MEDIPOST announced that it will establish a joint venture company with a local biotech company in China to make presence in Chinese market for stem cell drugs. MEDIPOST agreed to set up the JV with JingYuan Bio based in Tai’an Shandong and will invest total U$7M in 50/50 equity structure with the partner.

The name of JV will be ‘OrLife Bio’. Mr. Hwang Dong Jin and Dr. Jang Young Lee will be appointed to the board of directors from MEDIPOST.

The JV will have an exclusive license for the development and sales of CARTISTEM^® in China and be responsible for the manufacturing and registration of the product. CARTISTEM^® is the first allogeneic stem cell drug in the world derived from mesenchymal stem cells of umbilical cord blood.

The product was approved by MFDS in Korea in 2012 for the treatment of osteoarthritis and treated about 1,700 patients so far. Dr. Jang Young Lee, a senior director of MEDIPOST who is in charge of business development, commented that there were many partner candidates in China committed to the collaboration on CARTISTEM^® and we decided to go with Jing Yuan based on their expertise and infrastructure of the stem cell area.

There is no clear regulatory guideline in China for stem cell drug, but CFDA announced the guideline for clinical trial.

The JV plans to initiate clinical trial of CARTISTEM^® in China in 2016 following about one year preparation period. Following product registration in China, the JV will market CARTISTEM^® focusing on orthopedists in China and plans to replace 5-10% of microfracture and total knee replacement by 2024.

JingYuan Bio was founded in 2012 and based in National High Tech area in Tai’an. They are strong at stem cell and autologous immune cell research and development. MEDIPOST will be entitled for 50% of the JV’s profit based on its equity holdings and in addition will receive license fee and royalty from the JV.

Before the product registration in China by the JV, MEDPOST will attract patients in China to Hong Kong where CARTISTEM^® treatment is available at the moment. The pharmaceutical market in China will grow to 10 fold in size compared with that of Korea by 2016. The number of arthroscopic treatment and total knee replacement in China is estimated about 200,000 as of now.