Shares of CASI Pharmaceuticals Inc. (CASI 7.50%), a U.S.-based biopharmaceutical company that intends to sell U.S. FDA-approved drugs in China, soared 44% during mid-day trading on Tuesday. The stock has settled down somewhat to a 23.7% gain as of 3:43 p.m. EDT. Investors are cheering for a deal that will be good news for millions of Chinese patients infected with the hepatitis B virus.
Branded Viread generated $1 billion per year for Gilead Sciences (GILD -0.34%) before losing ground to generic competition. An FDA-approved generic might not enjoy the same profit margins as Gilead's branded drug, but there are a lot of potential patients in China.
There are between 850,000 and 2.2 million people infected with the hepatitis B virus (HBV) in the U.S., but CASI thinks there are a whopping 90 million HBV patients in China. It's still hard to say how well the company's plans to commercialize U.S. FDA-approved drugs in China will work out, but this is probably a step in the right direction.
CASI Pharmaceuticals is also preparing for the commercial launch of Evomela in China, a blood cancer treatment under priority review at the China Food and Drug Administration. Evomela is just one of three U.S. FDA-approved cancer treatments CASI has licensed from Spectrum Pharmaceuticals (SPPI) to market in China.
Although Evomela hasn't really gained traction in the U.S., CASI doesn't need to generate huge sales to produce returns for investors. Despite today's run-up, the company still sports a relatively small market cap of just $307 million at recent prices.