Week In Review: HighLight Capital Raising $229 Million For China Healthcare

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Includes: SVA, WX
by: ChinaBio Today

Deals and Financings

HighLight Capital of Shanghai, a healthcare early-stage private equity investor, is close to completing fundraising for its $229 million second fund, according to media reports. Two years ago, the company started operations with a $300 million initial fund. HighLight is interested in four healthcare sectors: healthcare services, medical devices, mobile healthcare and pharmas. Its investment focus spans all growth stages, though its particular interest is early and expansion stage, with investments ranging from less than a million to "hundreds of millions" (RMB) per company.

PharmaBlock Sciences, a Nanjing CRO/CMO, has been approved by China's National Equities Exchange and Quotations (NEEQ) to list on the New Third Board, the over-the-counter stock exchange in China. The company said it plans to file by the end of the year for a listing on Shenzhen's Growth Equity Market. Founded in 2006, PharmaBlock provides development services for chemical and biological drug makers.

WuXi AppTec (NYSE:WX) and Huawei of Shenzhen have launched their joint big data project, the China Precision Medicine Cloud. The new joint effort combines Huawei's cloud computing capability with the data organizing skills of WuXi's genomics analysis subsidiary, NextCODE. The joint project will be part of China's larger China Precision Medicine Cloud, which was announced at the beginning of 2016, though it isn't the government's official data depository. WuXi and Huawei expect their cloud data platform will link researchers from many genomic-related fields and facilitate scientific breakthroughs.

Jiangsu Hengrui Medicine (SHA: 600276) has signed a MOU for China rights to a oncolytic virus therapeutic developed by Japan's Oncolys Biopharma. The drug candidate, Telomelysin (OBP-310), is currently undergoing a Phase I/II trial in Taiwan for liver cancer. Hengrui, an active China in- and out-licensor of novel drug candidates, expects to sign a final contract for the drug in November of this year. Financial details were not disclosed.

Government and Regulatory

Sinovac Biotech (NYSE: SVA), a Beijing vaccine company, reported that new government regulations caused China vaccine revenues to fall 50% in Q1. After the recent vaccine distribution scandal in Shandong Province, China's State Council required vaccine makers to participate in the provincial tendering process - even though their products are sold to the private pay market. Provincial drug councils don't have procedures in place for these new regulations, and sales of vaccines slid lower in Q1 of this year as a result. Sinovac expects Q2 sales will be lower as well.

China's FDA, chronically understaffed for its large workload, faces another problem as well: once its staff members gain experience, they leave for enticing industry jobs that can pay five times their government salaries, according to a Reuters article. Experienced government regulators become valuable pharma staff members, people who know the CFDA's procedures and have strong contacts in the agency. The revolving door is one more obstacle in the CFDA's ongoing battle to provide effective drugs and prevent fraud in China healthcare system.

Company News

OrbusNeich, a vascular device company headquartered in Hong Kong, announced two new products to treat peripheral artery disease. The JADE and Scoreflex PTA balloons are the company's first devices for lower limb and arteriovenous (AV) fistula intervention. The peripheral products are additions to the OrbusNeich portfolio of coronary artery interventional products. OrbusNeich opened its Shenzhen manufacturing facility in 2001.

Disclosure: None