Wed, Apr 19, 2017 - Page 12 News List

TaiGen tries to allay fears

By Ted Chen  /  Staff reporter

TaiGen Biopharmaceuticals Holdings Ltd (太景醫藥研發控股) yesterday attempted to allay investors’ concerns about rumors that the government might cut its investment in the biotechnology sector.

The company on March 29 received 137 million yuan (US$19.9 million) from China’s YiChang HEC ChangJiang Pharmaceutical Co Ltd (HEC, 宜昌東陽光長江藥業) for the two companies to jointly develop and market a new treatment cocktail of two oral direct-acting antiviral agents to treat chronic hepatitis C, TaiGen chief operating officer Hsu Ming-chu (許明珠) told reporters yesterday.

The company is expecting to receive partial payment for its intellectual property contribution, which is worth about US$50 million in total, Hsu added.

The company is also eligible for further milestone payments of US$20 million — payable in US$5 million installments — as the new cocktail treatment advances through clinical trials and drug approval processes, Hsu said.

“Although we were not notified by the government, our investors became very concerned after learning that the National Development Fund [NDF] would pull its investment from TaiGen and other biotechnology companies,” Hsu said. “TaiGen’s partnership with HEC allows the company to commercialize our research findings early in the development cycle, which ensures long-term funding and preserves the interests of our shareholders.”

The company’s comments came after the Chinese-language Economic Daily News reported that the fund has drawn up exit mechanism rules to liquidate poorly performing investments in companies that have reported net losses for the past three consecutive years.

The NDF was established in 2000 to advance innovative, but high-risk and capital-intensive industries in which private-sector investors have shown little interest.

As more than half of the 14 biotechnology investees have since been listed on the local bourse, the time is ripe for the government to take profits and divert resources to other emerging industries, the NDF was quoted as saying in the report.

The NDF said that as an investor, the government is bound to sell its positions eventually and the time has arrived as biotechnology investees have matured, the report said.

The NDF said that it is not targeting the biotechnology sector and share selling would be executed without causing disruptions to companies and the markets, adding that it has unrealized investment gains of about NT$15 billion (US$493.32 million), the report said.

In related news, biotechnology companies expressed concern over being left out of President Tsai Ing-wen’s (蔡英文) promise to develop the “five plus two” industries.

The government still lacks a clear vision to steer the industry’s development and has not provided them any guidance, the companies said, adding that the National Health Insurance system provides them with a far lower drug reimbursement rate than the private sector.

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