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3SBio Inc. (SSRX)

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3SBio Inc. (SSRX - NASDAQ - American Depositary Shares (ADS)) is a Chinese biotechnology company that develops, manufactures and commercializes biopharmaceutical products, mainly for the Chinese market. Its recombinant, or genetically engineered, protein-based products and product candidates are designed to address markets with unmet medical needs in nephrology, oncology, supportive cancer care, inflammation and infectious diseases. Its leading products are EPIAO and TPIAO, and its legacy products are Intefen and Inleusin.


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Today 5d 3m 6m 1y 2y 5y Max



Funds w/ SSRX: 0
Rank: 0 / 351


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Company Analysis

3SBio manufactures and commercializes its products mainly for the Chinese market. It is based in Shenyang, PRC. Its predecessor, and now operating subsidiary, Shenyang Sunshine Pharmaceutical Company Ltd., or Shenyang Sunshine, began operations in 1993. The company was profitable as of the time of its IPO (February 2007). A small portion of our products is exported to certain developing countries, mostly Egypt, Pakistan, Thailand, Brazil, Mexico and Trinidad and Tobago.[1]

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Key figures[2]

Fiscal Year-End: December
2005 Sales (mil.): $12.6
1-Year Sales Growth: 35.6%
2005 Net Income (mil.): $2.0
1-Year Net Income Growth: 149.3%
2005 Employees: 272
1-Year Employee Growth: 14.8%

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Product line

3SBio's flagship product, EPIAO, is a protein-based therapeutic comparable in structure and function to Amgen Inc.’s Epogen and Kirin Brewery Company Limited’s ESPO. Independent research estimated revenues from all EPO drug sales in China at over RMB300 million (US$37.5 million) in 2005, representing a 20% compound annual growth rate from 2003. EPIAO, was was ranked as the number one EPO drug since 2002 in terms of both units sold and revenues among the foreign and domestic biopharmaceutical companies marketing EPO drugs in China. As of February 2007, 3SBio had sold over 6.9 million vials of EPIAO since 1999. 3SBio has exclusivity for the manufacturing and marketing of EPIAO for anemia associated with chemotherapy in cancer patients with non-myeloid malignancies under an administrative protection period through September 2007, during which other pharmaceutical companies are prohibited from manufacturing EPO drugs for the same indication pursuant to the relevant Chinese regulations. [1]

On March 20, 2007, the company received approval from the Chinese regulatory body, PRC State Food and Drug Administration (SFDA) to produce and market pre-filled syringe EPO doses under EPIAO brand name. This pre-filled syringe product, sold in 2,000 IU, 3,000 IU, 4,000 IU and 10,000 IU strengths will allow patients to self administer the drug at home, lessening the need to come to physicians' office. [3]

3SBio plans to initiate in 2008 clinical trials for NuPIAO, a second-generation EPIAO product candidate. NuPIAO is designed to have a longer half-life relative to first-generation EPIAO. In addition, the company is in late-stage clinical trials for a concentrated high dose formulation of EPIAO, designed to allow for less frequent administration. It expects to apply for marketing approval of high-dose EPIAO in 2007. If approved, it expects to be the highest EPO dosage formulation available in the Chinese market.[1]

A newer protein-based therapeutic product, TPIAO, was internally developed in January 2006. It is a recombinant human thrombopoietin, or TPO, indicated for the treatment of chemotherapy-induced deficiency of platelets. TPIAO is the first TPO-based therapeutic approved for thrombocytopenia in China. It was granteda five year monitoring period through 2010, during which other pharmaceutical companies are prohibited from manufacturing or importing a similar drug, except those whose applications for clinical trials were approved by the relevant Chinese authority prior to May 2005 at the commencement of TPIAO’s monitoring period. 3SBio is aware of at least one other Chinese pharmaceutical manufacturer whose application for clinical trials may have been approved prior to that and that may be in clinical trials. For the nine months ended September 30, 2006, the total revenues from TPIAO sales were RMB10.2 million, accounting for 11.0% of overall revenues for the period.[1]

