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JZMed, Inc.

China Pharma Outsourcing News Compile


v

China Pharma Outsourcing


Selected News Compile
First Quarter of 2009

JZMed, Inc.

April, 2009

JZMed, Inc.

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JZMed, Inc. China Pharma Outsourcing News Compile
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Table of Contents

No. Date News Title Page No.

1 January 6 Leading Researchers Establish FORMA Therapeutics to


Integrate Transformative Biology and Chemistry to Address
Challenging Targets and Develop Breakthrough Oncology Drugs 4

2 January 6 WuXi adopts H-Cube for drug discovery 5

3 January 9 e-Therapeutics to Offer Computational Biotech Services from


Nanjing Office 6

4 January 15 Hutchison MediPharma Options Program to J&J 6

5 January 15 Asian pack machine demand a boon US and EU industry 7

6 January 21 Cogenics Partners to Bring Genomic Services to China 8

7 January 22 CEE Could Gain from Asia’s Reputation for Fakes 8

8 January 27 Pharmaceutical Sector Expected To Fast Grow In 10 Years 9

9 January 27 Rem Gets into Bed with PsyPharma for Sleep Studies 10

10 January 28 China's Anti-Cancer Drug Market Forecast Exceeded $3.5 Billion


In 2007 11

11 January 27 Basilea Pharmaceutica Plans to Expand Its Worldwide


Organization add More Than 100 Positions 12

12 January 27 Orexo and NovaMed Pharmaceuticals (Shanghai, China) Signed


A Licensing and Distribution Agreement 12

13 February 5 Step Forward for Vortex Resources and YaSheng Group Merger 12

14 February 5 USP Announces New Standards for Heparin and Glycerin 13

15 February 11 Zhangjiang Park and CRO Sundia MediTech Form Incubator 13

16 February 12 Bayer Schering to Open Beijing R&D Center 13

17 February 12 OriGene Secures $6.5M to Set Up mAb Manufacturing Facility

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in China 14

18 February 12 Charles River Cuts Preclinical Jobs in Global Gloom 14

19 February 16 Research and Markets: China Pharma Outsourcing Market


Forecast to 2015 15

20 February 18 HUYA Joins Forces with the Beijing Institute of Materia Medica 16

21 February 19 Study Raises Questions about Sending Trials Out of U.S. 17

22 February 25 Frontage Deal Expands Service Offering in China 19

23 February 26 Novartis sets $627 M Revenue Goal for China in 2009 19

24 March 3 Immtech Signs MOU with Beijing Pharmaceutical Group 20

25 March 5 Sinovac Receives GMP Certification for Its New Filling And
Packaging Production Facility 20

26 March 9 Tigermed Aims Big with MacroStat Alliance 21

27 March 12 China's Shanghai Ruijin Chooses the Mobetron for Advanced


Cancer Care 21

28 March 22 SGS opens new micro test lab in China 22

29 March 25 AstraZeneca and BioDuro Expand Discovery Contract 23

30 March 25 WuXi PharmaTech Announces Fourth-Quarter and Full-Year


2008 Results 24

31 March 30 SAFC launches service to secure supply chain 25

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China Pharma Outsourcing


Selected News Compile
First Quarter of 2009

1. Leading Researchers Establish FORMA Therapeutics To Integrate


Transformative Biology And Chemistry To Address Challenging Targets And
Develop Breakthrough Oncology Drugs

January 6, 2009

FORMA Therapeutics announced today its debut as an integrated, global drug discovery
company. The Company was founded by leading researchers from the Broad Institute of
Harvard and MIT to integrate important new advances in biology and chemistry to
unlock essential oncology targets that have been elusive to the best scientists in the
industry. FORMA has received initial equity and non-dilutive funding of $25 million
from multiple sources including Novartis Option Fund and Bio*One Capital of Singapore.

Forma’s co-founders from the Broad Institute include Stuart Schreiber, Ph.D. Director of
Chemical Biology and a Howard Hughes Medical Institute investigator; Todd Golub,
M.D., Director of the Cancer Program, and an investigator at the Dana-Farber Cancer
Institute and Howard Hughes Medical Institute; and Michael Foley, Ph.D., Director of the
Broad’s Chemical Biology Platform. Additional members of the FORMA founding team
include: Steven Tregay, Ph.D., President and CEO, formerly Managing Director,
Novartis Option Fund; and Nikolai Kley, Ph.D., Vice President of Biology and Head of
Drug Discovery, formerly Vice President and Head of Research, GPC Biotech.

Genetic studies of human cancers have provided important insights into oncogenic
pathways and their associated drug targets. However, many of such high value drug
targets have posed significant challenges to traditional drug discovery approaches.

“Over the next five years, genomic medicine efforts such as the NIH’s Cancer Genome
Atlas Project (TCGA), will elucidate the genomes of many tumor types and
fundamentally change our understanding of cancer drug targets,” said Dr. Foley. “I
believe that the new tools and capabilities coming out of chemical biology research will
enable the discovery and development of innovative drugs against novel, high value
targets and FORMA is uniquely positioned to capture this opportunity.”

“The strength of FORMA’s scientific platform and the caliber of scientists and industry
executives that have come together to build this company make it a highly promising
investment opportunity in oncology drug discovery,” commented Reinhard Ambros,
Head of the Novartis Venture Funds. “I believe the company’s integrated drug discovery

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approach positions FORMA for success in areas that are considered ‘holy grails’ of
oncology drug discovery such as interfering with protein-protein interactions or
functional activity of transcription factors.”

FORMA is uniquely positioned through its unprecedented combination of technological


capabilities and oncology expertise to access such novel target space and to develop a
new generation of breakthrough oncology drugs. Some of the key features of FORMA’s
discovery capabilities include:

• Versatile cell-based screening platform which allows the screening of discrete targets in
cells and quantitative genome/proteome-wide profiling and target identification.

• Accessing new chemical space through structure guided drug discovery (SGDD)
approaches leveraging proprietary computational and structural biology combined with
our integrated chemistry platform which incorporates Diversity Orientated Synthesis
(DOS). DOS combines the high stereochemical and structural diversity found in natural
products with traditional combinatorial chemistry techniques. This approach has been
proven to work for challenging targets and will allow the rapid optimization of lead
therapeutic candidates.

