EMERSON PROCESS MANAGEMENT; Emerson Wins Major Automation Contract for Biopharmaceutical Plant in Singapore

Emerson Process Management, a global process control and automation leader and a business of Emerson (NYSE:EMR), has been selected by Switzerland-based Lonza Group Ltd. to provide engineering and design services and digital automation architecture and control technologies for a new Lonza biopharmaceutical plant in Singapore (see also Emerson Process Management).

The win is part of Emerson s growing portfolio of life sciences companies that rely on digital automation with predictive intelligence to reduce overall costs, improve reliability, ensure product quality, meet regulatory requirements, and optimize operations.

Emerson has an excellent track record in managing and controlling the highly complex processes involved in the biopharmaceutical industry, said Steve Sonnenberg, president, Emerson Process Management. This win is yet another example of how companies like Lonza can leverage our global resources and expertise to meet their objectives for safe, reliable, and on-time start-up of new manufacturing facilities.

In the Asia-Pacific region, Emerson also has been awarded automation contracts by Shanghai CP Guojian Pharmaceutical Co. Ltd. in China; Reliance Life Sciences, DSM Anti-Infectives India Ltd., and Biocon in India; and Lonza for a prior facility in Singapore.

Having installed the automation architecture in Lonza s first biopharmaceutical plant in Singapore, Emerson was chosen to implement its innovative PlantWeb ® technologies in the new plant that is expected to be completed in 2010 at a cost of $350US million. By following the original project models, employing best practices, and applying the experience gained during design and construction of the original facility, Emerson is expected to reduce Lonza s overall costs for the new plant.

Lonza will employ an array of Emerson products and services, including: PlantWeb digital automation architecture; DeltaV digital automation system; and intelligent digital devices, including Fisher ® and Baumann control valves with FIELDVUE ® digital valve controllers, Rosemount ® flowmeters and analyzers, Micro Motion ® Coriolis flowmeters, and Fisher pressure regulators. About Lonza Lonza is the world s leading contract manufacturer of monoclonal antibodies and recombinant proteins. Lonza undertakes highly specialized development and manufacturing services for the pharmaceutical and biotechnology industries based on more than 25 years of experience in mammalian cell culture and proprietary technology for large-scale manufacture of innovative biopharmaceutical products. Biopharmaceuticals are one of the key growth drivers of the pharmaceutical and biotechnology industries. Lonza Group Ltd. is headquartered in Basel, Switzerland, and is listed on the SWX Swiss Stock Exchange. About Emerson Process Management Emerson Process Management (www.emersonprocess.com), an Emerson business, is a leader in helping businesses automate their production, processing and distribution in the chemical, oil and gas, refining, pulp and paper, power, water and wastewater treatment, mining and metals, food and beverage, pharmaceutical and other industries. The company combines superior products and technology with industry-specific engineering, consulting, project management and maintenance services. Its brands include PlantWeb ®, Fisher ®, Rosemount ®, Micro Motion ®, Daniel ®, DeltaV , Ovation ®, and AMS ® Suite. About Emerson Emerson (NYSE:EMR), based in St. Louis, Missouri (USA), is a global leader in bringing technology and engineering together to provide innovative solutions to customers through its network power, process management, industrial automation, climate technologies, and appliance and tools businesses. Sales in fiscal 2008 were $24.8 billion and Emerson is ranked 94th on the Fortune 500 list of America s largest companies.

Simcere Pharmaceutical Group Announces Agreement to Acquire 37.5% Stake in Jiangsu Yanshen Biological Technology Stock Co., Ltd.

NANJING, China, - Simcere Pharmaceutical Group ("Simcere" or the "Company") (NYSE: SCR), a leading manufacturer and supplier of branded generic and innovative pharmaceuticals in China, today announced an agreement to acquire a 37.5% stake in Jiangsu Yanshen Biological Technology Stock Co., Ltd. ("Jiangsu Yanshen") from existing shareholders for a total cash consideration of approximately RMB195.5 million. Upon the closing of the transaction, Simcere is expected to be the largest shareholder in Jiangsu Yanshen.

