Week In Review: Origin-Centrillion Offers $1.5 Billion For Affymetrix

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Includes: AFFX, AVEO, TMO, TSRO
by: ChinaBio Today

Deals and Financings

Origin Technologies, a US company with deep China connections, has raised its bid to acquire Affymetrix (NASDAQ:AFFX), a US microarray company, to $17 per share. Affymetrix responded by postponing a shareholder vote, scheduled for Thursday, on a $14 per share takeover offer from scientific instruments company Thermo Fisher Scientific (NYSE:TMO). Origin is a shell that is tied to Centrillion Technologies, a California genomics company with manufacturing in China and Taiwan. Origin's management includes Wei Zhou, who is also president and CEO of Centrillion and was formerly a VP at Affymetrix.

Sequoia Capital China is hoping to raise another $1.45 billion in two investment funds, which are supposed to close in early April. The company expects to bring in $500-$550 million for Sequoia China Venture Fund VI LP and $850-$900 million for Sequoia China Growth Fund IV LP, according to Bloomberg. The funds will support China technology companies in many fields, including life science. If Sequoia meets its targets, the two funds would constitute Sequoia's largest China fundraising so far. It has been active in China since 2005.

Tesaro Inc. (NASDAQ:TSRO), a Boston area oncology biotech, closed a $155 million private placement with participation from Ally Bridge Group, a China healthcare investment firm. Tesaro is developing immuno-oncological drugs based on technology in-licensed from AnaptysBio. Ally Bridge, which has invested in more than a dozen oncology companies based in the US, Europe and China, positioned the Tesaro investment as "an important partnership between ABG," and US-based Tesaro.

Venus Medtech, a Hangzhou-based cardiovascular device company, raised $37 million from Goldman Sachs. Venus specializes in artificial cardiac valves along with stents and other CV products. Usually, Goldman Sachs makes investments in a company prior to an IPO, so apparently Venus is planning a public offering. Venus also announced it established a heart valve research center in partnership with the Second Affiliated Hospital of Zhejiang University School of Medicine.

Shanghai Pharmaceuticals raised another $21 million for its online pharmaceutical distribution company, which was established one year ago. The money, considered an A+ round, came from Softbank China Venture Capital and a fund controlled by Shanghai Charity Foundation. Shanghai Pharma is a large integrated pharmaceutical company that is also one of China three major drug distributors, with a large retail drugstore chain, Huashi Pharmacy. To date, Shanghai Pharma has raised $207 million for its online venture.

Shenzhen Hepalink Pharma has deepened its relationship with Canada's Quest PharmaTech (TSX-V: QPT). The two companies will form a $9 million China JV to fund R&D of Quest's cancer immunotherapies in China. Hepalink will invest $5 million for a 54% stake in the JV. OncoQuest, the oncology subsidiary of Quest, will contribute China rights to its immunotherapy technologies along with $1 million in cash for the remaining 46%. The partners put a value of $9.26 million on the JV. In 2015, Hepalink paid $13 million for a 42% stake in OncoQuest.

Lilly Asia Ventures has made an investment of undisclosed size in Millin Enterprises, a Beijing company specializing in medical devices and treatment for kidney disease. The funding was an A round for Millin, which claims to supply about 50% of the medical devices and supplies used in Beijing's 130 hemodialysis centers. The company also operates the Heilongjiang Sidley hospital that is dedicated to treating kidney disease. The hospital, which has 150 dialysis machines, opened in January 2015.

CANbridge Life Sciences, a Beijing distributor of western drugs to China, Taiwan and Korea, in-licensed global rights (ex-North America) to a clinical-stage cancer drug from AVEO Oncology (NSDQ: AVEO) of Massachusetts. It is the first time CANbridge owns rights to a drug outside of its North Asia operating base. Initially, CANbridge will develop AV-203, an ErbB3 (HER3) inhibitory antibody, for esophageal squamous cell cancer (ESCC), the most prevalent form of esophageal cancer. CANbridge will pay $1 million upfront and up to $133 million in reimbursement and milestone payments.

Company News

Zai Lab of Shanghai and Boehringer Ingelheim signed a strategic cooperation agreement under which BI will provide process optimization and manufacturing services in its Shanghai facility for a new monoclonal antibody being developed by Zai. In September 2015, Zai in-licensed the first-in-class mAb, which targets autoimmune diseases, from UCB of Belgium. At that time, Zai said it had completed preclinical development and was ready to file an Investigational New Drug request. The initial indications are expected to be graft-versus-host disease and inflammatory bowel disease.

Government and Regulatory

China has a new drug scandal. Over the past five years, a mother-daughter team has been able to buy $88 million worth of vaccines in China and sell them for a profit in 18 provinces. Because it was a black market operation, the vaccines were not properly refrigerated, which may have rendered them either ineffective or possibly deadly. For at least the past five years, a subset of China parents have not vaccinated their children because they did not trust vaccines, which has had a negative effect on public health. Now it looks as though they had good reason to be skeptical. The scandal may give foreign-sourced vaccines a boost, because they are less likely to be caught up in black market operations.

Trials and Approvals

Zhejiang Medicine (SHA: 600216) and Ambrx, a San Diego biotech that develops antibody drug conjugates, have started a Phase I trial of ARX788, an antibody targeting HER2 cancer. The trial will be conducted at several sites in Australia and New Zealand in patients with metastatic HER2-positive breast cancer. Zhejiang, which owns China rights to ARX788, has also filed with the CFDA to begin trials of the drug in China. In 2013, Zhejiang obtained rights to develop the drug in China from Ambrx.

Disclosure: none.

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