“Our goal is to develop a robust and sustainable pipeline of truly innovative drugs with
qualified mechanisms of action,” said Dr. Tregay, FORMA’s CEO. “Our internal drug
discovery efforts are focused on targets of high value and interest in oncology; however,
we intend to leverage our platform through collaborations in other therapeutic areas.”

FORMA is a global company headquartered in Cambridge, MA with research operations


in Connecticut, Singapore, and Beijing.

The FORMA Board of Directors includes: Steven Tregay, Michael Foley, Alexis Borisy,
Founder and CEO of CombinatoRx, Reinhard Ambros and Simon Campbell, Ph.D.
Former SVP, Worldwide Discovery and Medicinal R&D Europe, Pfizer.

FORMA Therapeutics is integrating transformative biology and chemistry to unlock the


best targets and pathways that genomics medicine has revealed. FORMA builds on the
vision of its academic founders: Stuart Schreiber, Todd Golub and Michael Foley, each
of the Broad Institute of Harvard and MIT. FORMA leverages its innovative drug
discovery platform to address challenging targets and develop a robust internal pipeline
of breakthrough oncology drugs. FORMA is a global company headquartered in
Cambridge, MA with additional research operations in Connecticut, Singapore and
Beijing.www.formatherapeutics.com

2. WuXi adopts H-Cube for drug discovery

January 6, 2009

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WuXi AppTec is to use ThalesNano’s H-Cube for laboratory-based hydrogenation,
which the CRO believes offers advantages in drug discovery over traditional batch
processes.

By using the H-Cube WuXi joins illustrious company, with ThalesNano claiming that the
world’s top 20 pharmaceutical companies all use the technology.

The H-Cube is a bench-top standalone device that uses continuous-flow microchemistry


with hydrogen needed for the reaction generated in-situ and on demand.

Since the necessary hydrogen is produced in the H-Cube no external storage is required
which reduces the space the system takes up.

Reactions take place on disposable catalyst cartridges, which are modeled after high
performance liquid chromatography (HPLC) systems.

ThalesNano claims that in comparison with traditional techniques the H-Cube is safer,
faster, more cost-efficient and gives increased yields.

Shuhui Chen, chief scientific officer of WuXi AppTec, said: "We are very pleased for the
employment of H-Cube, as Hydrogenation in flow for drug discovery is significantly a
more productive and safer approach than traditional batch-based technique. We are
looking forward to working with ThalesNano as we move to larger scale in the future."

The larger scale model that Chen refers to is the H-Cube Midi that increases the capacity
up to a maximum of 500g a day using the same technology as its smaller sibling.
Consequently WuXi should be able to scale-up its production runs and maintain the same
results.

3. e-Therapeutics to Offer Computational Biotech Services from Nanjing Office

January 9, 2009

e-Therapeutics, a British software firm offering a computational biotechnology platform,


has opened an office in Nanjing that will allow the company to collaborate with
biopharmas in China. The company’s software models the interactions of a given
compound, predicting the degree to which it will bind with the body’s proteins. It can be
used in drug discovery programs to predict efficacy as well as unwanted interactions. In
September 2008, e-Therapeutics announced a partnership with Nanjing KeyGen Biotech.

4. Hutchison MediPharma Options Program to J&J

January 15, 2009

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Hutchison MediPharma Limited and Ortho-McNeil-Janssen Pharmaceuticals, Inc., a
division of Johnson & Johnson have formed collaboration, taking advantage of
MediPharma’s work on a novel inflammation/immunology target. MediPharma will
continue its discovery and development activities through clinical proof-of-concept,
unless OMJPI exercises an option to take over the development. If that happens, OMJPI
will have exclusive rights to develop and commercialize the compounds

5. Asian pack machine demand a boon US and EU industry

January 15, 2009

The market for packaging machinery is set to grow 5 per cent a year and be worth $40bn
(€30.3bn) by 2012, driven partly by a hike in demand for drug products in “pharmerging”
economies, according to a new industry report.

The study predicts that global economic output will improve; enabling higher consumer
spending that in turn will drive greater manufacturing activity and demand for more
efficient packaging machines and processes.

Pharmaceutical manufacturing hotbed China is expected to see the largest growth in


demand for packaging machines with the market set to expand by over $3.3bn through to
2012, toppling the US from its position as global leader.

Additionally, other developing economies like India and Russia, and to a lesser extent
lower volume markets like Ukraine, Indonesia, Malaysia, Saudi Arabia, Mexico and
Turkey, will need more packaging machines as standards of healthcare and consumer
spending continue to increase.

The report also suggests that demand for drug packaging capacity in developed
economics will increase, albeit at a slower pace than in Asia’s booming manufacturing
hubs. Growth in the west will be driven by an aging population and a greater reliance on
single-use disposable packaging.

However, while demand for machines may shift east over the next five years, over 66 per
cent of all the packaging units sold worldwide will be made by manufacturing firms
based in Western Europe, the US and Japan.

US High visibility packaging market also set for gains

Another report released this week suggested that the US market for high-visibility
packaging, including pharmaceutical blister packs, will be worth $8.5bn by 2012,
equivalent to a growth rate of 4 per cent a year.

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Blister packaging will generate around $2.2bn in sales by 2012, a compound annual
growth rate of 4.4 per cent, with the pharmaceutical and healthcare sector under going the
greatest increase in demand for this type of product.
While drug packaging firms are set to be major beneficiaries, industrial plastic resin
makers may be the overall winners. The report predicts that creation of an estimated 34bn
individual packages by 2012 will require nearly 1.2bn pounds of plastic.

6. Cogenics Partners to Bring Genomic Services to China

January 21, 2009

Cogenics has entered into a partnership with SinoGenoMax to bring its clinical
genotyping services to the expanding Chinese market.

By partnering with an established force in the Chinese genomics market Cogenics is


hoping to gain access to clients beyond its primary markets in the US and Europe.