Located in Changzhou, Jiangsu Province, Jiangsu Yanshen is a leading China-based developer and manufacturer of vaccines. Jiangsu Yanshen's core products include an influenza vaccine and a human use rabies vaccine (vero cell), which have the second and the fourth largest market shares in China respectively.

In addition, Jiangsu Yanshen has received a new medicine certificate from the PRC State Food and Drug Administration ("SFDA") for its freeze-dried human use rabies vaccine (vero cell) and has completed clinical trials of its purified hepatitis A inactivated vaccine (vero cell). SFDA approval for the purified hepatitis A inactivated vaccine (vero cell) and GMP certification for the associated new manufacturing facility are pending.

"Vaccines have strong market potential and represent one of China's key emerging industries," said Mr. Jinsheng Ren, Chairman and Chief Executive Officer of Simcere Pharmaceutical Group. "We are delighted to enter this new market through our investment in Jiangsu Yanshen. This is another significant development for Simcere in the biopharmaceutical area, following our recent investment in Shanghai Celgen Bio-Pharmaceutical Co., Ltd."

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions. These forward looking statements are based upon management's current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are, by their nature, subject to a number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements as a result of a number of factors. Further information regarding these and other risks is included in Simcere's filing with the U.S. Securities and Exchange Commission at www.sec.gov. Simcere does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

China Biotech in Review: Deals and Earnings

Earnings reports were still rolling in last week in the world of China life science, but the pace slowed down from the previous week’s avalanche. Last week, the news about the everyday business of the sector, the announcements that speak of growth – new facilities, deals, etc. – moved back into the forefront.

Innovation was a theme as we profiled GeneHarbor (Hong Kong) Technologies, a company dedicated to the discovery of novel enzymes (see story). “Our major product is enzymes, but we are different from most other enzyme companies because we are primarily an R&D company, not a manufacturing company. We discover new enzymes for new applications,” said Jun Wang, PhD, Chairman and CEO of the company, in an exclusive interview with ChinaBio Today.

CROs also made their share of news. The Hamner Institutes for Health Sciences, a US-headquartered non-profit research organization positioned between industry and academia, formed a US-China biopharma bridge. By signing on with China Medical City, the biopharma park in Taizhou, Hamner established the Hamner-China Medical City Institute for International Drug Development (see story). Newsummit Biopharma, a partner in China Medical City, will take up residence in the Hamner’s Bioscience accelerator in North Carolina. Newsummit combines the features of a CRO with those of a technology development company.

Kleiner Perkins Caufield & Byers will invest $15 million of venture capital into Jinsite Science and Technology (Nanjing) Co Ltd, a CRO that is the China subsidiary of a US-based CRO, GenScript Corporation (see story). Founded in 2004, Jinsite offers outsourced biological and pharmaceutical research. Like its parent GenScript, the company says it is a one-stop shop for all outsourcing tasks, from gene discovery to target identification and validation.

XenoBiotic Laboratories (XBL), a CRO headquartered in New Jersey, announced it will open its new China laboratory this summer, the company’s first facility in China (see story). XenoBiotic focuses on metabolism and bioanalytical services. The new lab, located in Nanjing and called XBL-China, is a 36,000 square foot facility that includes a 12,000 square foot vivarium. A formal open house will be held in October.

Deals in other segments of China biopharma also made news last week. Simcere Pharmaceutical Group (NYSE: SCR) will acquire 35% of Shanghai Celgen Bio-Pharmaceutical Co., Ltd. for 140 million RMB ($20.6 million), a company that focuses on research and production of therapeutic antibodies (see story). At the same time, the company released a disappointing Q1 financial report: revenues were $64.8 million, a 12% increase from the year earlier, but $5 million less than the average analyst forecast. Net income was $7.1 million, a 57% decrease from 2008.

China Sky One Medical (NSDQ: CSKI) has begun a $10 million cooperative effort with Taiwan Golden Biotechnology Corporation to develop a novel cancer drug, Antroquinonol (see story). The drug is a stronger version of a TCM used in Taiwan; it will be tested as a treatment for liver and lung cancer. The two companies will develop the drug jointly, though China Sky One will have exclusive sales rights for mainland China.

