CRO Company Merger; A First for China's Drug Development Contract Research Organization Industry
SHANGHAI, China, June 06, 2007 /Xinhua-PRNewswire/ -- Sundia MediTech (Shanghai) Company Ltd. and Shanghai United PharmaTech Ltd. today announced that they would be merging, a first for China's young CRO industry. Sundia CEO Dr. Wang Xiaochuan and United PharmaTech CEO Dr. Shi Xiongwei signed a letter of intent agreeing to combine their two companies.
"I am very excited by this merger, and I look forward to seeing our two teams work together to provide more and better services for our clients," said Dr. Wang.
Under the terms of the merger, both United PharmaTech and Sundia MediTech will become subsidiaries of Sundia Investment Group, the British Virgin Islands based holding company which currently owns Sundia MediTech.
Dr. Wang will become the new company's Chairman and CEO, while Dr. Shi will hold the positions of Director and Executive VP. The former senior management teams of both companies will join together into a new, combined management team. This merger proposal was approved earlier today by one of Sundia shareholders International Data Group Venture Capital (IDG VC) during their partners' meeting in Beijing and also by the Board of Directors of both companies.
Mr. Zhang Suyang, a partner of IDG VC said that he believes China's drug development CRO industry is beginning to emerge from its initial state into one in which companies will begin to consolidate. "The CRO companies, and the overall size of the CRO industry in China are still relatively small, and there is huge potential for growth so we can expect that in the following few years there will be many mergers," Zhang said, "Companies in this industry will grow very quickly and very soon we will see companies of reasonable size and with good governance emerge as corporations with serious long-term potential."
This corporate marriage comes just two weeks after Sundia MediTech and United PharmaTech, along with HD Biosciences organized China's first CRO Service Alliance for new drug development. And while there are currently no plans for HD Biosciences to join its two former partners as one, Dr. Wang said that the new company will maintain all ties with HD Biosciences and all agreements made between HD Biosciences and the two merger partners will remain the same.
The formation of the CRO Service Alliance had never precluded even closer cooperation and so watchers of the CRO industry had been eagerly expecting a new move. However, the pace at which Sundia and United PharmaTech moved from alliance partners into a merger surprised even Ms. Zhu Qiong, a senior reporter of CEO&CIO, a leading business magazine in China. "I have been expecting something like this to happen, but not this soon," Zhu said.
Part of the reason for the merger, said Sundia CEO Dr. Wang, is that it will combine United PharmaTech's and Sundia's technical expertise in different fields. Wang expects this merger to help the new company move to the forefront of the industry. "Yes, both companies have the potential for strong growth independently, but with this merger we will expand even more rapidly."
The merger was made easier by the similar background and future goals of Sundia and United PharmaTech, Dr. Shi said. "Our businesses are highly complementary and since we have had great success cooperating in the past, the agreement to merge came naturally."
The original senior management teams of both companies were made up of mostly overseas returnees to China with extensive experience in the US pharmaceuticals industry. Sundia MediTech and United PharmaTech were both founded between 2002 and 2003 in Shanghai to provide drug development CRO services in different stages and fields. Over the past three years, both companies have thrived and built strong reputations in their respective specialties.
Shanghai) Company Ltd.
CONTACT: Albert Sun, +86-21-5109-8642, or , for SundiaMeditech Company Ltd. firstname.lastname@example.org
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Posted: June 2007