SinoGenoMax provides genomic services to local and international universities, research


institutes and pharmaceutical companies. The partnership should give Cogenics access to
these clients and expand the range of services that the companies can offer.

Michael Lutz, Global Manager of Cogenics, said: “The extensive pharmaceutical and
biotechnology infrastructure and large number of clinical trials conducted in China make
this an increasingly important market for clinical genotyping services.

“Our partnership with SinoGenoMax provides us with an established presence in China


and an experienced international service partner who operates with similar platforms and
high quality standards, thus expanding Cogenics’ offering to our growing global
pharmaceutical customer base.”

Cogenics claims its clients include the top 20 pharmaceutical companies operating in the
US and Europe. Companies in China will now have greater access to these services,
which include next generation sequencing, gene expression and clinical and non-clinical
genotyping.

In addition Cogenics can provide biomanufacturing support, nucleic acid extraction and
biobanking for research and regulated environments.

Cogenics entry into China suggests it believes that the number of clinical trials conducted
in the country will continue to grow, driving demand for related services.

7. CEE Could Gain from Asia’s Reputation for Fakes

January 22, 2009

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A new report suggests the large numbers of fake drugs produced in China could drive
CMO customers away and see Central and Eastern Europe (CEE) emerge as a contract
manufacturing hotbed.

The main thrust of the report is that while Europe has lost out to Asia much in contract
active pharmaceutical (API) production due to higher costs and stricter regulations, the
lack of guidelines in China and India, and susceptibility to rogue producers, will shift the
balance back. In particular, it predicts that Central and Eastern European (CEE) will see
significant gains.

The research, which was carried out by Polish market research firm PMR, quotes a
European Fine Chemicals Group (EFCG) study claiming around 5,000 rogue
manufacturers are operating in China. This argument is in keeping with the litany of high
profile scares about APIs and ingredients sourced in the country that have dominated the
news in recent years.

However, PMR also cites data from the European Chemicals Industry Council (ECIC)
that, in Europe, counterfeiters in Russia and the Ukraine are responsible for a high
proportion of fakes and argues that as a result only certain CEE countries will gain if
confidence in the Asian CMO sector does fall away.

Of these the Czech Republic emerges as the front runner. The report argues that the
country’s drug industry is one of the most developed in the region, particularly in terms
of APIs.

The study also suggests that the Czech biotech industry is developing rapidly and
providing a platform for specialization, although it concedes that many of the companies
currently operating in this market are focusing on the contract production of nutritional
supplements.

In addition the authors suggest that Poland, which like the Czech Republic is a member
of the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-
operation Scheme, may be attractive to drug firm’s seeking an alternative to China.

8. Pharmaceutical Sector Expected To Fast Grow In 10 Years

January 27, 2009

Insiders estimated that the new medical reform plan would bring about much positive
influence on the Chinese pharmaceutical industry in the following ten years, and the
listed pharmaceuticals producers with high growth potential are expected to allure more
investors

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On January 21, 2008, the State Council, China's cabinet, passed the final medical system
reform scheme, and up to CNY 850 billion is planned to be pumped into the domestic
healthcare and medical treatment sector from 2009 to 2010.

The Chinese central government plans to come up with the basic medical insurance
system across the country before 2011 and thus more citizens can lighten their burdens of
medical expenses. In the upcoming three years, China will commit itself to lifting the
participation ratios of the basic medical insurance system for urban employees and the
new rural cooperative medical scheme (NCMS) to over 90%, respectively.

In order to further improve the medical service and to standardize drug prices, the state is
brewing the start-up of the pilot public hospital reform projects.

SOURCE: Chinese pharmaceutical industry

9. Rem Gets into Bed with PsyPharma for Sleep Studies

January 26, 2009

Two US companies specializing in sleep disorders - Rem Medical and PsyPharma Global,
have pooled their resources to offer research services to the pharmaceutical industry.

Rem Medical’s primary business is in the running of sleep disorder clinics. Now, with the
acquisition of a clinical site in Tucson, Arizona, operated by PsyPharma, it will be able to
provide Phase II-IV trial services across a wide range of sleep and related psychiatric
disorders.

PsyPharma specializes in Phase II-IV trials of sleep, psychiatry and neurology disorders,
with operations in both the US and China.

Insomnia treatments are the main product category among sleep disorders and represent a
multibillion dollar market in their own right, albeit one that is mature and heading for
imminent generalization.

But sleep disorders span a broad range of indications, including restless legs syndrome
and obstructive sleep apnoea, which are the focus of considerable research by the drug
development sector.

OSA is one of the fastest growing sectors in the sleep disorder treatment market, with up
to 18 million patients in the US 85 per cent of who are estimated to be undiagnosed.

Rem Medical said in a statement that through the acquisition it has “retained an
exceptional investigative, clinical and administrative team with a track record of quality
trial activity.”

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The Arizona unit is led by Derek Loewy, the principal investigator in over thirty clinical
trials since completing his sleep medicine fellowship training at Stanford University in
2001.

Prior to PsyPharma, Dr Loewy was the director of the insomnia program at the Sleep
Clinic of San Francisco

10. China's Anti-Cancer Drug Market Forecast Exceeded $3.5 B In 2007

January 28, 2009

According to the Chinese Ministry of Health (MOH), there are approximately 2.13
million patients with newly diagnosed tumors (both benign and malignant) each year, of
which 1.06 million are newly diagnosed cancer patients. Cancer has become the leading
cause of mortality in both urban and rural China. According to national statistics data, the
cancer mortality rate of urban Chinese residents is currently 140.47 per 100,000 (21.82%
of all urban deaths) and the cancer mortality rate of rural Chinese residents was 111.57
per 100,000 (16.50% of all rural deaths).

In the Chinese hospital drug market, sales of anti-cancer drugs have risen steadily in
recent years. During 2003-2005, the annual compound growth rate of anti-cancer drug
sales was approximately 24.5%. In 2006, due to the national campaign on anti-
commercial bribery as well as other related government policies, the market growth of
anti-cancer drugs slowed down to approximately 11.1%; however, the growth of the anti-
cancer drug market regained momentum and reached an annual growth rate of
approximately 22.2% in 2007. The total market size for anti-cancer drugs in 2007 was
25.5 billion RMB (3.6 billion USD).

