Although there are questions that arise about investing in certain sectors of the Chinese marketplace, with regard to quality and counterfeiting, some companies take a slightly differing approach by setting up shop in countries outside of China and then selling into it. These companies can take many forms but ultimately come away with a solid reputation for quality products and services. Due diligence is still a strong requirement but if the company seems to be moving forward on schedule, and with the blessing of other known entities, it may offer a nice return.
Aoxin Pharmaceuticals Co. Inc., a specialty pharmaceuticals company, researches, manufactures and distributes pain management products primarily within China. The company offers both prescription and over-the-counter products. It was founded in 2002 and is based in New Jersey, USA.
The company’s main product is a pain management line based on opioid. Its main target market for this product line is pain, shock and alcoholism. Currently, the company has agreements with several research and development pharmaceutical companies around the world and a manufacturing/licensing agreement with Phoenix Pharma Labs for a new class of molecules involving a poly-receptor opioid directed at pain issues. From a general perspective, it would appear that Aoxin’s thrust is through research agreements at the moment although manufacturing ability should not be discounted.
The company is quickly reaching new milestones in its development. Recently announced plans to join the Russell 3000 have spurred keen interest in the company while bank financing and a bank note arrangement of $8.5 million with China Citic Bank and Bank of Communications of China have made headway toward paying down debt and the ability to follow general expansion plans. In the case of the company’s financing, one might consider a floating 5.8% rate to be slightly higher than expected but is considered by company executives as “attractive” given current conditions and past finance arrangements. From a certain perspective, the rate might have been even better given that these facilities are secured by land use rights and buildings/equipment located in prime Chinese districts.
Third quarter 2010 income was $1.5 million, similar to the same period one year earlier. In this regard, income would have been higher had it not been for recertification delays involving pill capsules and the start-up of a new manufacturing line. From a general perspective, however, Aoxing Pharmaceuticals is hitting its marks and making new alliances in every aspect of the Pharma game. Notice is being taken by the industry, making it one to watch.
Let us hear your thoughts below: