Chinese pharmaceutical company Shanxi Taxus Pharmaceutical Inc will reportedly be acquiring a California-based therapeutics firm for $5 million in cash, Taxus Pharmaceutical said on Wednesday without disclosing the company's name.

The merger, which will be finalized later in California this month, will make Taxus Pharmaceutical the majority stakeholder in the firm. Though the percentage has yet to be finalized, it will range between 80 and 90 percent, according to Taxus Pharmaceutical president Zhang Jiayue.

Taxus Pharmaceutical, based in Shanxi province, grows produces and develops paclitaxel, an extract from the taxus tree - also known as the Chinese yew tree - which the company is named after. Founded in 2000, Taxus Pharmaceutical grows yew trees and isolates paclitaxel, which is a chemical used in the treatment of ovarian and breast cancers.

The firm in question reportedly is a regenerative medical company that focuses on tissue repair medications. The company also recently acquired a health supplement brand.

Zhang said in a media briefing that the goal of his acquisition was to "increase the company's speed of expansion into the US pharmaceutical market."

He said that products are of particular interest to Taxus Pharmaceutical, specifically the ones for diabetes patients.

"I feel that the future prospects of these two products are looking very positive," Zhang said. "That's why I'm acquiring this corporation, so that we can try to push the products into the market even quicker, and I also want to build up a platform on which to sell Chinese products in the US."

On why now is a good time for Taxus Pharmaceutical, a privately-owned company, to grow in the US, Zhang said that having been in the pharmaceutical industry for decades, he always had a desire to expand overseas. "Plus, the science and technology of the US pharmaceutical industry is the best," he said.

Zhang said that Taxus Pharmaceutical has plans to list in the US within the next six months, with final details being prepared now.

Taxus Pharmaceutical's acquisition comes as more Chinese pharmaceutical companies are eyeing expansion in the US. In 2012, Nanjing-based Simcere Pharmaceutical Group signed a joint venture with Merck & Co Inc, combining the resources of the two companies to brand pharmaceutical products for cardiovascular and metabolic disesases.

In a high-profile acquisition in 2010, Jiangsu-based pharmaceutical maker Aland Nutraceutical Group acquired New Jersey-based International Vitamin Corp (IVC) for $63.4 million in cash and closing costs. Since the acquisition, IVC has seen sales and employment improve, jumping to No 2 from No 5 in the US private-label vitamin industry, according to IVC CEO Steven Dai.

amyhe@chinadailyusa.com

(China Daily USA 02/27/2014 page1)