Anti-HIV Bio-Oriented Drug Production Project

1. Introduction to the Project

1.1 Project Background

1.1.1 Product Introduction

Anti-HIV biological oriented drug is one of the important means to treat AIDS. Anti-HIV "biological missile" is new type anti-HIV drug with specifically targeted killing function. It is mainly used for AIDS treatment and adjuvant therapy, and occupies an important position in the medical field. The technology adopted in the project is to make anti-HIV agent into missile, and point to the precise target in cells—the RNA of HIV. Once the target is hit, the anti-viral divide RNA into two, and make it harmless.

1.1.2 Market Prospects

AIDS is a worldwide lethal infectious disease, and no curable drug has yet been found, nor the prevention vaccine. Looking back over the past 25 years, the spread of AIDS has far exceeded people's worries and estimates. HIV (the AIDS virus), which is unknown 25 years ago, has infected more than 60 million people till now in the world, of which, more than 20 million people have died, including 3.8 million children. In addition, unfortunately, the spread trend of AIDS has not slowed down. In fact, the spread of AIDS is more severe than in the past. According to World Health Organization data, about 5 million people are infected with HIV each year worldwide, and 3.1 million people die of it. The situation of AIDS in our country is also very serious. Since the discovery of the first case of AIDS in China in 1985, the number of HIV-infected persons in China has reached more than 1 million, the second largest in Asia. Unless effective treatment is found, most HIV-infected patients will die within 10 years.

The rapid spread of AIDS in various regions of the world prompts the booming of production and sales of anti-HIV drugs, and the annual sales growth rate of AIDS drugs are about 13% -15%. In the many of anti-HIV drug manufacturers, GlaxoSmithKline, Bristol-Myers Squibb and Abbott has become the top three, accounting for 3/4 of the global sales. The United States now has the biggest demand for AIDS drugs. But in Brazil, India, South Africa and Thailand, due to a surge in the number of HIV / AIDS patients, the market demand is also rapidly expanding.

The AIDS patients in our country are now spreading from high-risk groups to the general population, and the infection rate is 30% per annum. Currently, more than 1 million people have been infected with HIV. Therefore, AIDS has become a serious problem facing our country, and the situation is very serious. After the localization of anti-AIDS drugs, if the drug price of each patient in each year is 3000 yuan, the market space is at least 3 billion / year. Previously, all the anti-HIV treatment medication relies on imports, and the annual per capita drug cost is at least 30000-50000 yuan. As of the end of 2011, the number of China's living HIV-infected people and AIDS patients is approximately 780,000, the newly infected people is 48,000, and 28,000 people die of AIDS-related diseases.

One after another, domestic anti-AIDS manufacturers shift the profit-earning point of this variety to export of bulk drugs. For example, Xiamen Maike Biochemical Co., Ltd. has become the major raw material supplier of big pharmaceutical factories in India, South Korea, and Brazil, and has relatively big impact on the output and price trend of the anti-AIDS drug of Zidovudine. The annual export of anti-AIDS bulk drugs has totaled $ 50 million. Currently, due to patent and market operation reasons, the patent anti-AIDS drugs have no mature brand, mainly relying on import, leaving a huge gap in the market.

From market positioning, it mainly depends on domestic market, taking into account the international market.

From market sales channels, it mainly relies on agents, commercial pharmaceutical companies.

The project has medium-scale investment. It can integrate existing resources, with short construction period; it also has labor, technology, manufacturing cost advantage, and can take the low-cost market differentiation strategy.

1.1.3 Technical Analysis

The technology used in this project is the self-owned technology of research institutions within the park. It mainly starts from research on AIDS pathogen, with virus genome structure and function research as the starting point. It makes full use of the study fruits and comprehensive knowledge in modern molecular virology, molecular biology, immunology, epidemiology, bioinformatics etc., carries on study on new genetic engineering, and develops a kind of vaccine that can effectively trigger and restore its immunity and control the disease.

1.1.4 Advantageous Conditions of Project Construction

（1）Policy conditions

The national "12th Five-Year Plan" proposed to develop modern industrial system, improve the core competitiveness of industries, transform and upgrade manufacturing industry, and foster the development of strategic emerging industries. "The decision of the State Council on accelerating the cultivation and development of strategic emerging industries" was promulgated. Biological industry has become one of the strategic emerging industries for key cultivation and development. The “12^th Five-Year” has become the key period for the overall arrangement of strategic emerging industries.

The General Office of the State Council officially issued “Action Plan of China on containing and fighting against AIDS during the 12th Five-Year”. According to the plan, China will invest 70 billion yuan in the prevention and treatment of AIDS in the next few years to. At the same time, it decides to exempt the value-added tax from national anti-AIDS drugs, implements designated production, and includes it into the National Drug reserve plan. Till the end of 2015, the trend of rapid rise of the AIDS epidemic in key areas and key groups has been basically contained. The number of new AIDS infections is reduced by 25% from 2010, and AIDS mortality is decreased by 30%. The number of living people infected with AIDS and AIDS patients is controlled at about 1.2 million.

