Yesterday, Bohai Pharmaceuticals Group, Inc. announced that it has entered into a binding agreement with Shandong Daxin Microbiology Pharmaceutical Industry Co., Ltd. to acquire the rights to 14 approved Traditional Chinese Medicines that were previously issued to Daxin by the State Food and Drug Administration of China. The purchase price is approximately $7.2 million of which approximately $3 million will be paid within 15 days from the execution of the agreement.
Bohai’s 14 newly acquired medicines will be added to the 29 traditional Chinese medicine products that the Company is authorized to produce, of which 15 are currently in production. The product acquisitions will expand Bohai’s delivery platforms to include two new categories: powder and pellet formulations. Four of the medicines being acquired are currently included on the EDL and an additional five medicines are included in the NDRL. Additionally, 3 of the 14 are prescription medicines and 11 will be available for over the counter sales. Inclusion on either the EDL or NRDL allows for up to 100% insurance coverage by the Chinese government.
Mr. Hongwei Qu, Chairman, President and CEO of Bohai Pharmaceuticals Group, commented, “Bohai is excited to significantly expand our potential product offerings with the acquisition of these 14 products, which we believe offer great value to our shareholders. The ongoing national health insurance reform promises to drive tremendous growth in the Chinese markets, particularly with respect to TCM and in rural areas, where over 900 million people reside. Patient purchased drugs from the EDL will receive 100% government coverage, so ensuring Bohai expands patient options for medicines on this list will be a key component of our growth strategy. Importantly, these new products will leverage our existing 300 person sales-force and help us gain additional TCM market-share in China.”