Week In Review: Management Offers $3.5 Billion To Privatize Mindray Medical

Includes: AZN, CASI, FSXMF, MR, WX
by: ChinaBio Today

Deals and Financings

Mindray Medical (NYSE:MR), the Shenzhen medical device maker, received a going-private offer from its three top executives at $30 per ADS, a modest 10% over the previous day's closing price. The offer values Mindray at $3.5 billion. In its Q1 earnings report, Mindray warned that its net income for 2015 would fall by a mid-teens percentage. Brokerage houses responded by lowering their ratings on the company, some to a sell and others to a strong sell. Previous to the Q1 earnings report, Mindray was trading above $30 per ADS.

Luye Pharmaof Shandong Province terminated its $1 billion agreement to buy Beijing Jialin Pharma, without giving any explicit reason for its dramatic change of heart. After Luye concluded its $746 million IPO in Hong Kong last summer, the company struck two separate deals to acquire Jialin soon after. It seemed as though the acquisition was the unspecified purpose behind the IPO. Now, describing itself as "prudent," Luye has abandoned the transaction, implying the expected returns did not justify the risk.

Faes Farma (OTC:FSXMF), a Madrid drugmaker, will establish a JV with China's Eddingpharm, a drug in-licensing company, to market Faes' products in China. Initially, the JV will commercialize four of Faes' offerings, with more to follow. Although the drugs were not specified, the portfolio presumably includes bilastine, a patent-protected non-sedating H1-antihistamine for allergic rhinitis and hives, which Faes markets under the name Bilaxten.

WuXi AppTec (NYSE:WX) became an enterprise partner of the Fudan University-led Collaborative Innovation Center of Genetics and Development (CICGD). The Center was formed by eight China universities and institutes. The CICGD will have access to WuXi NextCODE's population human genomics database system and its integrated research and clinical tools. Using the system, CICGD scientists will be able to speed up their gene sequencing and bioinformatics analysis with the goal of accelerating research, diagnosis, and treatment for inherited diseases and cancer.

Government and Regulatory

The Chinese Academy of Sciences broke ground on a $323 million Genetic Resources R&D Center (South) facility in the Changzhou Hi-Tech District. The project involves two major areas of research: Modern Agriculture and Regenerative Medicine. Regenerative medicine will focus on stem cell science to build a tissue engineering research center and a genetic testing research center for genetic diseases in China.

China has ended the official caps on most drug prices. Although the administrative change may sound like a major reform, the actual effect will be almost nil. For the majority of drugs sold in China, most of which are generics, the price is actually set by the province-by-province auctions. However, for multinational pharmas in China, whose premium prices have been protected from the auction process, the situation is quite different and they are losing their privileged niche.

Trials and Approvals

AstraZeneca (NYSE:AZN) and Hutchison China MediTech (AIM: HCM) announced positive preliminary data from a Phase Ib trial of savolitinib (AZD6094), a c-Met inhibitor AstraZeneca in-licensed from Chi-Med in 2011. Savolitinib was tested in combination with AZD9291, another AstraZeneca investigational molecule, which targets EGFR. Of the 11 evaluable patients in the study, six partial responses (confirmed and unconfirmed) have been observed to date.

CASI Pharma (NASDAQ:CASI)), a US-China biopharma, filed for CFDA approval to begin a China Phase II clinical trial of its lead novel drug candidate, ENMD-2076, in patients with fibrolamellar carcinoma. The trial is an extension of a similar US trial. CASI has already started a three other US-China Phase II tests of the drug for various forms of cancer. Headquartered in Maryland with a lab in Beijing, CASI in-licenses products for the China market, but is developing ENMD-2076 globally.

Disclosure: none.

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