Peptide Drug R & D, Production Base Construction Project

1. Introduction to the Project

1.1 Project Background

1.1.1 Product Introduction

Polypeptide is biologically active substance involving all the cellular functions in the body. It is an indispensable participant in life activities, and involves hormone, neurotransmitter, cell growth, and reproduction and other fields. Its importance lies in broadly participating in and adjusting the functional activity in various systems, organs and cells of the body. The biological activity of polypeptide is extensive and important, can play an extensive role in endocrine system, immune system, digestive system, cardiovascular system, blood system, and musculoskeletal system. Peptide drugs are mainly used for the treatment of cancer, metabolic diseases, cardiovascular diseases, and infectious diseases. But the field of application of peptides is far more than these. Endocrine illness, blood disease and pain relief, and many other diseases can use peptide drugs. Compared to small molecule chemical drugs, peptide drugs are often safer, with smaller side effects, rarely causing severe immune reaction. The reason is that most peptide drugs have natural structure or are their modifications. Due to higher safety, the approval rate of peptide drugs exceeds 20%, one time higher than that of small molecule chemical drugs. With the completion of the Human Genome Project, the World Life Sciences has entered a new phase, focusing on proteomics and biological drug development. The growing number of new drugs and the growing number of diabetes patients will continue to promote the sales growth of this class of drugs. It is expected that in the future, it will grow with 10-- 15% rate.

1.1.2 Market Prospects

The development of peptide drugs is increasingly attracting the attention of the pharmaceutical sector. Up to 2011, in worldwide, the number of approved peptide drugs has exceeded 50, approximately 140 peptides are in clinical studies, and the number of peptide drugs under preclinical research and development stage is 500-600. In 2010, the global market size of polypeptides is approximately $ 13 billion, accounting for only about 1.5% of global drug sales. But growth rate is rapid, compound annual growth rate is 7.5 --10%, exceeding the average growth of the global pharmaceutical market. There are polypeptide drugs with global sales of more than 1 billion dollars, and it has become a veritable blockbuster drug.

At present, China has had 14 polypeptide preparations on the market, four of which rely on imports, ten belong to generic drugs, or changed form drug. According to incomplete statistics, there are more than 400 domestic pharmaceutical companies engaged in production of biochemistry and biotechnology drug, of which about 80% enterprises produce different types of polypeptide drug preparations or bulk drugs. These companies are mainly located in the economically developed provinces, such as Beijing, Shanghai, Guangdong, Zhejiang and other places. Most of these enterprises use modern biotechnology in production, but some adopt traditional extraction and separation method, enzymatic hydrolysis method and solid-phase synthesis method.

The application scope of peptide drugs will expand. The polypeptide antibiotics will enter commercial production in order to deal with the problem of microbial resistance. Peptide drugs also come in handy in the field of obesity and type 2 diabetes. The diseases with no effective treatment plan can possibly find a viable solution in the peptide drug. Once a generic and convenient platform for polypeptide drug administration is developed, the enthusiasm for the development of polypeptide drug will be greatly increased.

In recent years, the sales volume of peptide drug market in China expands year by year. From 2006 to 2009, the sales of China's peptide drug market maintain the momentum of rapid growth, with an annual growth rate of higher than 15%. Its sales increased from 11.082 billion yuan in 2006 to 19.479 billion yuan in 2009, and the four-year average compound annual growth rate reaches 20.68%. The growth of global polypeptide industry is in the range of 15% -30%, while in China, because the polypeptide industry has just started, the increase in the future will be more significant, at least realizing average growth rate of about 30%. According to the magnitude, the estimated domestic market size of polypeptide will exceed 50 billion yuan by the end of the “12th Five-Year period”.

 

Market development forecast of chemically synthesized peptide drug in the next few years

Source: SFDA Southern Medicine Economic Institute

Adhere to the path of internationalization. The so-called internationalization refers to the international standards, international technology, international quality, international management, and international talent; products gradually develop from domestic market to foreign markets.

For talent, insist on two lines, that is, self cultivation combined with external introduction; do everything possible to improve the quality of staff; within a decade, the company will strive to enter the first group among the Chinese pharmaceutical enterprises.

