Bio-One hopes to acquire a 51% interest in the company - an integrated business including research and development, manufacturing, sales and marketing - which reported revenues of $10 million in 2003 and has an operating profit of $2.7 million.
This move forms part of Bio-One's desire to establish a real presence in China; a process it began in April when it took majority control of WeiFang Shengtai Pharmaceuticals, a Shandong Province-based manufacturer and distributor of glucose that reported $16.3 million in sales in 2003 and a net income of $2.3 million.
Bio-One has formerly agreed two other majority stakes in Chinese herbal medicine companies. In March the organisation signed an agreement to acquire a 51 per cent interest in a company which reported sales of $20 million in 2003 and in May it agreed a 51 per cent interest in a Hebei Province-based firm, which reported sales of $9 million last year.
Bio-One president and CEO Armand Dauplaise said of the latest accord: "This will be our fourth step in establishing a presence in China. We are aggressively pursuing additional synergistic candidates in China and North America that meet our criteria for profitability and revenue growth."
Bio-One's current subsidiaries include PNLabs, American Nutritional Exchange, Interactive Nutrition International, Nutrition Sciences and WeiFang Shengtai Pharmaceuticals.
"There has been much interest in China for a long time and we are one of the lucky few companies that has been able to close a deal with a pharmaceutical company," said a spokesperson for Bio-One. "We hope to finalise details with the herbal medicine company in the third quarter of this financial year and then increase our revenue stream to enable us to spin-off Bio-One China."
Bio-One hopes this will be followed by an expansion of its distribution channel to market products to traditional drugstores, hospitals and wholesale distributors throughout China.