Venturepharm Laboratories Ltd. (VPL), a Beijing-based pharmaceutical service provider, announced on Monday it had purchased 39 percent of shares of the U.S. medicine group Commonwealth Biotechnologies, Inl. (CBI).

The company said in a statement it became CBI's biggest stockholder with the purchase of 2.15 million shares, the first Chinese enterprise that had bought into a Nasdaq-listed drug firm.

The Hong Kong-listed VPL had the right to expand the share holding, said the statement. The value of the purchase was not disclosed.

The two companies would jointly set up a research center in China, according to the statement.

A leading new drug researcher in China, the VPL would target the global market in future, said VPL chairman Bill Guo.

The new joint venture would make full use of China's low-cost business environment and move the research and development (R&D) center to the country, which could reduce the CBI's R&D costs by 70 percent, said Guo.

The CBI would take China's growing importance in new drug research as an opportunity and provide high-quality services at competitive prices, said the CBI's chief executive officer Paul D'Sylva.

The global pharmaceutical outsourcing market reached 34 billion U.S. dollars in 2005, said D'Sylva. The market for drug discovery outsourcing was 5.38 billion U.S. dollars in 2005 and would grow at 20 percent each year to 7.2 billion in 2009, as Kalorama Information estimated.

The CBI reported estimated sales of 16.44 million U.S. dollars in 2006, an increase of 111 percent over 2005, according to the company website. Revenues of the VPL have seen a compound annual growth rate of 133 percent since 2000.

(Xinhua News Agency April 8, 2008)