The normal route that most pharmaceutical companies take in gaining regulatory approval to market their products is to start off trying to gain approval in the United States or the European Union and then moving on to smaller markets like Japan and the European countries outside the E.U. California drug developer SciClone Pharmaceuticals
Shares of SciClone were up 18% yesterday on news that it was filing for approval of one of its cancer-fighting products in China. The product, named DC Bead, is designed to deliver localized doses of a chemotherapy drug to patients with liver cancer and was in-licensed from a U.K. company earlier this year.
SciClone is interesting in that it will derive nearly all of its expected $32 million in revenues this year from China on sales of an already approved treatment, Zadaxin, for hepatitis B. SciClone also hopes to bring more products to China and to acquire or in-license another new product in China next year.
How big of a market will there be DC Bead? Trying to predict drug sales in China is incredibly difficult because of a paucity of information regarding the country's medical practices and other important data, but sales in the E.U. for DC Bead have been anemic thus far, with sales under $3 million since its launch this year. SciClone does have over 100 sales representatives to help detail it, but if the product can only bring in a couple of millions of dollars in the E.U., it's doubtful that sales in China will be much higher.
SciClone expects to hear back from the Chinese regulatory authorities within 90 days about any possible approval for DC Bead. Even if the product brings in such a small amount of sales, it shouldn't be too much of a burden on SciClone and its sales force since they're already marketing Zadaxin for a related indication.
With the announcement today of its filing for marketing approval of its second product in China, SciClone is trying to make a presence for itself in this market. This isn't such a bad idea, considering that drug sales in China grew 20% last year to over $9 billion and that the market for pharmaceuticals there is much less mature than in most places throughout the world.
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Fool contributor Brian Lawler does not own shares of any company mentioned in this article.
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