First Chinese medicine firm floats in London to fund research

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First Chinese medicine firm floats in London to fund research

 

Richard Wray

Monday April 10, 2006

The Guardian

 

 

Rising interest across the western world in traditional medical treatments

will today result in the first flotation of a Chinese medicines company in

London.

China MediTech, which has been backed by Hong Kong conglomerate Hutchison

Whampoa, is hoping to raise £40m in a listing on the junior market, Aim. It

is expected to value the company at £130m or more.

As well as looking to buy producers and distributors of traditional

medicines in China, Chi-Med will use the proceeds to invest in research and

development. It has a team of scientists based in Shanghai's Zhangjiang

hi-tech park investigating traditional medicines, some of which have been

used for hundreds if not thousands of years. It aims to isolate and then

synthesise the active ingredients the treatments contain. These can then be

tested and subsequently licensed to major drug development companies.

Chi-Med is focusing on potential treatments for cancer and auto-immune

diseases.

The concept of using traditional medicines to create new drug groups was

given a boost two years ago by the US regulator, the food and drug

administration, when it announced an accelerated registration process for

drugs created from botanical components. Chi-Med's research and development

arm has FDA approval to conduct phase one and two clinical trials in the US

of botanical drug candidates to treat cancer of the head and neck, and the

recurrent bowel disorder Crohn's disease.

Christian Hogg, Chi-Med's chief executive, said: " In China, there is a

wealth of knowledge and history of usage of traditional Chinese medicine,

which we believe is a major, under-exploited reservoir for identifying and

developing novel pharmaceutical and consumer products for the global market.

 

But Chi-Med is not just farming several thousand years' worth of traditional

medicine for drug ideas. The company also has an extensive pharmaceutical

and health supplement business in mainland China. It has more than 1,750

employees and owns several brands with operations in 120 Chinese cities.

The Chinese traditional medicine markets is highly fragmented and Chi-Med is

looking to take part in its consolidation using some of the funds from the

float. Lazard & Co is Chi-Med's nominated adviser, with Panmure Gordon

acting as brokers to the placing.

Alongside its operations in China, Chi-Med also has a fledgling retail

operation in the UK, owning the Sen chain of four stores. Located in

affluent areas of London - Mayfair, Chelsea, Knightsbridge and the City -

these shops sell health supplements, teas, body care and skin products all

based on traditional chinese medicines.

Chi-Med is looking to license the Sen brand name across the world and has

already sealed a deal with a South Korean manufacturer of household products

and cosmetics to use it.