Week In Review: ZAI Laboratory Lands $30 Million In Initial Funding

Includes: CBPO, LLIT, SCLN, WX
by: ChinaBio Today

Deals and Financings

ZAI Laboratory, Inc., an innovative drug startup based in Shanghai, raised more than $30 million from an international group of healthcare investors including Qiming, KPCB and Sequoia. ZAI's founder and CEO is Dr. Samantha Du, previously founder and CEO of Hutchison MediPharma, who led healthcare investments at Sequoia Capital in China prior to launching ZAI Lab earlier this year. Dr. Du told ChinaBio® Today that ZAI, which roughly translates to "one more time," will adopt a semi-virtual business model to develop a pipeline of five or six drug candidates with the intent of repeating the management team's past success in China.

FortuneRock(China), a Beijing developer of novel protein drugs, closed a $24 million funding from China investors. The company will use $19.5 million of the capital to build a GMP production facility in Tianjin, which it will spin off into a new company. The remainder is allocated toward pre-IPO and other general corporate expenses. FortuneRock(China) uses two proprietary platforms to generate novel molecules: one produces timed-release recombinant protein molecules and the other is a high-efficacy yeast expression system.

Luye Pharma (HK: 2186) of China will pay $599 million to acquire a 58% stake in Beijing Jialin Pharmaceutical Co., a company that makes drug products for cardiovascular diseases and cancer. In 2013, Jialin produced $185 million of revenue. Last month, Luye staged a $764 million IPO in Hong Kong, and the shares have risen 41% since the IPO. According to Luye, the deal will add to its portfolio of cardiovascular drugs and broaden its sales network.

Hony Capital sold $528 million of its shares in CSPC Pharmaceutical (HK: 1093), lowering its stake in the company from 62% to 51%. Just three months ago, Hony raised $570 million through a similar sale of CSPC shares for a total exit of $1.1 billion so far this year. In 2007, Hony bought CSPC, then known as China Pharmaceutical Group, from the municipal government of Shijiazhuang for $114.5 million.

China Biologic Products (NASDAQ:CBPO), a plasma-based biopharma, will pay $87.1 million to purchase an additional 20% stake in Guizhou Taibang Biological Products. The acquisition raises China Biologic's holding in Guizhou Taibang from 56% to 76%. In March, Guizhou Taibang completed the GMP certification of its new facility, making the company compliant with China's more stringent plasma production standards.

The venture capital arm of WuXi PharmaTech (NYSE:WX) participated in the $24 million Series B funding of Aldea Pharmaceuticals, a California company that is developing innovative drugs to treat aldehyde metabolism disorders. The funding will underwrite a Phase II proof-of-concept trial of Aldea's lead drug candidate, AD-6626, a treatment for acute alcohol intoxication.

Amerigen, a generic drugmaker with a US/China focus, and China's Ningbo Menovo Pharma will collaborate to develop generic drugs for the US market. Menovo will manufacture the APIs and finished products, while Amerigen will obtain US regulatory approval and commercialize the drugs. In addition, Amerigen will help Menovo gain FDA approval of its finished dose manufacturing facility in Daxie, China. Further details of the collaboration were not disclosed.

Government and Regulatory

In a bid to increase private funding for hospitals, China's Ministry of Commerce announced foreign companies will be allowed to own 100% of China hospitals. Previously, the limit was 70%. Although China has recently encouraged privatized investment in healthcare institutions, the government's goals for private funding were not being met, prompting the MOFCOM to liberalize its restrictions over foreign ownership.

Trials and Approvals

SciClone Pharma (NASDAQ:SCLN), a California company that in-licenses drug products for the China market, received CFDA approval for DC Bead®, a minimally invasive treatment for liver cancer made by BTG plc (LSE: BTG) of the UK. SciClone has exclusive China distribution rights to DC Bead, which it will purchase from BTG at an agreed-upon price. SciClone's current major product is Zadaxin®, a treatment for the liver diseases hepatitis B and C.

Company News

Shanghai Fosun Pharma's (SHA: 600196; HK: 02196) diagnostics subsidiary announced the China launch of the MyCare assay tests, which were developed by Saladax Biomedical of the US. The MyCare assays determine optimal chemotherapy dosing based on an individual patient's absorption and clearance rates. In March 2013, Fosun bought $22.4 million of Saladax's D shares, a deal that included China rights to the MyCare assays and gave Fosun majority ownership of Saladax.

Dehaier Medical Systems (DHRM) of Beijing is planning the China launch of its Sleep Respiratory Solutions, a diagnosis tool for obstructive sleep apnea. Dehaier assembles the product from China-approved third-party components. Patients wear a watch-sized monitoring device, allowing at-home diagnosis of sleep disorders. Dehaier is a China medical device company that makes its own products and distributes devices for foreign device makers.

Disclosure: none.

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