to our deep understanding of product development, technology and international compliance," said Bikash Chatterjee, President and CTO, Pharmatech Associates. The project is a joint venture between PBG and CMC. In addition to manufacturing biotechnology products for late-stage clinical supplies, the facility will be used for development projects borne at the California Institute for Quantitative Biosciences (QB3) whose lead campus is at University of California, San Francisco.

Honeywell inks China packaging deal November 04, 2008 Honeywell has entered into a three-year agreement to supply its Aclar brand moisturebarrier films to Shanghai Haishun Packaging Material. The deal grants Honeywell increased access to the rapidly expanding packaging market, which was worth $2.4bn in 2007 according to FriedlNet and Partners. In turn Haishun gains access to Aclar to improve the quality of its products and will also receive technical services and training from Honeywell. Weir Lin, general manager of Haishun, said: "Honeywell has years of experience in technology innovation and offers market advantages in the area of specialty films. "Our agreement with Honeywell will upgrade the technology and quality level of our products, and allow us to promote new moisture-barrier packing materials to pharmaceutical manufacturers in China."

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Honeywell promotes Aclar as being clear, chemical-resistant, non-flammable, biochemically inert and free from plasticisers and stabilisers. These traits are coupled to its effectiveness as a moisture barrier. Aclar has been used in a range of applications from blister packaging to overwraps and pouches, with the products flexible variant proving particular suitable for the latter uses. Like many other companies Honeywell has been trying to establish a presence in China and Asia-Pacific, with the opening of its technology centre in Shanghai intended to achieve this. However, Haishun will receive Aclar that has been manufactured at Honeywell’s plant in Pottsville, Pennsylvania.

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