Major topics covered in this report include: Summary of Global Markets of Anti-Cancer
Drugs, Summary of Anti-Cancer Drugs in China, Market Analysis of China's Anti-
Cancer Drugs, List of Brand Names, Generic Names of Anti-Cancer Drugs and their
Corresponding Manufacturers in China, Packaging and Pricing of Anti-Cancer Drugs in
China, Anti-Cancer Drugs on the National Healthcare Insurance Coverage list,
Regulatory and Government Policies for Anti-Cancer Drugs in China, Current Anti-
Cancer Drugs in China, and Current Anti-Cancer Drug Development in China.

Companies covered include: Jiangsu Hansen Pharmaceutical Co., Ltd.(Hansen Pharma),


Jiangsu Hengrui Medicine Co., Ltd., Novartis, Pfizer, Roche, sanofi-aventis, Sichuan
Diao Jiuhong Group, Pharmaceutical Co, AstraZeneca, Bristol-Myers Squibb, Eli Lilly &
Co., Guizhou Baiqiang, Pharmaceutical Co., Ltd., Hainan Zhonghe Pharmaceutical Co.,
Ltd, Jinling Pharmaceutical Co. Ltd., Livzon Pharmaceutical Group Inc., Nanjing
Kanghai Pharmaceutical Co., Ltd., Nanjing Sike Pharmaceutical Co., Ltd., Qilu
Pharmaceutical Co., Ltd., SciClone Pharmaceuticals Italy S.R.L., Shenzhen Wanle
Pharmaceutical Co., Ltd., and Zhejiang Hisun Pharmaceutical Co., Ltd.

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11. Basilea Pharmaceutica Plans to Expand Its Worldwide Organization and Add
More Than 100 Positions

January 27

Basilea Pharmaceutica plans to expand its worldwide organization and add more than 100
positions in order to focus on “Toctino” (alitretinoin) and “Zeftera/Zevtera” (ceftobiprole
medocaril), two drugs it says are high-priority programs, according to a press release. The
company will reduce approximately 30 positions at its headquarters that are mainly
involved in research programs of lower priority, and it will create 17 new positions in
Switzerland and a total of approximately 100 new positions worldwide.

12. Orexo and NovaMed Pharmaceuticals (Shanghai, China) Signed A Licensing


and Distribution Agreement

January 27

Orexo and NovaMed Pharmaceuticals (Shanghai, China) signed a licensing and


distribution agreement that grants NovaMed rights to seek approval to market Orexo’s
product for treatment of cancer pain, “Abstral” (rapinyl), in China. The terms of the
agreement includes an upfront payment, regulatory milestones and sales milestones. The
total value of the deal, which includes an upfront payment and milestones, is $4.75
million.

13. Step Forward for Vortex Resources and YaSheng Group Merger

February 5 2009

In preparation for a possible merger with Vortex Resources, YaSheng Group has released
its annual audited 2006 and 2007 financial statements. The companies previously entered
into a term sheet to develop a logistics center and eco-trade cooperation zone in
California. YaSheng is engaged in agriculture, chemicals, and biotechnology and is based
in the Peoples Republic of China.

The term sheet also gives YaSheng the option to merge other assets into Vortex, a
company that acquires and develops undervalued assets. Vortex currently has operations
in West Texas and Beverly Hills, CA.

By releasing its audited financial statements, the company provides both parties greater
flexibility to close the merger. The transactions described in the term sheet are subject to
the drafting and negotiation of a final definitive agreement, performing due diligence, as
well as board approval from Vortex. This does not guarantee Vortex success with the
proposed merger.

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14. USP Announces New Standards for Heparin and Glycerin

February 5, 2009

Rockville, MD (Feb. 4)—The US Pharmacopeias (USP) Convention has announced new


standards for heparin and glycerin. USP revised the heparin standard at the request of the
US Food and Drug Administration, in response to adulterated heparin product with over-
sulfated chondroitin, which resulted in the deaths of 200 people. Glycerin, a sweetener
and binding agent, has been adulterated in the past by dilution with diethylene glycol.
The new standards for glycerin become official in May 2009, and the new standards for
heparin become official in August 2009 after a public comment period. All manufacturers
of these products are required to comply with the standards.

The US Food and Drug Administration requested a new glycerin standard that establishes
limits for diethylene glycol and revises other “high risk” articles that have similar
applications. FDA also requested a revised heparin monograph to detect the presence of
over-sulfated chondroitin sulfate. In addition, the modernized heparin monograph aims to
provide improved analytical methods, improved measurement of heparin activity, and the
development of associated reference standards (i.e., heparin identity, heparin potency,
oversulfated chondroitin sulfate, and dermatan sulfate).

“These new USP quality standards provide better assurance of the quality of marketed
products by using appropriate and modern analytical methods,” says Moheb Nasr, PhD,
director of the Office of New Drug Quality Assessment (ONDQA), at FDA's Center for
Drug Evaluation and Research (CDER), in a USP press release. “This provides a
considerable safeguard for citizens of the United States and the world by helping to
prevent fraudulent suppliers from adding components that in the past have eluded
existing identity tests due to similar properties. The new standards represent a significant
improvement to the safety nets that keep substandard drugs from reaching the
marketplace. FDA is pleased to have worked together with USP on this effort.”

15. Zhangjiang Park and CRO Sundia MediTech Form Incubator

February 11, 2009

Shanghai Zhangjiang (Group) Co., which operates the Zhangjiang Hi-Tech Park, has
joined with CRO Sundia MediTech Company to expand the concept of a CRO. The two
companies have formed a platform that combines Intellectual Property, CRO and Venture
Capital services in one group, a biopharma incubator that includes its own CRO. The goal
is take a young biopharma from original discovery into clinical trials. At the same time,
the incubator will help draw the best young biopharmas to Zhangjiang Park.

