China Biotech Week In Review: Chindex Taken Private By Fosun And TPG

by: ChinaBio Today

Deals and Financings

Chindex (NSDQ: CHDX), a China operator of private hospitals and clinics, accepted a buy-out offer of $24 per share from company insiders, which values the company at $434 million (see story). The insiders consist of Fosun Pharma (SHA: 000196; HK: 2196), which already owns 17.5% of Chindex, the US private equity group TPG and Roberta Lipson, the company's founder and CEO. Previously, TPG funded ShangPharma's go-private transaction.

GlaxoSmithKline (NYSE: GSK) will acquire Novartis' (NYSE: NVS) money-losing vaccine business for $7.1 billion (see story). That business includes manufacturing facilities in China and India. Novartis bought an 85% share of vaccine maker Zhejiang Tianyuan Bio-Pharma in 2011 for $125 million, which will transfer to GSK. GSK expects to realize about $800 million of savings once the Novartis vaccine business is fully integrated.

Domain Elite made a $6.5 million investment in SMART Medical Systems, an Israeli medical device company, to help SMART bring its products to China. SMART makes innovative endoscopy and colonoscopy products. Domain Elite said the $6.5 million is the first phase of a multi-step investment plan. Domain Elite is a partnership between US venture capital company Domain Associates and Elite Consulting of Beijing. The partnership brings western drugs and medical devices to China.

Fosun Pharma is in the hunt to acquire Australia's Healthscope, a hospital and pathology company owned by two US private equity firms, TPG and Carlyle Group (NYSE: CG) (see story). The deal is significant: Healthscope could draw bids as high as $5 billion. Earlier this week, Fosun and TPG teamed up to buy China hospital operator Chindex for $434 million. Fosun's parent, the conglomerate Fosun International, has been busy acquiring ex-China investments lately.

Beckman Coulter Life Sciences, a US lab equipment company, acquired Xitogen Technologies of Suzhou. Xitogen makes flow cytometry equipment. Founded in 2011, Xitogen has R&D operations in Suzhou's Industrial Park (BioBay) and a manufacturing facility in Dalian, which will give Beckman Coulter a China base of operations. Terms of the transaction were not disclosed.

Fosun Pharma entered a collaboration that gives the company exclusive China rights to PaMZ, a novel TB drug regimen developed by the TB Alliance. In exchange for the rights, Fosun will sponsor the China cohort of a global Phase III of PaMZ, and it has agreed to produce the drugs at a reasonable cost. The regimen is designed to treat both drug-sensitive TB and multi-drug resistant TB.

Yichang Chang Jiang Pharma will supply Biodel (NSDQ: BIOD) of the US with research supplies of the API for insulin aspart, the API in Novolog, a Novo Nordisk fast-acting insulin (see story). Biodel intends to reformulate the drug into an ultra-fast version. As part of the agreement, Biodel granted Chang Jiang's parent, HEC Pharm, an option to negotiate for China rights to any resulting product candidates.

Eddingpharm in-licensed China distribution rights to two allergy products made by Danish pharma ALK. The agreement includes ALK's Soluprick SQ, a diagnostic skin prick test for house dust mite allergy, and Alutard SQ, a subcutaneous immunotherapy. Eddingpharm will make an unspecified upfront payment to ALK for the seven-year contract. Respiratory products are one of Eddingpharm's focus areas.

Government and Regulatory

Sinovac Biotech (NSDQ: SVA) will receive a $9.6 million government grant to build a production facility for its Enterovirus 71 vaccine against hand foot and mouth disease (HFMD) (see story). The company said the grant was a response to epidemic levels of HFMD in China and the government's desire to develop China biotech. Sinovac must use the money to complete construction of its GMP-compliant production facility, which will have an annual capacity of 20 million doses of EV71 vaccine, and to commercialize the vaccine in China.

Disclosure: none.

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