NeoStem’s China antibiotics unit gets expanded SFDA approval

By Gareth Macdonald

- Last updated on GMT

Related tags Pharmaceutical drug Food and drug administration

US stem-cell therapy firm NeoStem predicts that output of its China-based generic antibiotics subsidiary Suzhou Erye Pharmaceutical will increase after further manufacturing approval from the SFDA.

Erye has received approval from the Chinese State Food and Drug Administration (SFDA) for its sixth major production line at a facility Suzhou’s Xiangcheng district, which is responsible for the production of over 20 finished drugs.

The line is one of eight due to be installed at a facility to which Eyre has been transferring operations since 2010. Currently various types of penicillin and cephalosporins are made at the site.

NeoStem CEO Robin Smith said the approval will help alleviate capacity constrains that Eyre started face at the facility, and explained that this and China’s market potential were the key motivations for the investment

The Chinese pharmaceutical market, which is the third largest in the world, has estimated sales of over $50 billion for 2011, and is expected to double in the next five years.

This significant forecasted growth was an important consideration in our agreeing to reinvest our dividends into the company to support the relocation so that Erye can be positioned to capture this growth and maximize the value of NeoStem’s 51 per cent interest in Erye.

Dr Smith also predicted that based on the new capacity and anticipated volume growth “Erye’s top line revenues should see solid growth in the years ahead and NeoStem’s management will consider our multiple options to realize the benefits of this increasingly valuable asset​."

The antibiotics market in China was worth approximately $8.8bn in 2007, with an annual average growth rate of approximately 24 per cent for the previous three years. The overall pharmaceuticals market in China is forecasted to triple in size by 2013, to become the third largest drug market in the world, behind the US and Japan.

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