16. Bayer Schering to Open Beijing R&D Center

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February 12, 2009

Germany's Bayer said today it will invest $129 million in a new global research and
development center in Beijing over the next five years. China is the third largest market
worldwide for the Bayer group, and it will become the third country besides Germany
and the U.S. to host such a center for its Bayer Schering Pharma unit. Bayer also said it is
currently in advanced discussions with Tsinghua University on entering into a strategic
partnership to pursue research collaborations for the discovery of new disease-related
targets.

17. OriGene Secures $6.5M to Set Up mAb Manufacturing Facility in China

February 12 2009

OriGene Technologies raised $6.5 million, which allows it to complete the acquisition of
Shenzhen P&A Biotech, a manufacturer and provider of mAbs. With the establishment of
this technology center, OriGene will be able to develop genome-wide mAbs.

With OriGene's China mAb production capacity and genome-wide resources, the
company believes that it can produce several thousand high quality mAbs per year. This
genome-wide mAb production capacity is available to all commercial and academic
partners.

Over the last 10 years, OriGene developed the capacity to produce human full-length
proteins from human cells. It has spent the last two years developing a genome wide
collection of antigen standards and over 100,000 tissue samples for high-quality antibody
validation.

18. Charles River Cuts Preclinical Jobs in Global Gloom

February 12, 2009

Charles River Laboratories will reduce its workforce by 3 per cent, close its preclinical
facility in Arkansas, US and sell off its Phase I trial site in Edinburgh, Scotland as part of
a cost reduction program.

The firm added that it will reduce headcount at its plant in Shewsbury, Massachusetts,
and said the decision to restructure its preclinical services (PCS) division “is reflective of
[its] global client base and the current demand.”

Charles River explained that divestiture of the Edinburgh site, for which it may have
already found a buyer according to the Boston Globe, is a response to the decision by
many of its preclinical clients to shift their trial program to India and China due to
increased regulatory demands in Europe.

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The latest announcement follows on from a poor set of Q4 results that saw revenue from
its PCS business fall 8 per cent to $158.6m (€123m) on a decline in demand it linked to
pharma industry “restructuring and pipeline reprioritization”.

For 2008 the PCS unit performed slightly better, with revenues climbing 4.6 per cent to
$683.6m, although margins declined to 1.6 per cent on costs linked to new preclinical
sites in Shanghai, China and Nevada.

Company CEO James Foster added that the firm’s annual results “reflect the impact of
the global economic crisis and the challenges our pharmaceutical and biotechnology
clients are facing, especially in the PCS segment.”

He added that while the firm considers the economic gloom is temporary, it is using the
period of uncertainty as a window to streamline operations and reduce operating costs by
20 per cent this year.

19. Research and Markets: China Pharma Outsourcing Market Forecast to 2015

Mon Feb 16, 2009

It has been widely accepted that China is now the primary choice of outsourcing
destination for drug companies around the world. In the past eight years Chinese
pharmaceutical outsourcing industry has grown in an average annual rate of 48%.
Starting with chemistry service only, a complete industrial structure with all
service elements now starts shaping. The industry's growth is also accelerated
by the influx of a large number of multinational service providers whose
entrance greatly up-lifted the service capability of this Chinese industry. In
addition, increasing numbers of traditional Chinese pharmaceutical companies and
R&D-oriented Chinese biotechnology companies also join in the service. At
present, about 250 professional service providers, 50 multinational service
providers, 150 traditional Chinese pharmaceutical companies and 20 Chinese
biotechnology companies have formed a joint force in today's China pharma
outsourcing industry. Together, they are serving an ever enlarging body of
outsourcing companies from all over the world. The industry has thus realized
the service revenue of more than $1.4 B.

Nearly a decade development has significantly uplifted the industry and


competition as well. How this Chinese industry would likely develop in the
future has become a common concern to many professionals in all related
industries. The current financial crisis also puts the future development of
this industry into an uncertain path.

Would you like to know how the financial crisis affects this Chinese industry in
both near term and long term? What will the industry look like in five to ten
years? What are the driving forces that keep this industry still fast growing?

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Will China still have cost effective advantage in five to ten years? How does
labor cost likely grow in next few years? How to compare it with that in other
countries?

"China Pharma Outsourcing Market By 2105" is designed to address these issues


and to answer these questions. It is by far the most comprehensive report about
Chinese pharma outsourcing industry and market. It investigated in depth the
development pattern of service capability and market size of this Chinese
industry and first time displayed to the world a complete picture of China
pharma outsourcing industry. In addition, with in-depth analysis of more than 50
case studies, the report also first time revealed how drug companies around the
world conduct outsourcing in China and what outsourcing models are popularly
pursued. More importantly, the report examined in depth both the drivers and
resistors of future development of this Chinese industry. It is also the first
time that a clear picture of future growth and development of this Chinese
industry is depicted.

The report is a must-read book to all professionals in the industries of


pharmaceutical, biotechnology, financial investment and outsourcing service that
are interested in pharma outsourcing in China. It is also a valuable reference
book to drug regulatory agencies and other government agencies involved in
strategic planning of development of pharmaceutical industry in their own
countries.

Key Topics Covered:

* Chapter 1: China's Advantages in Pharma Outsourcing


* Chapter 2. Current Market Size, Service Capability and Existing Issues
* Chapter 3. From Popular Outsourcing Models To Future Development
* Chapter 4. Impact of Financial Crisis: Market Development Forecasts for 2009
and 2010
* Chapter 5. Future Development: Years beyond 2010
* Summary

20. HUYA Joins Forces with the Beijing Institute of Materia Medica

February 18 2009

HUYA Bioscience is partnering with the Beijing Institute of Materia Medica (BIMM) on
preclinical safety and efficacy activities as well as clinical trial protocols. The agreement
also provides HUYA with the right of first review and negotiation for the licensing and
development of certain new compounds owned or controlled by BIMM. This right
includes drugs for cardiology, endocrinology, oncology, immunology, hematology,
neuroscience, and infectious diseases.