Two other protein-based products that had historically been significant contributors to overall revenues, Intefen and Inleusin, are seeing slowing sales due to unfavorable pricing and increased competition. Since early 2004, those products are marketed primarily by distributors. Intefen was launched in the Chinese market in 1995 and Inleusin in 1996.[1]

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Sales and marketing

3SBio sales and marketing force is present in 18 provinces and major cities in China, including the the cities of Beijing and Shanghai and the city of Guangzhou. Its main products are marketed by 143 sales and marketing professionals and sold by a network of approximately 80 distributors to healthcare providers including an estimates 800 hospitals, clinics and dialysis centers. The internal sales and marketing staff details the main products to physicians and hospital administrators. Legacy products Intefen and Inleusin are marketed by distributors. The sales force in China has over ten years of experience in marketing protein-based therapeutics. The Shenyang Sunshine brand is said by the company to be widely recognized throughout the PRC for quality and reliability.[1]

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Manufacturing

The bulk manufacturing activities for EPIAO, TPIAO, Intefen and Inleusin take place at 3,000 square meter Shenyang facility. It also manufactures product candidates for clinical trials. A portion of exported products are packaged in Shenyang and the rest is shipped overseas in bulk format as concentrated solutions. The Shenyang facility was re-certified in 2005 in accordance with Chinese current Good Manufacturing Practices, or cGMP, and its cGMP certificate is valid for five years, to 2010. 3SBio plans to expand plant in Shenyang to take further advantage of the relatively low cost of labor and raw materials.[1]

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Ownership

Chairman Dan Lou, CEO Jing Lou, and VP Linging Xu are among a group of the company's executives who together own about 31% of the company through Achieve Well International.[2]

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NASDAQ IPO

On February 7, 2007, 3SBio's American Depositary Shares (ADS) began trading in NASDAQ. The IPO was priced at $16 per share and was expected to receive net proceeds of $102 million from the offering.[4]

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Products

The following list was obtained from the company's website.

  • EPIAO®
    • Common Name: Recombinant Human Erythropoietin Injection
    • Indications: Anemia associated with renal failure: including patients on hemodialysis (HD) and non-dialysis (ND), Peri-operative red blood cell mobilization, and Anemia associated with chemotherapy in cancer patients with non-myeloid malignancies.
    • EPIAO was first approved for the treatment of peri-operative red blood cell mobilization and anemia associated with chemotherapy in cancer patients in China.
    • On march 20, 2007 the company received approval to produce and market pre-filled syringe version of EPIAO in ,000 IU, 3,000 IU, 4,000 IU and 10,000 IU doses from China's State Food and Drug Administration (SFDA). This pre-filled syringe will enable patients to self-administer the drug at home. [3]

Author's note: In the United States, various versions of artificial Eythropoietin is currently marketed by companies like AMGEN (AMGN) under brand names Epogen and Aranesp; and Johnson and Johnson (JNJ) under the brand name of Procrit. The patent protection for Erythropoietin biologics have recently expired in the US and Europe and currently generic versions of EPO's are being developed worldwide. The worldwide market for EPO protein is about $10 billion worldwide. [5]

