A Medical Device Daily
China Medical Technologies (Beijing), a manufacturer of advanced in vitro diagnostic products, said it has completed the previously announced sale of its high-intensity focused ultrasound (HIFU) tumor therapy system business to Chengxuan International, a major shareholder of the company.
In looking for potential buyers for the HIFU business, China Medical turned to Xiaodong Wu, CEO of the company, who was the founder of the HIFU business and who expressed an interest in purchasing that business. The company said it engaged an independent international firm to carry out an independent valuation of the business, and a final selling price was set at $53.5 million.
Chengxuan is a company owned by Wu.
In a Dec. 18 press release, China Medical had said it was selling the HIFU business due to conditions in the global financial markets, more stringent regulatory requirements on therapeutic equipment from the State Food and Drug Administration (SFDA) in China and the significant capital investments required to obtain U.S. and EU regulatory approvals for the HIFU equipment.
The company said last week that it believes business conditions and the outlook going forward for the HIFU business have "deteriorated significantly due to the recent global financial turmoil."
It noted that certain HIFU distributors have recently experienced severe difficulties in obtaining financing in China, which has negatively affected their working capital and liquidity. "As a result, some of them have delayed their planned delivery schedules of the purchased HIFU equipment from the company to a much later date and others did not place purchase orders with the company based on [our] previous expectations."
China Medical added that some Chinese hospitals that have previously considered purchases of its HIFU equipment have recently informed distributors to put their proposals on hold. The company added that it also has experienced slower collections and recorded higher accounts receivable from its HIFU distributors.
The company said that in order to improve the outlook for the HIFU business, it would need to adopt aggressive measures, including providing price reductions as well as entering into profit-sharing arrangements with hospitals.
It added that its HIFU registration certificate renewal application has been under review by the SFDA for some time. In November, the SFDA said it would require China Medical to provide new clinical trial data for each approved indication for the renewal assessment, which was not required in the previous renewal process for therapeutic medical equipment.
The company said it expects the new requirements from the SFDA to prolong the renewal process.
It cited anticipated similar delays in obtaining European and U.S. approvals.
Company management said it believes it is in the best interest of the company to focus its resources on its advanced in vitro diagnostic (IVD) operations, which provide recurring revenue from selling consumables for diagnostic purposes.
It said the global financial turmoil has had much less impact on its IVD operations because the needs for medical consultation are generally less influenced by economic environment.
With the sale of the HIFU business, China Medical becomes a pure advanced IVD company. It said it expects to use the proceeds from the sale of the HIFU business to support the further development of its fast-growing molecular diagnostic businesses.
New name for U.S.-Korean j-v
A new joint venture between Advanced Cell Technology (ACTC; Worcester, Massachusetts) and leading Korean-based biotechnology company CHA Biotech (Seoul, South Korea) will be named Stem Cell & Regenerative Medicine International.
The companies said their partnership is an indication of the accelerating globalization of biotechnology. The formation of the new international j-v to develop stem cell technologies based on ACTC's hemangioblast cell technology was announced early last month.
Dr. Robert Lanza, head of ACTC's retinal program and the j-v's chief scientific advisor, said the new name captures the essence and scope of what the company is focused on in the most simple and obvious way.
The new company will be located in Worcester and will focus on development of human blood cells and other clinical therapies. It is majority owned by CHA. ACTC will exclusively license all of its hemangioblast technology to the j-v.
CHA Biotech was established in September 2000 by Pochon CHA University College of Medicine and CHA General Hospital Group to create a central, multidisciplinary research facility where the university's scientists and hospital physicians could focus their efforts on developing stem cell, gene therapy and regenerative medicine technology.
It operates the largest stem cell research institute in South Korea, occupying a 130,000-square-foot facility as home to 180 research scientists.
The company also successfully operates CHA i-Cord, a cord blood bank, and a mobile healthcare unit called CHA Paramedic Service.
As part of its global business strategy, CHA Biotech expanded its operations to the U.S. in 2002 with the opening of CHA Fertility Center (Los Angeles), followed by the 2005 acquisition of Hollywood Presbyterian Medical Center (Los Angeles), a 434-bed general, acute-care hospital.
Swersky Sofer leaving Yissum post
Yissum (Jerusalem, Israel), the technology transfer company of the Hebrew University of Jerusalem, said that President/CEO Nava Swersky Sofer will be leaving the company, having completed a three-year term.
Yehuda Yarmut, executive VP, licensing and IP, will act as interim CEO until the appointment of a new CEO.
During Swersky Sofer's three years at the helm, Yissum's revenues rose by 60%, the product pipeline grew by 50%, and the number of commercial agreements more than doubled.
She joined Yissum from the venture capital industry, where she held a series of senior roles in Israel and internationally. She was a partner at healthcare VC firm Sanderling Ventures (San Mateo, California), which reports more than $1 billion under management, and a VP of Novartis (Basel, Switzerland).