NeoStem (AMEX:NBS) announced Monday that its subsidiary, Suzhou Eyre Pharmaceuticals, has received approval for its sixth production line from the Chinese State Food and Drug Administration (SFDA).
NeoStem (AMEX:NBS) announced Monday that its subsidiary, Suzhou Eyre Pharmaceuticals, has received approval for its sixth production line from the Chinese State Food and Drug Administration (SFDA).
NeoStem, a pharmaceutical company that focuses on stem cell-based technologies, acquired a 51% interest in China-based Suzhou Eyre, which manufactures and develops generic antibiotics and anti-infective drugs, from China Biopharmaceutical Holdings in October 2009.
The sixth line of production, of which there are two more awaiting approval, will push Suzhou Eyre’s product count to nearly 200 drugs. The line is responsible for 20 finished pharmaceutical products, 80% of which are on the China National Insurance Drug List.
The company’s production lines provided 99% of its $70 million sales in 2010. Its first quarter sales for this year totaled $18 million, a 15% year-over-year increase.
“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,” said NeoStem CEO Dr. Robin Smith.
According to recent analyst reports, NeoStem, with the assistance of Suzhou Eyre, could see a revenue growth rate of 20% between 2011 and 2013, with the potential to reach $119 million in pharmaceutical sales by 2013.
Indeed, Suzhou Eyre is also in the midst of re-locating to its new 53,000 square foot facility, which it expects will loosen its capacity constraints, improve its productivity and double its capacity.
“Based on the capacity of the new facility, 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 realizing the benefits of this increasingly valuable asset,” Smith added.
Aside from its Chinese pharma business, New York-based Neostem has gradually expanded its operations since starting out as a provider of adult stem cell collection and storage services, branching out into cell therapeutics, which is focused on using stem cells to help cure disease.
In January, the company acquired Progenitor, which has cell therapy manufacturing facilities, as well as processing and storage facilities for stem cells collected from the umbilical cord at birth, located on the east and west coast of the US.
Progenitor has performed over 30,000 cell therapy procedures and has processed and stored over 18,000 cell therapy products.
As a result of the acquisition, NeoStem can also now develop stem cell therapies in-house, placing it in a solid position for future growth in the field.
With positive results coming out of China today, NeoStem’s stock jumped almost 5% on the AMEX on Monday, trading at $1.47 per share. –Olivia D’Orazio