Changchun High-Tech Zone has developed the “measures of Changchun High-tech Zone for preferential policies in investment attraction of strategic emerging industries”. Favorable policy support will be given according to the investment amount and construction scale of the project.

（2）Location advantage

ChangchunCity, where Changchun High-tech Zone is located, is the geographic center of Northeast Asia and China's three northeastern provinces. It is the inland port for Chang-Ji-Tu to lead the pilot area, with favorable location conditions. Changchun High-tech Zone is located in the key area for future urban development of Changchun: the Southern District of Hi-tech Zone is near the Southern New City of Changchun, which is the future city center; the Northern District of the Zone is the core area of Changchun Northeast Development and Opening Pilot Zone, the key area for industrial development of Changchun City in the future. Changchun High-tech Zone is located in important location of ChangchunCity, making Changchun High-tech Zone have more superior regional conditions than ChangchunCity. These superior geographic conditions not only create favorable conditions for a new round of rapid development of High-tech Zone, but also are conducive to for the High-tech Zone to further play the radiation, driving and demonstration role of the High-tech Zone.

The preliminary project location is in the Changchun northeast core area of Changchun High-tech Industrial Development Zone. In the north district, the “seven connections and one leveling” has basically been completed, with basic conditions for project construction and operation. Changchun High-tech Zone is the first batch of state-level development zone approved by the State Council in 1991, with an area of 150 square kilometers. After 21 years of development, Changchun High-tech Zone has formed good industrial base, strong ability to innovate and prominent brand advantage. The High-tech Zone has been the advanced State High-tech Zone appraised by the Ministry of Science and Technology, and owns 12 national parks and bases.

Moreover, Changchun has developed three-dimensional traffic network. In the aspect of railways, Changchun is an important railway transportation hub in northern China. With Beijing-Dalian line, Chang-Bai line, and Chang-Tu line as the backbone, an east-west-north-south railway network has been formed, with direct access to nearly 40 cities across the country; in highways, Beijing-Harbin high-speed highway, Chang-Ha high-speed highway, Chang-Si high-speed highway, Chang-Ji high-speed highway, Chang-Ping high-speed highway, Chang-Ying high-speed highway, and around-city highway etc. many highways, as well as 302, 102 etc. State Road criss-cross, extending in all directions; in the aspect of aviation, ChangchunLongjiaInternationalAirport is an important regional hub airport in the northeast region, with more than 60 direct flights to more than 20 cities across the country every day. Many international routes lead to Seoul of South Korea, Erkucike of Russia etc. important cities in northeast Asian countries. Developed transportation network lays an excellent location foundation for Changchun High-tech Zone to become the regional economic center of Northeast China and an important platform for Northeast Asia Cooperation.

（3）Technical advantage

Changchun High-tech Zone is settled by over 100 pharmaceutical companies, 13 enterprises have output value exceeding 100 million yuan. The produced variety covers over 400, with more than 150 under-research projects. There are a number of biopharmaceutical companies, and a large batch of biological vaccines and genetically engineered products account for a considerable share on the domestic and foreign markets. Of the ten genetically engineered drugs approved by the city, there are six from the High-tech Zone. Of the 26 kinds of vaccine products with production capacity in ChangchunCity, 24 kinds are from the High-Tech Zone. For example, chicken pox vaccine accounts for over one third of the South Korean market. The zone owns Asia's largest vaccine and cytokine production base. The production capacity of interferon ranks the first in the country. The sales of attenuated hepatitis A vaccine account for more than 40% of the domestic market. Interleukins, human growth hormone and other biological drugs are sold in the domestic and foreign markets. The AIDS vaccine developed by enterprises in the zone first enters clinical research in the country.

In Changchun High-tech Zone, there is Changchun Biological Products Institute, Genetic Engineering Institute of Quartermaster University of the PLA, Changchun College of Traditional Chinese Medicine, Research Center of Combinatorial Chemistry of Jilin University, Enzyme Engineering State Key Laboratory of Jilin University, Genetics and Cytology Institute of Northeast Normal University, and Herbal Medicines College of Jilin Agricultural University etc. medical research institutions. This constitutes a multidisciplinary technology integration advantage, which is rare in the country.
（4）Human resource advantage