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BIMM comprises the Chinese Academy of Medical Sciences and Peking Union Medical
College. It concentrates on discovering and developing treatments by isolating natural
remedies. “For BIMM,” says Xiaoling Wang, M.D., Ph.D., BIMM director, “our
partnership with HUYA signifies an opportunity to bring our expertise and our efforts in
pharmaceutical development to the Western market.”

HUYA CEO, Mireille Gingras, Ph.D., adds that, “HUYA is highly experienced and
uniquely positioned in China to leverage the emerging biotech industry through strong
collaborations. This is the culmination of years of relationship-building and exchange of
knowledge between HUYA and BIMM.”

21. Study Raises Questions about Sending Trials Out of U.S.

February 19, 2009

Major U.S. drug companies are increasingly performing clinical trials in developing
countries, raising serious concerns about the efficacy, ethics and economics of drug
development, according to a study in the current issue of the New England Journal of
Medicine.

"There are powerful forces luring clinical trials overseas, including the lower cost of
doing business and access to larger study populations," says Seth Glickman, M.D., the
study's lead author and an assistant professor of emergency medicine at the University of
North Carolina at Chapel Hill School of Medicine.

"We cannot afford to trade lower costs of drug development for drugs that may be less
safe and less effective," Glickman says.

Since 2002, the number of Food and Drug Administration investigators based outside the
United States grew 15 percent per year, while those in the U.S. dropped by more than 5
percent, the study found.

Glickman and his co-authors reviewed government registries of Phase III clinical trials
and studies of industry-sponsored trials in 2007, and 300 articles reporting clinical trial
results appearing in the New England Journal of Medicine, the Journal of the American
Medical Association and Lancet in 1995 and 2005.

According to the researchers, one-third of these trials from the 20 largest pharmaceutical
companies in 2007 were being conducted outside the U.S., and a majority of all trial sites
were abroad. They also found that from 1995 to 2005, the number of clinical trial sites
overseas doubled, while the number in the U.S. and Western Europe decreased.

One obvious cause for this move is economic. The price per case for a clinical trial at a
top-rated medical center in India is about $2,000; in the U.S., it would cost 10-times as
much. In 2000, the average cost to develop one drug in the U.S. was $802 million, with

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most of the expense resulting from time costs. Countries with fewer regulations can move
trials along faster.

But with lower costs comes less stringent scientific and ethical standards, and the U.S.
regulatory system, chiefly the FDA, is already strained.

"This is outsourcing not only of jobs but of the way we test drugs to make sure they are
safe and effective," says Charles Cairns, M.D., chairman of emergency medicine at UNC
and a co-author of the study. "Across the globe there are different standards and no
uniform approach to conducting clinical trials."

Ethical concerns include the lack of trial oversight and review of study protocols, as well
as the monetary lure of participating in trials, especially in low-income countries. Also,
many of the drugs tested in developed countries are for conditions that are not primary
health problems there; allergies or overactive bladder instead of tuberculosis or malaria
which disproportionately affect these countries.

Genetics and cultural and social factors also influence how drugs are metabolized. For
instance, people of Asian decent have a genetic variance that decreases the efficacy of
drugs like nitroglycerin. Many people in developing countries are also "drug naive," and
have never taken medicine for depression or other chronic conditions. Their bodies would
react differently to a drug than someone in a country like the United States who takes
multiple medications and receives routine medical care.

"It is conceivable that use of the same drug in both populations would produce markedly
different results," Glickman says.

The problems overseas are often rooted in the U.S. Higher labor costs, time-consuming
bureaucracy and a lack of uniformity even in the U.S. regulatory system drives drug
makers to look for places that are more conducive to running trials in a cost-effective
manner, Cairns says.

The solution lies in a multi-faceted approach to increase cooperation with countries


overseas while improving the domestic environment and increasing accountability on the
part of industry, says Glickman.

"The U.S. Food and Drug Administration can be a leader globally in addressing these
issues," says Cairns. "The FDA could be a nexus of insurers, providers, industry, patients;
so that we could agree on minimal standards that can be transportable across countries."

"This could almost be considered a State Department issue. Energy and global warming
are security issues; this is a medical security issue that needs to be actively discussed."

"Clearly, there is some benefit for everyone involved in clinical trials overseas," says
Glickman. "But we need a robust research framework that will protect trial participants
and ensure that clinical research is conducted to the highest scientific standards."

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22. Frontage Deal Expands Service Offering in China

February 25, 2009

Expansion of Frontage’s collaboration with Beijing Second Pharmaceuticals will give it a


new 1,800 sq m R&D centre and further increase its presence in China.

The companies were already working together but this collaboration has now been
expanded in an attempt to accelerate Beijing Pharma's entrance into the international
generic drug market.

In return for providing bioanalytical, pre-clinical, clinical and drug development services
to Beijing Pharma Frontage will obtain the R&D centre and access to good
manufacturing practice (GMP) compliant manufacturing capacity.

This facility marks another milestone in Frontage’s expansion into China, which
commenced three years ago. Since then Frontage has entered into numerous
collaborations with Chinese pharmaceutical companies, including Beijing Pharma since
2007.

Under the original arrangement Frontage helped Beijing Pharma with the design,
renovation and commission of manufacturing facilities. This was done to ensure they
were compliant with US Food and Drug Administration and International Conference on
Harmonisation GMP requirements.

Song Li, president and CEO of Frontage, said: "This partnership demonstrates our
continued commitment to support the US, European and Chinese companies'
development programs in generic drugs, and to help them gain access to international
markets.

“We are pleased that the investments we have made in our business over the last year are
being recognized by our customers and partners."

Over the next three to five years Beijing Pharma is hoping the collaboration will develop
12 abbreviated new drug applications (ANDA). These will be marketed in China, Europe
and the US.

23. Novartis sets $627 M Revenue Goal for China in 2009

February 26, 2009

Swiss pharmaceutical giant Novartis International AG expects over RMB 4.29 billion
($627.46 million) in sales revenue from the Chinese market in 2009. In 2008 it made 3.3

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billion RMB ($428 million) in China, up 29% from 2007 which was 2.56 billion RMB
($376 million). Globally, the company is hoping for a 5% increase in its top line.
Novartis also said it plans to introduce six new drugs to China during 2009 and to
increase its employee count by 20%.

