Medigen Biotechnology Corp (基亞), a specialty pharmaceutical company, on Friday announced plans to acquire a 68 percent stake in Winston Medical Supply Co (溫士頓) through share swap, as it aims to add more production capacity to manufacture a new drug for hepatocellular carcinoma.
Hepatocellular carcinoma (HCC) is a common type of liver cancer in Taiwan. Medigen is currently working on the phase-three clinical trials of the new drug for HCC, Muparfostat, formerly known as PI-88, for which the company expects to obtain regulatory approval next year.
The drug was selected by the Department of Health, now the Ministry of Health and Welfare, to apply for new drug certification simultaneously in both Taiwan and China under the cross-strait Economic Cooperation Framework Agreement.
“Apart from the production of the drug by Australia’s Progen Pharmaceuticals Ltd, we expect to manufacture it at Winston’s factory to supply Taiwan, China and neighboring countries,” Medigen said in a filing to the Taiwan Stock Exchange on Friday.
Medigen reached a deal with Progen in 2010 to jointly develop and produce PI-88. The company is almost finished recruiting 500 people in Taiwan, South Korea, China and Hong Kong for the phase-three trials of the drug.
According to information on Winston’s Web site, the Greater Tainan-based company is constructing a new factory in Yungkang District (永康), which is to meet the standards set by the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Cooperation Scheme.
Medigen said the deal would also allow it to benefit from Winston’s domestic distribution network and sales expertise, after they jointly bring the PI-88 to the local market.
Under the deal, each of Medigen’s 2 million new shares will be exchanged for nine of Winston’s shares, the Taipei-based company said in the filing.
The share swap is expected to be completed on Jan. 10, if the deal receives the go-ahead from the Financial Supervisory Commission.
Medigen reported NT$66.88 million (US$2.27 million) in sales during the first 10 months of the year, down 23.97 percent year-on-year, with net losses expanding to NT$123.9 million in the first half of the year, from NT$115.3 million during the same period of last year, data showed.
Shares of Medigen fell by 1 percent to NT$198 in trading on Friday ahead of the announcement of the share swap deal.