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Simcere Pharmaceutical Group recently announced that it has entered into a strategic agreement with Bristol-Myers Squibb Company (BMY - Analyst Report).

The agreement further expands Simcere’s association with Bristol-Myers Squibb which goes back to 2010.

As per the agreement, both companies will collaborate on the development and commercialization of the subcutaneous (SC) formulation of Bristol-Myers Squibb’s rheumatoid arthritis drug, Orencia.

Simcere will primarily focus on the development and regulatory activities which are mandatory to obtain market approval for Orencia SC in China. Both companies will share profits and losses related to Orencia SC in China.

Other financial terms of the agreement were not disclosed.

We remind investors that Simcere formed a strategic partnership with Bristol-Myers Squibb in Nov 2010 to co-develop candidate BMS-817378 in China while the latter retained rights of all other markets across the world.

Moreover, Simcere expanded its drug development partnership with Bristol-Myers Squibb in Dec 2011 to focus on the co-development of the latter’s cardiovascular disease candidate, BMS-795311.

Simcere already has drugs like Yingtaiqing and Iremod in its rheumatoid arthritis franchise. The addition of Orencia will further strengthen Simcere’s portfolio and should boost long-term growth.

We note that Orencia is approved for the treatment of rheumatoid arthritis in the US, Europe and Japan.  Orencia’s SC formulation was launched in the European markets in 2012.

We are encouraged by Simcere’s association with Bristol-Myers Squibb.

Simcere currently carries a Zacks Rank #3 (Hold). Right now, Actavis Inc. (ACT - Analyst Report) and Mylan Inc. (MYL - Analyst Report) look attractive with a Zacks Rank #2 (Buy).

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