24. Immtech Signs MOU with Beijing Pharmaceutical Group

March 3, 2009

Immtech Pharmaceuticals signed a Memorandum of Understanding (MOU) declaring its


interest in developing a strategic alliance with Beijing Pharmaceutical Group Co. Ltd.
(BPGC). The MOU also confirms BPGC’s intention to consider a range of collaborative
opportunities with Immtech. The alliance would give BPGC rights to develop drugs from
Immtech’s library of compounds, which primarily target hepatitis C and malaria. No
financial disclosures were made at this early stage.

25. Sinovac Receives GMP Certification For Its New Filling And Packaging
Production Facility

March 5, 2009

Sinovac Biotech Ltd. (NYSE Alternext US: SVA), a leading provider of vaccines in
China, today announced that it has received the Good Manufacturing Practice (GMP)
certification for its recently opened filling and packaging production facility. The
certificate of compliance has a five-year term and was issued by the State Food and Drug
Administration (SFDA) following a site inspection.

The GMP certification provides for an overall annual production capacity of 20 million
doses, with the capability to produce up to 40 million doses through reasonable
scheduling of production activities. This production milestone ensures that Sinovac can
fully meet increasing market demand and potential production increases for currently
commercialized products, namely Healive, Bilive and Anflu. The filling and packaging
production plant also has the capabilities to fill and package Panflu, the Company's
pandemic influenza vaccine, in order to support China's prevention and control strategy
against a potential outbreak of pandemic influenza.

Further to existing commercialized products having obtained GMP certifications, the


filling and packaging plant successfully obtained the GMP certification, which further
recognizes Sinovac's implementation of high quality management of production process.

Mr. Weidong Yin, Chairman, President and CEO, commented, "The receipt of the GMP
certification and the operation of the state-of-the-art filling and packaging facility provide
the foundation for the further development of Sinovac. We are well positioned to increase
output to meet increasing market demand and ultimately achieve sales growth. More

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importantly, the expanded production capacity should enable Sinovac to supply greater
amount of vaccines, which is in line with our mission to eliminate human diseases."

26. Tigermed Aims Big with MacroStat Alliance

March 9, 2009

Tigermed is continuing with its plan of partnering to become the top Chinese CRO
through an alliance with MacroStat to improve its range of statistical services, further
broadening its business.

The alliance covers the running of clinical trials, data management and statistical analysis,
with Tigermed, a Chinese contract research organization (CRO), using MacroStat to
improve its services in these areas.

By enhancing its offering in these areas Tigermed believes it can improve drug
development in China, providing services that meet international standards while
streamlining clinical research and cutting R&D costs.

In return MacroStat will receive an “asset injection”, with this additional capital being
used to accelerate development of its biostatistic services and further penetration into the
clinical trial market.

Ye Xiaoping, CEO and founder of Tigermed, said: “The win-win cooperation between
leading CROs with complementary advantages is conducive to constructing a higher
level of CRO service chain and further updating full service capability, which also opens
a fast track to the globalization of China CROs.”

Under the terms of the deal, financial details of which have not been disclosed, three of
Tigermed’s executives will take seats on MacroStat’s board.

The deal forms part of Tigermed’s ambitious growth plans that target becoming the
biggest CRO in China within 3 years, with a cash injection from Qiming Venture
underpinning this “period of rapid expansion”.

Strategic collaborations have been identified by Tigermed as an important way of


achieving its growth targets, with last year’s deal with Russian and South Korean CROs
being used to spread into new markets.

27. China's Shanghai Ruijin Chooses the Mobetron for Advanced Cancer Care

March 12, 2009

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IntraOp Medical Corporation (OTCBB: IOPM), a provider of intraoperative electron-
beam radiation therapy (IOERT) solutions for the treatment and eradication of cancer,
announced today an order for its Mobetron device from the Shanghai Ruijin Hospital in
Shanghai, China.

IntraOp's Mobetron is a mobile technology that delivers IOERT to a tumor site during
cancer surgery. The Mobetron enables radiation and surgical oncologists to pinpoint the
optimal site for radiation and deliver an effective dose during the procedure. Since the
Mobetron is a mobile, self-shielded device, doctors will be able to move the Mobetron
among different operating rooms to more efficiently treat a greater number of patients.
Shanghai Ruijin will use the Mobetron to treat many forms of cancer, including breast,
colorectal, sarcoma, and lung cancers.

This marks the fourth Mobetron installed in China. In the six months since installing the
first Mobetron device and beginning treatments, oncologists in China have had notable
success using IOERT for cancer therapy, inspiring other centers to follow suit. Two
institutions in Beijing have been using the Mobetron since September of 2008 and have
extremely high utilization rates, reflecting the Chinese doctors' commitment and
enthusiasm for IOERT as an emerging standard-of-care for surgeries requiring tumor
resection.

Prof. King, director of the radiation Oncology Department, said, "The Mobetron will
augment the surgical and radiotherapy department for Ruijin. This will allow the
oncologists there to quickly and effectively treat a larger number of patients, while
reducing tumor recurrences and saving lives."

IntraOp CEO John Powers added, "We continue to be optimistic about the rapid adoption
of the Mobetron technology and IOERT in China. This is the fourth order we've received
in only 18 months. It is clear that IOERT is having an immediate impact on the delivery
of radiation therapy in China."

28. SGS opens new micro test lab in China

March 23, 2009

SGS Life Science Services opened a new microbiology testing laboratory in Shanghai,
China to offer cGMP compliant API testing services for method development and
validation.

The 700 square meter laboratory, which employs 27 full time analytical staff, will offer
local drug developers current good manufacturing (cGMP) practice standard
microbiology, stability and endotoxin assessment services for active pharmaceutical
ingredients (API), finished products and traditional Chinese medicines.

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The quality of APIs and drugs from China has become an increasing concern for patients
and importers worldwide following a series of high profile contamination problems that
emerged in recent year.