1.1.3 Technical Analysis

The technologies used in this project are the self-owned technology of research institutions in the park. The production technology of peptide drug is complex. From the single batch 1-2 grams production capacity in the lab to several kilograms of industrial production capacity, the technical requirements on equipments and staff are very harsh, with high technical obstacles. The company has a modern automated peptide synthesizer and purification system, can synthesize all kinds of polypeptide, and can meet the rapid, large, high-quality synthesis requirements. By using unique techniques and methods, the company independently researches and develops a variety of peptide drugs with domestic raw materials, and achieves the level of large-scale production. It has become one of the few enterprises that can produce polypeptide bulk drugs in large scale.

 1.1.4 Advantageous Conditions of Project Construction

（1）Policy conditions

 The national "12th Five-Year Plan" proposed to develop modern industrial system, improve the core competitiveness of industries, transform and upgrade manufacturing industry, and foster the development of strategic emerging industries. "The decision of the State Council on accelerating the cultivation and development of strategic emerging industries" was promulgated. Biological industry has become one of the strategic emerging industries for key cultivation and development. The “12^th Five-Year” has become the key period for the overall arrangement of strategic emerging industries.

The "the 12th Five-Year Plan" of our province puts forward to comprehensively implement characteristic resource industry of Jilin Province, including unique ecological resources industry. Relying on ginseng, mineral water, sika deer, Rana etc. ecological resources, it actively promotes the protection of geographically marked products, adheres to characteristics, implements standardization, promotes industrialization, and achieves economies of scale. It seizes the significant opportunity of homology of medicine and food of the country, accelerates the implementation of revitalization of the ginseng industry, actively promotes the construction of key industrial parks, nurtures the “Changbai Mountain Ginseng” brand, and builds 100 billion yuan industry. The output value will reach 50 billion yuan in 2015. For pharmaceutical industry, it puts forward relying on the biological drug research and talent advantage of the province, promotes the upgrading of current vaccine production technology and expansion of production capacity, make efforts to expand the domestic market share and exports of recombinant human insulin, recombinant human growth hormone etc. biotechnological drugs, accelerates the development and industrialization of AIDS vaccine etc. a number of new varieties, and seizes the commanding height of future development of biomedicine. We can see that the development of the bio-pharmaceutical industry is facing unprecedented opportunities.

（2）Location advantage

ChangchunCity, where Changchun High-tech Zone is located, is the geographic center of Northeast Asia and China's three northeastern provinces. It is the inland port for Chang-Ji-Tu to lead the pilot area, with favorable location conditions. Changchun High-tech Zone is located in the key area for future urban development of Changchun: the Southern District of Hi-tech Zone is near the Southern New City of Changchun, which is the future city center; the Northern District of the Zone is the core area of Changchun Northeast Development and Opening Pilot Zone, the key area for industrial development of Changchun City in the future. Changchun High-tech Zone is located in important location of ChangchunCity, making Changchun High-tech Zone have more superior regional conditions than ChangchunCity. These superior geographic conditions not only create favorable conditions for a new round of rapid development of High-tech Zone, but also are conducive to for the High-tech Zone to further play the radiation, driving and demonstration role of the High-tech Zone.

 The major modes of transport in Changchun City, that is No. 7 subway line, light rail, round-city highway, State Road 102, Yuanda Street, north fourth-ring road, all pass through Changchun northeast core area. In freight logistics, Changchun northeast core area has the same good advantage. Dingda Freight Station on Jing-Ha freight line is located in Changchun northeast core area. It is only 13km from ChangchunLongjiaInternationalAirport.

（3）Technical advantage

Changchun High-tech Zone is settled by over 100 pharmaceutical companies, 13 enterprises have output value exceeding 100 million yuan. The produced variety covers over 400, with more than 150 under-research projects. There are a number of biopharmaceutical companies, and a large batch of biological vaccines and genetically engineered products account for a considerable share on the domestic and foreign markets. Of the ten genetically engineered drugs approved by the city, there are six from the High-tech Zone. Of the 26 kinds of vaccine products with production capacity in ChangchunCity, 24 kinds are from the High-Tech Zone. For example, chicken pox vaccine accounts for over one third of the South Korean market. The zone owns Asia's largest vaccine and cytokine production base. The production capacity of interferon ranks the first in the country. The sales of attenuated hepatitis A vaccine account for more than 40% of the domestic market. Interleukins, human growth hormone and other biological drugs are sold in the domestic and foreign markets. The AIDS vaccine developed by enterprises in the zone first enters clinical research in the country.

