Deals and Financings
Jiangsu Aosaikang Pharma (SHE: 300361) delayed its IPO late in the process -- the price was already set. The transaction was scheduled to raise 4 billion RMB ($669 million), which would have made it the largest IPO ever for the ChiNext exchange. According to the company, it postponed the IPO because the offering was "relatively large," though regulators may have forced the move. The transaction was priced at 67 times trailing earnings, against a ChiNext average of 55.
Changchun High & New Technology Industries (Group) paid $4.8 million for a 25% interest in Dutch biopharma Mucosis BV. Mucosis is a clinical-stage biotech developing vaccines that can be administered needle-free via the nose or mouth through the mucosal membranes. Changchun is involved in a diverse range of industries, including real estate. Its life science products include generic drugs and biologics as well as TCM preparations.
Wuhan Kindstar Clinical Diagnostics, China's largest provider of esoteric diagnostic testing services, in-licensed a lung cancer test from Germany's Epigenomics (OTCQX:EPGNY) (see story). Epi proLung® is a tissue assay that has been approved for use in Europe. Epigenomics will supply the product to Kindstar and also provide support for approval.
Thermo Fisher (NYSE: TMO) received an OK from China's Ministry of Commerce for its $13.6 billion acquisition of Life Technologies (NSDQ: LIFE), moving the transaction one step closer to closing (see story). China did impose some conditions on the approval: Thermo Fisher must dispose of its 51% share in a China JV, a vaccine company known as Lanzhou National Hyclone Bio-engineering; it must sell its cell culture and gene adjustment units; and Thermo Fisher was asked to lower the prices on two products in China.
TaiGen Biotechnology of Taiwan and Beijing out-licensed Russian rights for its novel antibiotic to R-Pharm, a major drug company in Russia. The antibiotic - nemonoxacin - treats bacterial infections including those caused by drug-resistant bacteria. TaiGen will receive an upfront payment, milestones and royalties on sales. R-Pharm will be responsible for registration and commercialization of nemonoxacin in Russia, former Soviet countries and Turkey.
Government and Regulatory
The China Securities Regulatory Commission (CSRC) issued additional regulations for conducting IPOs under its new "market-oriented" system. In general, the rules are aimed at protecting investors by insuring that underwriters provide full disclosure of the IPO company's situation - without discussing information that is not included in the officially reviewed prospectus. Specifically, the additional rules stress the importance of price-earnings ratios: if an IPO's PE ratio is higher than its already-listed peers, underwriters are required to warn investors.
Actavis (NYSE: ACT), one of the world's largest generic drugmakers, is pulling out of China because it considers the business environment too difficult and the profits too small (see story). Its CEO, Paul Bisaro, said Actavis can allocate its capital more efficiently in other markets. The company has already sold one of its China ventures and is seeking to sell its other one.
GlaxoSmithKline (NYSE: GSK) said its China revenues turned higher in the fourth quarter of 2013, after sales dropped a disastrous 61% in Q3 (see story). Specific numbers were not disclosed. The story of GSK's bribery scandal broke right at the beginning of Q3, and company officials had said earlier its sales were beginning to improve in September, at the end of the quarter. Back then, the small bit of good news seemed hopelessly optimistic; it may have been accurate.
Trials and Approvals
US-based Neuralstem (NYSE: CUR) treated its first patient in a China stem cell trial that is testing NSI-566 as a treatment for motor deficits following a stroke (see story). The Phase I/II trial is being conducted at BaYi Brain Hospital in Beijing. In the trial, Neuralstem's spinal-cord derived stem cells are being transplanted directly into the patient's brain near the stroke lesion. Neuralstem hopes the one-time treatment will rebuild the damaged neural circuitry.
EntreMed (NSDQ: ENMD), a US-China pharma, filed a new drug clinical trial application for a China Phase II trial of ENMD-2076 in advanced ovarian clear cell carcinoma (OCCC) (see story). The application will turn the on-going US Phase II trial into a global trial. OCCC will be the third indication for which ENMD-2076 is being tested in a US-China clinical trial, joining triple-negative breast cancer and advanced/metastatic soft tissue sarcoma. The company said its global trial will reduce approval time in China by three years.