Universe Pharmaceuticals Inc. (NASDAQ:UPC) shares rose sharply early Tuesday after declining 4% on Monday. Universe Pharmaceuticals, last month, entered into Letter of Intent (LOI) for strategic cooperation with Kitanihon Pharmaceutical.
The LOI was originally entered into in April.
Pursuant to the LOI, both parties agree to jointly establish a flagship store on global.jd.com, a popular e-commerce platform in China offering overseas products. The Company agrees to operate the flagship store as an exclusive distributor to sell KP’s products.
The Company will distribute KP's products across the Chinese and Southeast Asian markets through international e-commerce channels, to create growth opportunities for both parties. In addition, both parties agree to jointly establish a medical product research and development center to be named Universe Hanhe Medical Research Institute Co., Ltd.
The Center will receive favorable policy treatment from the Chinese government. The Company will utilize its R&D capacity and medicinal resources, and KP agrees to employ its quality control standards and advanced technologies into the development of medical products.
As part of the LOI, upon achieving specific strategic goals, both parties will agree to jointly build a new manufacturing facility in accordance with the market access requirements from Japan’s Pharmaceutical and Medical Devices Agency (PMDA). Both parties will work together to ensure the Facility will be recognized as qualified foreign manufacturer of pharmaceutical products and make it a PMDA certified Chinese medicine brand.
UPC shares popped 29 cents, or 10%, to $3.22.