Baxter International (NYSE: BAX) unveiled a plan to spend 1 billion RMB ($147 million) over the next three years to upgrade factories in Guangzhou, Suzhou, Tianjin and Shanghai (see story). The company positioned the investment as a response to China’s demand for high-quality medical instruments.

In earnings news, BMP Sunstone Corporation (NSDQ: BJGP) said revenues more than doubled in Q1, rising to $39.3 million (see story). The company closed its acquisition of Sunstone Pharma in mid-February last year, helping the comparison. Profits have traditionally been a problem for BMP. In Q1, the company reported $3 million in non-GAAP net income, but a GAAP loss of $2 million.

China Shenghuo Pharmaceutical Holdings (NYSE Amex Equities: KUN) reported revenues rose 23% in to $6.8 million (see story). The numbers raised cash flow to $890,000, but the company reported a net operating loss of $2.9 million, much higher than the $850,000 loss incurred in the same period in 2008.

China Aoxing Pharmaceutical (CAXG.OB) announced revenues increased 85% to $1.6 million in the most recent quarter, largely because of an acquisition (see story). China Aoxing said its operating loss in Q3 was $700,000 in Q3, about half that of the year-earlier period.

Simcere's Q1 Disappoints Investors

Simcere Pharmaceutical Group (NYSE: SCR) disappointed investors with its Q1 financial report. The company announced revenues of $64.8 million, a 12% increase from the year earlier, but $5 million less than the average analyst forecast. Net income was $7.1 million, a 57% decrease from 2008. At 12 cents per ADS, it missed expectations by 5 cents. 

At the same time, Simcere said it signed an agreement to acquire 35% of Shanghai Celgen Bio-Pharmaceutical Co., Ltd. for 140 million RMB ($20.6 million). 30 million RMB of the purchase price will repay debt, and Simcere will receive all of its money back if Shanghai Celgen’s major biosimilar drug, an etanercept, is not approved by the SFDA within 24 months.

Etanercept, marketed as Enbrel by Amgen (NSDQ: AMGN) and Wyeth (NYSE: WYE), is a TNF inhibitor given to patients with autoimmune diseases such as arthritis. 

Shanghai Celgen focuses on research and production of therapeutic antibodies. Certification is pending on its antibody manufacturing facility in Shanghai. The Celgen investment is the second deal that Simcere has made recently in the antibody sector. It signed a collaboration agreement in December 2008 with Epitomics, Inc. to develop and produce monoclonal antibodies to treat multiple tumors.

In terms of Q1’s results, Jinsheng Ren, Chairman and CEO of Simcere said sales of edaravone injection products, the company’s biggest selling product, continued to grow, but revenues from Endu, its novel cancer drug, were “a challenge.” Compared to the year earlier period, Endu revenues dropped 43% to 36.5 million RMB ($5.3 million). That was 8.4% of Simcere’s total revenues.

Edaravone injection products produced 159.6 million RMB ($23.4 million) in the first quarter of 2009, representing 36.5% of all sales and a 5% increase. Other first-to-market products, Jiebaishu, a nedaplatin product, Sinofuan, a 5-FU sustained release implant for the treatment of cancer, and Anxin, a biapenem injection for the treatment of serious infections launched in the fourth quarter of 2008, generated 32.8 million RMB ($4.8 million) of sales. 

Revenue from other branded generic products totaled 207.7 million RMB ($30.4 million) in the quarter, up 20% and representing 48% of all revenues. 

Gross margin for the first quarter of 2009 was 82.5%, compared to 83.2% for the corresponding period in 2008. However, costs were up in all major categories: R&D, Sales marketing and distribution, and G&A. As a result, net income dropped to 48.2 million RMB ($7.1 million) from 112.1 million RMB ($16.5 million) in 2008. 

Simcere reported it had cash of $120.8 million at the end of the quarter. 

Simcere’s share dropped $1.27 (17%) to $6.41 in the aftermath of the earnings announcement. It now has a market capitalization of $399 million.