China’s blood shortages pump new life into $16 billion drugmaker

Shanghai RAAS Blood Products Co., a seller of treatments made from human blood plasma, rallied to new highs at a time when many of the country’s blue-chip firms were sinking.

China’s surging demand for plasma therapies, medicines made from blood components that are used during surgeries or for disorders like hemophilia, a condition in which blood doesn’t clot normally.

China tightened control over blood supplies after scandals in the 1990s when AIDS spread in central Henan province from farmers selling their blood to unregulated collection outfits.

Fewer than 30 companies in China have licenses to make blood-based therapies, and as the products are derived from the blood of healthy people there is a constant race to get control of new plasma collection stations.

In earlier years, in the country’s poorer regions, meager fees were enough of an incentive to attract blood plasma donors, but fewer are likely to do so as incomes rise, said Shi Lichen, manager at Beijing Dingchen Medical Consultancy, an advisory firm.

Chen, the plasma company’s chairman, says its valuations are backed by a highly lucrative business, and its main shareholders have been increasing their stake in the company.