Week In Review: China Resource Plans $1 Billion Hong Kong IPO

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Includes: HCM, INCY, SHTDF
by: ChinaBio Today

Deals and Financings

China Resources Pharmaceutical Group, China's second-largest pharma and a subsidiary of state-owned China Resources (Holdings), is planning an IPO in Hong Kong that will raise at least $1 billion, according to media reports. At least two of CR Pharma's subsidiaries are already listed on China's exchanges. The offering is still in the early stages of planning, as the company has asked investment bankers to submit proposals by February 16, so details of the transaction are not yet available.

Hutchison China MediTech (Chi-Med) (NASDAQ:HCM) filed a third iteration of a prospectus for its $100 million IPO in the US, which still doesn't include final pricing. Strictly speaking, the offering is an IPO of new ADS shares. These will be some multiple - not yet disclosed - of the company's London-traded ordinary shares that are currently worth about $30.23 each. The new prospectus includes 9-month financial data for 2015, showing that Chi-Med was on track for a very good year. The price of the company's London shares more than quadrupled in the two years of 2014-2015 and nearly doubled last year. 2016 hasn't been so generous, with the company's stock price sliding 25% in just six weeks.

Pharmaron, a Beijing CRO/CMO, acquired Quotient Bioresearch of the UK. Quotient focuses on integrating radiochemistry and metabolism, an expertise derived from its purchase of GE Amersham's radiosynthesis business in 2009. Pharmaron said the transaction, besides adding the radiochemistry technology, would broaden its footprint, increasing market access in Asia, Europe and the US. The price was not disclosed.

Xizang Haisco Pharma (SHZ: 002653) led a $15 million Series D funding for Regentis Biomaterials, an Israeli medical device company. As part of its investment, Haisco will own China rights to Regentis' lead product, GelrinC®, a proprietary hydrogel. Implanted as a liquid, GelrinC is cured in-situ via ultraviolet light to form a resorbable implant. Over time, the gel is gradually replaced by newly regenerated cartilage. Regentis plans to use the new capital to conduct US clinical trials of GenrinC.

Trials and Approvals

Shanghai Golden Grand-Medical Instruments, a unit of Sinopharm (OTCPK:SHTDF), will begin a China trial of a minimally invasive device developed by Medigus of Israel to treat GERD (gastroesophageal reflux disease). The MUSE system includes a very small Medigus camera and an ultrasonic surgical endostapler that staples the upper part of the stomach to the lower esophageal sphincter in a fundoplication procedure. The MUSE system is already approved for use in the US and in Europe.

Company Spotlight

In September 2015, Jiangsu Hengrui Medicine made history by out-licensing global rights (not including China) to its PD-1 cancer immunotherapy. Incyte (NASDAQ:INCY), a US oncology pharma, acquired the rights in a deal worth up to $795 million if Hengrui collects all the milestones - the largest amount ever paid for a single China pharma asset. The deal underscores the tremendous progress the China biopharma industry, and Hengrui in particular, has made in transforming into a global developer of novel drugs. Lianshan Zhang, PhD, president of Global R&D at Hengrui and a bona fide sea turtle or hai gui, told ChinaBio® Today in an exclusive interview that Incyte is a very good fit for Hengrui's PD-1 molecule.

Disclosure: None.

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