Changchun High-tech Zone is a famous high-level talents concentration area in China. Over ten famous universities and colleges, such as Jilin University, Changchun Institute of Light Machine, are located in the area. There are over 100,000 undergraduate students, and over 10,000 doctors and masters. Changchun Branch of Chinese Academy of Sciences, Changchun Institute of Light Machine, Changchun Applied Chemistry Institute etc. 39 national and ministerial level research institutions, 12 research institutions, 8 computing testing centers and 11 key open labs of the nation in Changchun are all concentrated in Changchun High-tech Zone. It owns 200,000 talents of every field, including professional technical talent of 50,000, and 6,000 senior talents participated in starting business, accounting for over one half of that in Changchun City. The percentage of scientific and technological talents is as high as 16.6%. The scientific research strength is concentrated, scientific instruments and equipments are concentrated, technological information and intelligence is concentrated, and hi-tech and scientific fruits are concentrated. It is the famous high-level talents concentration area and ideal place for developing hi-tech industry. Changchun has a long history in bio-pharmaceutical and traditional Chinese medicine industry, with a lot of industrial workers in this field.

（5）Industrial foundation advantage

Changchun High-tech Zone exerts the advantage of R & D and innovation, promotes industrial agglomeration, strives to improve the international competitiveness of the bio-pharmaceutical industry, drives the regional industrial structure optimization and upgrading, and constructs nine public platforms. First: experimental animal breeding and experimental center; second: test center of genetically engineered drugs; third: technology center of biological enzyme engineering; fourth: vaccine research and development engineering center; fifth: drugs screen center; sixth: research center of Chinese medicine formulations; seventh: food and drug inspection and information consulting service center; eighth: public platform for Chinese medicine pretreatment; ninth: irradiation and sterilization device center. The construction of the nine platforms will play a crucial role for improving the biological and pharmaceutical industrial chains, and is conducive for enterprises to settle in the zone and invest in factories.

Of the 87 pharmaceutical companies in Changchun, there are 20 enterprises with annual output value exceeding 100 million yuan, and 26 enterprises with single variety of over 10 million yuan. Currently, in the city's 4,036 registered pharmaceutical varieties, there are more than 120 biopharmaceutical varieties. In 2008, the output value of the city’s biopharmaceutical industry accounted for 79% of the output value of the city's pharmaceutical industry, and bio-pharmaceutical profits and taxes account for 81% of the total profits and taxes of the city's pharmaceutical industry, which has laid the industrial foundation for biopharmaceutical industry in Changchun. The distinctive bio-pharmaceutical enterprise group, led by Changchun Institute of Biological Products, Changchun Changsheng Technology, Changchun Kinsey Pharmaceutical, Jilin Xiuzheng Pharmaceutical, has been formed.

ChangchunCity has a large batch of fresh meat slaughtering and processing enterprises, such as Haoyue Group, Huazheng Group, Deda Group etc. The enterprises not only provide delicious food for the people, more importantly, they can provide more experimental animal samples for biological and pharmaceutical enterprises. Thus they are favorable resource backing for developing genetic engineering, and serum extraction industry.

（6）Platform advantage

1.2 Content and Scale of Project Construction

1.2.1 Product Scheme and Scale

Annually produce 3 million pieces.

1.2.2 Construction content

It covers an area of 20,000 square meters; the main buildings include the R & D building, production workshop, with a construction area of 14,000 square meters; it will introduce more than 30 sets of advanced laboratory equipments.

1.3 Total Investment and Funds Raising of the Project

Total investment of the project is 200 million yuan, including construction investment of 109 million yuan, interest incurred in construction period of 2.46 million yuan, and working capital of 88.4 million yuan.

Table 1 List of Total Investments of Project Unit: 10,000 yuan

No.	Name of expense	Investment amount	Percentage to total investments %	Remarks
1	Construction investment	10914	55
2	Interest incurred in construction period	246	1	Capitalized interest
3	Working capital	8840	44
4	Total investments of project（1+2+3）	20000	100

Note: the “10,000 yuan” in the table is RMB.

1.4 Financial Analysis and Social Evaluation

1.4.1 Major Financial Indexes

In normal year of this project, it will realize operating income of 1.2 billion yuan, profit of 200 million yuan, financial internal rate of return of total investment of 80%, payback period (after tax) of all investment of 2.8 years, and profit rate of investment of 85%.

List of Major Indexes for Financial Benefits Forecast

No.	Name	Unit	Index	Remarks
1	Operating income	10,000 yuan /a	120000	Normal year
2	Total profits	10,000 yuan /a	20000	Normal year
3	Financial internal rate of return of all investment	%	80	After tax
4	Financial net present value（Ic=10%）	10,000 yuan	144000	After tax（operation period is 10 years）
5	Payback periodof total investments(after tax)	a	2.8	Including construction period of 2 years
6	Profit rate of investment	%	85

Note: the “10,000 yuan” in the table is RMB.

1.4.2 Social Evaluation

The project is based on solving the problems facing humanity, aims at serving the health of people. At the same time, it has good social effects and response. The implementation of this project not only can share the good economic benefits in the local development, but also has great social benefits in increasing jobs and introducing high-tech talent, etc.