  • TPIAO®
    • Common Name：Recombinant human thrombopoietin injection
    • Indication : TPIAO is suitable for the thrombocytopenia associated with chemotherapy in cancer patients with solid tumours.
    • TPIAO is developed by Sunshine itself as National Class I New Drug, which is the first recombinant human thrombopoietin approved launched on the market all over the world. rhTPO is considered to another landmark of biopharmaceuticals after rhEPO and rhG/GM-CSF.
  • INTEFEN®
    • Common Name: Recombinant Interferon α-2a Lyophilized Powder & Injectable solution.
    • Indications:
      • Lymphatic or haemopoietic tumor: Hairy cell leukemia, multiple myeloma, non-Hodgkin’s lymphoma, chronic myeloid leukemia
      • Viral disease:
Chronic hepatitis B patients with indicators such as positive HBV-DNA, positive DNA polymerase and positive HBeAg; Acute and chronic hepatitis C patients with indicators such as positive HCV antibody, elevated serum alanine aminotransferase (ALT) and without compensated liver disease (Child class A) condylomata acuminata
  • INLEUSIN®
    • Common Name: Recombinant Human Interleukin-2 Lyophilized Powder
    • Indication: INLEUSIN mainly is indicated for treatment of metastatic renal cell carcinoma (RCC), malignant melanoma and control of carcinomatous hydrothorax and hydroperitoneum.
  • Tietai Iron Sucrose Supplement
    • Tietai Iron Sucrose Supplement, an intravenously administered prescription drug that is designed to treat anemia associated with iron deficiency.
    • Indication: for patients with end-stage renal disease requiring iron replacement therapy. 3SBio in-licensed five-year exclusive PRC distribution rights for this product from Shenyang Borui Pharmaceutical Company Limited in May 2006. Tietai Iron Sucrose Supplement was launched in China in 2005.
  • Baolijin
    • Baolijin is in-licensed recombinant human granulocyte colony-stimulating factor, orG-CSF, product. G-CSF is a protein that stimulates production of white blood cells.
    • Indications: treatment of neutropenia, a condition associated with chemotherapy and characterized by low levels of neutrophils, a type of white blood cell important for fighting infections.
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News Feed

07/01/09 2:07 pm The Meat of a One-Drug Wonder (at Motley Fool)
06/26/09 9:06 am Expect FDA Approval of AMAG Pharmaceutical's Feraheme (at Seeking Alpha)
06/04/09 3:06 pm Beat the Market in 7 Easy Steps (at Motley Fool)
05/21/09 1:05 pm 3S Bio: Post-Earnings, Still a Buy (at Seeking Alpha)
05/21/09 9:05 am 3SBio Stays a Buy, Post-Report (Zacks.com)
05/20/09 7:05 am 3SBIO INC Earnings Call scheduled for 8:00 am ET today (CCBN)
05/19/09 4:05 pm 3SBio Inc. Announces Unaudited First Quarter 2009 Results (PR Newswire)
05/19/09 6:05 am Q1 2009 3SBIO INC Earnings Release - After Market Close (CCBN)
05/05/09 6:05 am 3SBio Inc. Announces Appointment of Ernst & Young Hua Ming as Independent Auditor (PR Newswire)
05/04/09 6:05 am 3SBio Inc. to Report 2009 First Quarter Earnings on May 19, 2009 (PR Newswire)
More News...
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Risks

  • Foreign currency risk associated with investin in ADR/ADS
  • Regulatory and reporting risk. While listing in NASDAQ subjects the company to the strict standard of auditing and reporting set by the US Securities and Exchange Commission (SEC) and GAAP, it is harder to enforce than for US companies.
  • On 01/23/2007, National Development and Reform Commission (NDRC) of PR China released a new policy applying maximum retail prices on 354 medicines Link. Recombinant Human Erythropoietin Injection is on that list Link. The average price cut for EPO products is about 20%.

Link to Risk Factors section from form F-1 and prospectus filed to the SEC as part of the IPO.

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Research Links

3SBio Inc. Snapshot
3SBio Inc. Leadership
3SBio, Inc. Fundamentals
3SBio, Inc. Technical Analysis
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Message Boards

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Notes

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 F-1 SEC IPO Filling
  2. ↑ 2.0 2.1 Hoover's capsule
  3. ↑ 3.0 3.1 3SBio Inc. Announces Addition to Product Portfolio, Approval of Licenses for Pre-Filled Syringe EPIAO Products," prnewswire.com, March 20, 2007. Accessed March 29, 2007.
  4. ↑ 3SBio Inc. Announces Pricing Of Initial Public Offering, Reuters, February 7, 2007. Accessed February 15, 2007.
  5. ↑ Wikipedia article on Erythropoietin . Accessed on February 15, 2007
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