Week In Review: Luye Pharma Completes Successful IPO In Hong Kong

Includes: LLY, WX
by: ChinaBio Today

Luye Pharma (HK: 2186) priced its Hong Kong IPO at the top end of its proposed range, placing 999.6 million shares at HK$5.92 to raise US$764 million (see story). The shares will begin trading on Wednesday, July 9. The price reflects a price-earnings ratio of 26.6 and values Luye at $2.5 billion. Luye was listed in Singapore until 2012, when three private equity firms and the sovereign wealth fund of Singapore (plus the company's chairman) took the company private.

Luye Pharma of China capped off a successful Hong Kong IPO with a strong first day of open-market trading, rising 12% to close at HK$6.65 (see story). In 2012, the company had been privatized at a valuation of $500 million, which means the IPO produced a 5X return for the investors. Because the IPO went so smoothly, it showed that Hong Kong is once again an attractive venue on which to list stable, growing China pharmas.

Grandhope Biotech (SHE: 300238) and its corporate parent, Guangzhou Zhiguang Biotech, plan to form a $48 million VC fund to underwrite stem cell and regenerative medicine projects. The projects will be carried out in conjunction with Peking University's Science and Technology Development Department. The two entities agreed to set up a stem cell/regenerative medicine research institute that will be housed at PKU. Grandhope will invest $9.5 million for a 40% stake in the entity; PKU will contribute intangibles for an equal 40% share, and the remaining 20% will be reserved for management.

Yabao Pharma (SHA: 600351) of China formed a partnership with Eli Lilly (NYSE:LLY) to co-develop an innovative Lilly treatment for type 2 diabetes (see story). The drug, LY2608204, is a glucokinase activator (GKA) that has completed a US Phase I trial. Yabao will fund China development of LY2608204 and own rights to market the drug in China. Lilly retains buy-in options to the program. Financial details were not disclosed.

HD Biosciences, a Shanghai drug development CRO, will partner with Marshall University of West Virginia to develop innovative treatments for cancer. The partners will share the costs of discovery and development of the drugs, and they will also own IP and commercialization rights jointly. The Marshall Institute for Interdisciplinary Research (MIIR) and the Marshall University Joan C. Edwards School of Medicine will be HD Biosciences' partners.

Trials and Approvals

BGI Diagnostics, a division of BGI-Shenzhen, announced that its non-invasive prenatal test, which uses a sample of maternal blood, was approved by the CFDA. The NIFTY™ kit tests for chromosomal abnormalities at Trisomy 21 (Down Syndrome), 13 (Patau Syndrome) and 18 (Edwards Syndrome). In April, the CFDA banned all clinical genetic testing, except for projects approved by the government. It wasn't clear, after the announcement, if any projects would ever be approved. By allowing BGI to market its test, the government has shown that it wants to control DNA tests, not stop them.

Henlius Biotechnology, a California-China biopharma that is developing biosimilar/bio-better drugs for the China market, filed an IND with the CFDA to begin clinical trials of its fourth molecule, a VEGF antibody. Although the CFDA has not defined a regulatory pathway for biosimilars, Henlius is adhering closely to international standards. Together with its major sponsor, Fosun Pharma (SHA: 600196; HK: 2196), Henlius plans to market its drugs in China while finding partners for other parts of the world.

Industry Insights

Steve Yang, PhD, the new COO of WuXi AppTech (NYSE:WX), may be the ultimate China life science insider. In a wide ranging interview, held at the recent ChinaBio® Partnering Forum, Dr. Yang described the huge development of China life science that has taken place during his career (see story). The conditions of his early China university education were very humble. But the future is dazzling. Dr. Yang envisions a world in which Wuxi's entire R&D platform is offered globally through a cloud-like service.

Disclosure: None