1.5 Cooperative Ways of the Project

Joint venture cooperation.

1.6 What to be Invested by Foreign Party

Capital.

1.7 Construction Site of the Project

The Changchun Northeast Core Area of Changchun High-Tech Development Zone

1.8 The On-going Condition of Project

Project cooperation plan has been compiled.

2. Introduction to Partner

2.1 Basic Conditions

Name: Administrative Committee of Changchun National High-Tech Industrial Development Zone

Address: 3333 of Silicon Valley Street, Changchun City

Legal representative: Sun Yaming

2.2 Overview

Changchun High-Tech Industrial Development Zone is one of the first batch of state-level high-tech industrial development zone approved by the State Council in 1991. It is the first development zone in JilinProvince, and the first state-level development zone. It is located in the southwest of ChangchunCity, known as "City of Science and Technology", “CulturalCity", with a total area of 78.6 square kilometers.

Changchun High-tech Zone has created a BiomedicalPark, Modernized Science and Technology Industrial Park of Traditional Chinese Medicine, PhotovoltaicTechnologyIndustrial Park, Automotive Research and DevelopmentPark, ChangchunSoftwarePark, and New Material Industrial Park etc. The development pattern of multi-parks in one zone has formed. The Biomedical Park and Modernized Science and Technology Industrial Park of Traditional Chinese Medicine is settled by 110 pharmaceutical enterprises, and 13 enterprises have output value of over 100 million yuan, with over 400 varieties, and more than 150 research projects. There are many biopharmaceutical companies, and a large number of biological vaccines and genetically engineered products account for a considerable share of the domestic and foreign markets. Of the 10 genetically engineered drugs approved by the city, 6 are from the High-tech Zone. Of the 26 kinds of vaccine products with production capacity in ChangchunCity, 24 kinds are from the High-tech Zone. The zone has Asia's largest vaccine and cytokine production base. The production capacity of interferon suppositories ranks the first in the country. The sales of attenuated hepatitis A vaccine account for more than 40% of the domestic market. Interleukins, human growth hormone and other biological drugs are sold in the domestic and foreign markets. AIDS vaccine developed by enterprises in the region enters the clinical research first. The Modernized Science and Technology Industrial Park of Traditional Chinese Medicine, as the main park of the National Modernization of Traditional Chinese Medicine Industry (Jilin) base, has been settled by Jilin Tian Pharmaceutical, Xiuzheng Pharmaceutical and Chenguang Pharmaceutical etc., which produce 21 varieties of national protected Chinese medicine.

In 2010, the total revenue and total industrial output value of Changchun High-tech Development Zone had exceeded 200 billion yuan, realizing 239.6 billion yuan, 237.4 billion yuan respectively, which is 1.8 times that of 2008, of which: the disposable financial resources exceeded 9 billion yuan, 25 times of 2008. Changchun High-tech Zone will create two trillion yuan economic uplift belt around “five industrial parks” of advanced equipment manufacturing, biological medicine, new materials, and new energy etc. It will accelerate the construction of Changchun Northeast Technology Innovation Center, Business Center, production means logistics center of science and technology, as well as sports and leisure center in the south district of Changchun High-Tech Zone, and construct high-end service area; it will also pay close attention to professional investment attraction, and begin targeted investment attraction around the cultural and creative industrial park in the south district of Changchun High-Tech Zone, Comprehensive Technological Enterprise Incubator in the north district, Olympic Park, as well as Cultural Tourism Industrial Park. It will strive to introduce three Fortune 500 companies and ten 10 central enterprises.

Sun Yaming, director of the Administrative Committee, male, born in August 1957, Han, member of the Chinese Communist Party, postgraduate degree from the Provincial Party School, was member of the standing committee of Changchun Lvyuan Party Committee, secretary of Commission for Discipline Inspection, member of the standing committee of Lvyuan District Committee, director of the Organization Department, deputy secretary and mayor of Lvyuan District Committee, secretary of Kuancheng District Committee. Currently, he is assistant mayor of ChangchunCity, director (Vice municipal level of ChangchunCity). On July 22, 2011, the 13^th session of the Standing Committee of NPC of Changchun held the 28^th meeting. On the meeting, Sun Yaming was appointed vice mayor of ChangchunCity.

2.3 Contact Method

Contact person of project undertaker: Li Tiangang

Tel：13578712560

Fax: 86-431-85542548

E-mail：lee-66666@163.com

Website of development zone: http://www.chida.gov.cn/

Contact person of city (prefecture) of project：Lou Huimin

Tel：0431-82715338 13943008496

Fax：0431-82715338

E-mail：cc82715338@126.com

Website of city or prefecture：www.ccmbc.com

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