China Biotech In Review: KKR Makes Its First Healthcare Investment In China Cord Blood

 |  Includes: CO, KKR, KOOL
by: ChinaBio Today

Deals and Financings

Shanghai Fosun Pharma (SHA: 600196) received approval for an IPO in Hong Kong that will raise between $600 million and $800 million. The transaction is expected to occur in the second quarter. Because the company's Shanghai stock price has slipped lower in the last six months, the offering has also dropped in size from the $960 million expected when news of the IPO first surfaced.

China Cord Blood Corp. (NYSE: CO), the largest operator of cord blood banks in China, reported Kohlberg Kravis Roberts (NYSE:KKR) will invest $65 million into the company (see story). KKR made the investment through its China Growth Fund LLP, which bought $65 million of 5-year convertible bonds. It is the fund's first healthcare investment. The bonds pay 7% face amount, though other conditions can increase that rate, and they convert into common stock at roughly today's market price.

China Cord Blood also announced it will build a $32 million stem cell biomedical facility in Chongqing Liangjiang New Area (see story). The facility will include a stem cell and regenerative medical engineering center.

Lee's Pharma (HK: 950) of Hong Kong in-licensed the China rights to a gastrointestinal-protective form of aspirin from PLx Pharma Inc, a Houston startup. PL2200 is a development-stage aspirin that is aimed at the cardiovascular market. Lee's Pharma develops its own drugs and also in-licenses western products for sale to the China market.


Hainan Haiyao (SHE: 000566) will invest $3.2 million to develop production technology of 7-ACCA, a cephalosporin antibiotic intermediate, with Shanghai Knowshine. 7-ACCA is the key intermediate of cefaclor. Most of China's cefaclor is imported because domestic companies cannot produce 7-ACCA. Knowshine, which was established in 2006 in Shanghai's Zhangjiang Hi-Tech Park, specializes in developing manufacturing methods of APIs and intermediates.

Company News

Lotus Pharmaceuticals [OTCBB: LTUS] reported the cost of building a new Beijing headquarters has brought on a severe cash crunch. To save money, Lotus will stop paying outside auditors, a move that will eventually culminate in a delisting of the company's stock. Lotus issued an open call to any investors who might have an interest in its business. Management said it wants to work out terms that will allow it to continue operating as a publicly owned company.

Trials and Approvals

ThermoGenesis (NSDQ: KOOL), a US company that makes stem cell processing and storage devices, received SFDA approval for its BioArchive system (see story). The BioArchive System is an automated cryogenic device that is used for cryopreserving and archiving blood stem cells from umbilical cords for transplant. The company already has three stem cell banks in China as customers.

Disclosure: none.