While standards in China are beginning to improve as a result of efforts by both the
Chinese Food and Drug Administration (SFDA) and other regulators, analytical testing
capacity has not grown at the same rate as the manufacturing sector, creating demand for
contract offerings like SGS’.

Ulrich Markens, vice president and regional manager of SGS’ Chinese operations,
explained that the firm had “received [an increasing number of] requests from several
multinational companies for microbiology testing in a fully cGMP-compliant
environment.”

Markens added that: “Integrating microbiological testing broadens our service


portfolio…in compliance with the increased scrutiny of pharmaceutical manufacturing in
China by the US Food and Drug Administration (FDA).”

The laboratory, which began offering contract analytical services in January 2006, is part
of SGS’ integrated network of 14 cGMP-compliant testing facilities worldwide that the
firm believes enhances the quality control operations of both its local and multinational
pharmaceutical industry clients.

SGS also said that the laboratory, which already holds a Chinese National Accreditation
Board for Laboratories’ ISO 17025 certification, further expands its range of offerings in
the country.

The firm offers consultancy in regulatory affairs and the registration of medical products
in both Hong Kong and China, third party facility inspection and auditing services and
advises producers of import and export requirements.

29. AstraZeneca and BioDuro Expand Discovery Contract

March 25, 2009

The Chinese unit of US contract drug discovery firm BioDuro says that AstraZeneca has
expand its relationship with the firm to include the optimization of discovery research
operations focused on drugs for respiratory and inflammatory disease.

Under the updated contract, financial terms of which were not made public, BioDuro will
provide integrated research services in the areas of chemistry, biology, ADME, and
DMPK to help enhance AstraZeneca’s discovery program and shorten timelines.

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Lena Martensson, AstraZeneca’s director of strategic planning and business development
explained that the new deal is based on the firm's previous success and excellent working
relationship with BioDuro.

Martensson said that: "After a successful collaboration involving discovery chemistry,


ADMET, and DMPK, AstraZeneca has expanded its collaboration with BioDuro to
leverage the strengths of its team to help develop new therapeutics."

This positive opinion was echoed by BioDuro CEO John Oyler who said that the firm "is
pleased to build upon this existing collaboration and work closely with the experienced
team at AstraZeneca to develop new clinical compounds.”

BioDuro has a team of 580 researches and technicians at its facility in the Chinese capital
Beijing. It currently has a roster of 40 pharma and biotech clients that it claims include 10
of the top 12 worldwide.

With Big Pharma increasingly cutting R&D budgets and in-house expertise being scaled-
back there is considerable scope for contract research organizations (CRO) to expand
their businesses.

BioDuro appears to have positioned itself well to take advantage of the burgeoning
contract research market, with Frost & Sullivan predicting Asian CROs will be doing
$2bn worth of business a year before 2010.

30. WuXi PharmaTech Announces Fourth-Quarter and Full-Year 2008 Results

March 25, 2009

Key highlights:

• Total full-year 2008 net revenues: $261.8 M (including $8.3 M of net revenues
from discontinued operations) and adjusted EBITDA: $72.2 M;

• 74% year-over-year net revenue growth from continuing operations in fourth


quarter of 2008, 33% organic net revenue growth for China-based businesses;

• 87% year-over-year net revenue growth from continuing operations for full-year
2008, 45% organic net revenue growth for China-based businesses;

• Fourth quarter and full year 2008 net losses reflect non-cash impairment charges
relating to continuing and discontinued AppTec operations;

• Construction completed at Suzhou toxicology laboratory and expanded Jinshan


manufacturing plant;

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• Company targets 2009 net revenues of $265-$275 million, including 15-20% net
revenue growth in China-based laboratory services;

• Key 2009 investments in laboratory services, toxicology, and manufacturing


services expected to drive revenue growth in 2010 and beyond;

• Fourth-quarter 2008 net revenues from continuing operations increased 74% to


$64.4 million compared to fourth-quarter 2007;

• AppTec contributed $15.1 million of net revenues in fourth-quarter 2008 and


$57.7 million in full-year 2008;

• Net revenues from Laboratory Services increased 99% to $57.4 million in fourth-
quarter 2008 and grew 100% to $205.0 million in full-year 2008, including
increases of 47% to $42.3 million and 44% to $147.3 million in China-based
Laboratory Services for fourth-quarter 2008 and full-year 2008, respectively;

• Net revenues from Manufacturing Services decreased 15% to $7.0 million in


fourth quarter 2008. Manufacturing Services net revenue increased 48% to $48.5
million for full-year 2008, driven by continued expansion of the breadth and
depth of our customers and revenue from a single large project in the first half of
2008.

• GAAP gross profit grew 27% to $20.3 million in fourth-quarter 2008 and 53% to
$96.3 million for full-year 2008, driven by strong net revenue growth, continued
healthy gross margins for our China-based Laboratory Services business.

• GAAP gross margin was 31% and 38% for fourth-quarter and full-year 2008,
respectively, versus 43% and 46% for fourth-quarter and full-year 2007,
respectively.

31. SAFC launches service to secure supply chain

March 30, 2009

SAFC has launched its Vendor Audit Services that are designed to increase clients’
confidence in the supply chain by providing traceability and quality confirmation of raw
materials.

The service has been set up to assist companies maintain standards when operating within
a complex global supply chain, the dangers of which have become increasingly apparent
in recent years.
SAFC will operate the service as an extension of its in-house auditing, giving clients
access to staff with compliance and regulatory experience that operate in locales around
the globe.

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Gilles Cottier, President of SAFC, said: "SAFC understands that ensuring the proper
quality for raw materials that feed customer pipelines is vital to their success, and quality
assurance has always been a top priority for SAFC-sourced raw materials.

"This program leverages the high level of trust our customers have in SAFC's regulatory
expertise and pioneers a much needed regulatory compliance service that can benefit our
customers by providing them with an efficient and effective method to help them ensure
that quality requirements are met for materials internationally sourced."

SAFC believes that clients using the service will be able to perform more audits across a
bigger geographic area and also achieve cost savings as a result of not having to expand
their regulatory compliance team.

Further savings can be realized by companies that are willing to allow SAFC to reuse
their audit information for other customers.

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