In Changchun High-tech Zone, there is Changchun Biological Products Institute, Genetic Engineering Institute of Quartermaster University of the PLA, Changchun College of Traditional Chinese Medicine, Research Center of Combinatorial Chemistry of Jilin University, Enzyme Engineering State Key Laboratory of Jilin University, Genetics and Cytology Institute of Northeast Normal University, and Herbal Medicines College of Jilin Agricultural University etc. medical research institutions. This constitutes a multidisciplinary technology integration advantage, which is rare in the country.

（4）Human resource advantage

Changchun High-tech Zone is a famous high-level talents concentration area in China. Over ten famous universities and colleges, such as Jilin University, Changchun Institute of Light Machine, are located in the area. There are over 100,000 undergraduate students, and over 10,000 doctors and masters. Changchun Branch of Chinese Academy of Sciences, Changchun Institute of Light Machine, Changchun Applied Chemistry Institute etc. 39 national and ministerial level research institutions, 12 research institutions, 8 computing testing centers and 11 key open labs of the nation in Changchun are all concentrated in Changchun High-tech Zone. It owns 200,000 talents of every field, including professional technical talent of 50,000, and 6,000 senior talents participated in starting business, accounting for over one half of that in Changchun City. The percentage of scientific and technological talents is as high as 16.6%. The scientific research strength is concentrated, scientific instruments and equipments are concentrated, technological information and intelligence is concentrated, and hi-tech and scientific fruits are concentrated. It is the famous high-level talents concentration area and ideal place for developing hi-tech industry. Changchun has a long history in bio-pharmaceutical and traditional Chinese medicine industry, with a lot of industrial workers in this field.

（5）Industrial foundation advantage

Changchun High-tech Zone exerts the advantage of R & D and innovation, promotes industrial agglomeration, strives to improve the international competitiveness of the bio-pharmaceutical industry, drives the regional industrial structure optimization and upgrading, and constructs nine public platforms. First: experimental animal breeding and experimental center; second: test center of genetically engineered drugs; third: technology center of biological enzyme engineering; fourth: vaccine research and development engineering center; fifth: drugs screen center; sixth: research center of Chinese medicine formulations; seventh: food and drug inspection and information consulting service center; eighth: public platform for Chinese medicine pretreatment; ninth: irradiation and sterilization device center. The construction of the nine platforms will play a crucial role for improving the biological and pharmaceutical industrial chains, and is conducive for enterprises to settle in the zone and invest in factories.

ChangchunCity has a large batch of fresh meat slaughtering and processing enterprises, such as Haoyue Group, Huazheng Group, Deda Group etc. The enterprises not only provide delicious food for the people, more importantly, they can provide more experimental animal samples for biological and pharmaceutical enterprises. Thus they are favorable resource backing for developing genetic engineering, and serum extraction industry.

1.2 Content and Scale of Project Construction

1.2.1 Product Scheme and Scale

(1) Polypeptide bulk drug, with annual production scale of 10kg;
( 2) Freeze-dried powder formulation, with annual production scale of 12 million pieces.

1.2.2 Construction content

It covers an area of 40,000 square meters, with construction area of 32,000 square meters. The main constructions include medicine development center, bulk drug workshop, injection workshop, quality inspection center etc.

1.3 Total Investment and Funds Raising of the Project

 Total investment of the project is 250 million yuan, including construction investment of 107.30 million yuan, interest incurred in construction period of 4 million yuan, and working capital of 68.70 million yuan.

Table 1      List of Total Investments of Project     Unit: 10,000 yuan

Note: the “10,000 yuan” in the table is RMB.

1.4 Financial Analysis and Social Evaluation

1.4.1 Major Financial Indexes 

 In normal year of this project, it will realize operating income of 540 million yuan, profit of 280 million yuan, financial internal rate of return of total investment of 85%, payback period (after tax) of all investment of 2.86 years, and profit rate of investment of 95%.

