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First its offices, then its websites—what will Sinobioway seize next in the Sinovac saga?

May 1, 2018
Life sciences

Something is afoot at Sinovac Biotech. The Chinese vaccine maker announced Monday that it had taken its websites offline after Aihua Pan, the chairman of its Sinovac Beijing subsidiary, “inappropriately and without authorization seized control” of them.

“Out of an abundance of caution, the company has temporarily blocked the access to the websites to avoid any further unauthorized access or tampering that could mislead any interested stakeholders,” Sinovac said in a statement. But that’s not all—it’s just the latest attempt on Pan’s part to “interfere with Sinovac’s business,” the company said. In mid-April, Pan, who is also the chairman of Sinobioway Biomedicine, the minority shareholder of Sinovac Beijing, stormed Sinovac’s offices alongside “dozens of unnamed individuals.”

They “limited the physical movement of the employees in Sinovac Beijing’s general manager’s office and finance department,” in an attempt to “take control of Sinovac Beijing’s official seal, legal documents, accounting seal, financial documents and financial information systems,” Sinovac said.

One of the buildings has been occupied by the “unnamed individuals” since April 17. They’re not letting Sinovac workers enter, which has derailed preparations for a China FDA inspection of the facility and forced the company to destroy bacterial seeds for use in the manufacturing of its 23-valent pneumococcal polysaccharide vaccine.

“With Sinovac Beijing employees unable to enter the facilities and perform these quality checks, the company has no assurances as to the quality of bacterial seeds and other key materials stored in this building for use in the production of the 23-valent PPV. As a result, Sinovac Beijing has been left with no choice but to plan to destroy the bacterial seeds,” the company said in a second statement issued on Monday. The approval of the vaccine will be delayed.

The pneumococcal vaccine wasn’t the only product affected—in addition to “physically preventing Sinovac Beijing employees from working production lines,” Pan and the “unnamed individuals” cut power to Sinovac Beijing sites “on multiple occasions,” Sinovac said on April 23. While production was “seriously disrupted,” Sinovac got its hepatitis A vaccine and seasonal flu vaccine back on track relatively swiftly.

Pan and Sinovac go way back—he played a key role in its revival in the early 1990s, when Sinobioway salvaged the failing biologics company. And he didn’t stop there.

In 2016, Sinovac, the only Nasdaq-listed Chinese vaccine maker, announced a buyout proposal to go private. CEO Weidong Yin, together with investment firm SAIF Partners and others, initially offered to expand their collective 30% stake in the company and take it private with $6.18 per share. By June 2017, a $401.8 million deal between the biotech and its chairman and Yin looked to be all squared away. And who turned up but Pan and Sinobioway with a competing offer, and a higher one at that.

A buyer consortium led by Sinobioway announced that it had submitted a new proposal to Sinovac’s board, offering to raise the privatization to $8 per share. It also accused a special committee appointed by the board of colluding with Yin’s consortium and not giving them the opportunity to raise the price.

“The members of Special Committee have become tools to help [Yin’s consortium] erode the interests of minority shareholders,” Sinobioway said in a statement. The take-private deal was slated to close by the end of 2017, but has been delayed by a Sinobioway that “vows to win this transaction.”

Sinovac did not respond to a request for comment by press time.

By Amirah Al Idrus

Source: Fierce Biotech

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