--Companies looking to profit from world’s fastest growing drug market looking to China for takeover targets--

 China offers the world’s fastest growing drug market and is able to conduct animal research at a relatively low cost. WuXi, China’s biggest medical contract researcher, is generating profit margins that surpass its U.S. rivals by almost 5 times, according to Bloomberg data. ShangPharma is another Shanghai based Chinese company offering research including animal testing and trading at 7.9 times estimated 2012 profit which is half the average for its U.S. rivals, according to the data.

 China’s pharmaceutical market is projected to grow to $115 billion by 2015. This projection is likely to cause a surge in the takeover offers for WuXi and ShangPharma from global rivals including Quintiles Transnational Corp. (QTRN) and Pharmaceutical Product Development Inc. (PPDI), Oppenheimer & Co. and CLSA.

 Analysts are predicting WuXi will post record sales for four more years, which justifies a bid 60% higher than its current price, according to William Blair & Co.

 “We see a big gap between WuXi and ShangPharma valuations versus their U.S. peers,” said Ingrid Yin, New York-based China health-care analyst with Oppenheimer. “WuXi (WX) and ShangPharma are both very interesting potential targets. They represent a big opportunity in China.”