List of Major Indexes for Financial Benefits Forecast

Note: the “10,000 yuan” in the table is RMB.

1.4.2 Social Evaluation

 Polypeptide production consumes less reagents and energy than the synthesis of other chemical bulk drugs. Therefore, under the situation of obtaining the same sales revenue, the environmental protection pressure of enterprises in producing peptide drugs is much smaller, which is also in full compliance with the requirements of green GDP development. This project can drive the introduction of high-end technology and talent, increase employment opportunities, thus it has good social benefits.

1.5 Cooperative Ways of the Project

Joint venture cooperation.

1.6 What to be Invested by Foreign Party

Capital, foreign investor accounts for 49%.

1.7 Construction Site of the Project

North District of Changchun High-Tech Development Zone

1.8 The On-going Condition of Project

Project cooperation plan has been compiled.

2. Introduction to Partner

2.1 Basic Conditions

Name of project undertaker: Changchun Baiyi Pharmaceutical Co., Ltd.

Legal address: 85 of Chenhui Street, Hi-tech District, ChangchunCity

Legal representative: An Jixiang

Corporate ownership form: limited liability

2.2 Overview of Project Undertaker

Changchun Baiyi Pharmaceutical Co., Ltd. is a subsidiary of Changchun Baike Biotechnology Stock Co., Ltd. It was incorporated on July 30, 2010, with registered capital of 60 million yuan. The company is located in Changchun High-tech Industrial Development Zone, covers an area of 40,000 square meters, and the existing building area is 14,000 square meters.

Changchun Baike Biotechnology Stock Co., Ltd. is a high-tech enterprise invested by Changchun High-tech Industrial (Group) Co., Ltd., and led and founded by Dr. Kong Wei, overseas returnee. It integrates new drug research and development, production, and sales. Changchun Baike studies over forty biological vaccines, peptides new drugs and chemical compound drugs etc., including the first AIDS vaccine in China. It is called the most potential pharmaceutical company in the two areas of biological vaccine and peptides new drug.

Based on the preliminary results of Changchun Baike Chemical Drug Research and DevelopmentCenter, Baiyi Pharmaceutical researches, develops, and produces polypeptide bulk drugs and new drug formulations. It can produce exenatide, thymosin α1, somatostatin acetate, acetic acid triptorelin etc. peptide raw materials.

The Polypeptide Laboratory includes the Peptide Drug Research Office, Pharmaceutical Analysis Office and Preparation Office. It is mainly engaged in the research and development of peptide drugs and improvement methods of process. It owns mature the whole set of production technique from the synthesis and purification of bulk drugs to the formation of preparations. It has the ability of mass producing peptide bulk drugs. The Polypeptide Laboratory currently owns high performance liquid phase, gas chromatography, perfusion chromatography system, rotary evaporator, UV spectrophotometric system, micro fuse tester, smart drug dissolution tester, ion chromatograph, moisture analyzer, automatic potentiometric titrator test equipment etc. for analysis and preparation. It has established 1000 square meters of pilot plant in conformity with the GMP standard, owns one set of PS3 peptide synthesizer, two sets of SONATA peptide synthesizers, and vacuum freeze dryer (LYO-3) etc. equipments, and has strong research and development ability from the laboratory stage to large-scale production.

Legal Representative: An Jixiang, male, Han nationality, was born in March 1961, a former staff of the Finance Department of Changchun High-tech Industrial Development Zone, finance director of Changchun High-tech Industrial (Group) Co., Ltd., director of the Finance Bureau of Administrative Committee of Changchun High-tech Industrial Development Zone, assistant to the president of Changchun Medical Group, Deputy General Manager of Changchun High-tech Industrial (Group) Co., Ltd.

2.3 Contact Method

Contact person of project undertaker: Li Tiangang

Tel：13578712560

Fax: 86-431-85542548

E-mail：lee-66666@163.com

Website: http://www.chida.gov.cn/

 

Contact person of city (prefecture) of project：Lou Huimin

Tel：0431-82715338

Fax：0431-82715338

E-mail：cc82715338@126.com

Website of city or prefecture：www.ccmbc.com