Week In Review: Sorrento Therapeutics Raises $150 Million From China Investors

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Includes: GLMD, KANG, SRNE
by: ChinaBio Today

Deals and Financings

Sorrento Therapeutics (NASDAQ:SRNE), a San Diego-China biopharma, closed a $150 million private placement led by Ally Bridge Group, which is headquartered in Hong Kong. The investors bought 25 million shares at $5.55 each, which was about Sorrento's price when the investment was announced on April 4. They will also receive warrants to buy 5 million additional shares at $8.50 each. Ally Bridge was joined in the financings by Beijing Shijilongxin Investment, FREJOY Investment Management and South Korea's Yuhan Corp. Yesterday, Sorrento announced a China JV with 3SBio (HK: 1530) of Shenyang to develop CAR-T drugs.

Yunfeng Capital, backed by Alibaba's (NYSE:BABA) Jack Ma, has apparently won the takeover battle for iKang Healthcare (NASDAQ:KANG), a chain of private China healthcare clinics. The other two bidders for the company -Meinian Onehealth and management -- have withdrawn their bids, said the site, leaving Yunfeng as the only contender. The day before, Yunfeng offered $20-$25 per ADS, valuing iKang at up to $1.6 billion.

Innovent Biologics of Suzhou announced a $120 million bispecifics discovery partnership with EpimAb Biotherapeutics, a Shanghai startup that is a subsidiary of Adimab. Innovent will acquire rights to EpimAb's proprietary Fabs-In-Tandem Immunoglobulin (FIT-Ig®) platform to develop multiple bispecific antibodies for China. It will also own the right to out-license the programs to ex-China markets. EpimAb is entitled to an upfront payment and milestones of up to $120 million, royalties and a share of ex-China out-licensings. Innovent said the deal was an addition to the bi-specific antibodies it partnered with Eli Lilly (NYSE: LLY) in a $1 billion deal announced in 2015.

3SBio (HK: 1530) of Shenyang and Sorrento Therapeutics, a US-China biopharma, formed a joint venture to develop CAR-T drugs in China. 3SBio will invest $10 million in the JV, and Sorrento will contribute China rights to its clinical-stage CAR-T cancer treatment and two other CAR-T therapies. 3SBio will own 51% of the JV. The agreement will be carried out between 3SBio's subsidiary, Shenyang Sunshine Pharmaceutical, and Sorrento's China subsidiary, TNK Therapeutics.

Applied StemCell, a Bay-area gene-editing company, raised $19 million in a Series D funding from China investors. The company said it would use the funds to develop its pipeline of therapeutics for monogenic blood disorders and advance its CRISPR and Cas9 gene editing platform. Applied StemCell provides genetically modified human cell lines and transgenic animal models to researchers and also uses its gene editing technology to develop gene/stem cell-based gene therapies. The funding was led by HerMed Capital, a healthcare PE fund formed by Fosun Pharma (SHA: 600196; HK: 2196) and the SK Group, a Korean conglomerate. Additional investors included Ping An Ventures, Vi-Ventures and BioSciKin.

Parkway Pantai announced plans to build a $70 million, 450-bed private hospital in Shanghai, expected to open in 2020. Parkway is already building hospitals in Hong Kong and Chengdu. The new facility will be part of state-owned Shanghai New Hongqiao International Medical Center, which is located near Shanghai's Hongqiao airport. Parkway Pantai, headquartered in Singapore, is a unit of IHH Healthcare, a Malaysian company that owns 49 hospitals around the globe. ParkWay formed 70:30 joint venture with Shanghai Hongxin Medical Investment Holding to build the hospital.

Trials and Approvals

Galmed Pharma (NASDAQ:GLMD) of Israel includes a China arm in its Phase IIb trial of aramchol, a liver disease treatment, taking advantage of new China regulations for multinational trials. The Galmed trial is most likely one of the first Phase II multinational trials allowed in China. Before last August, when China revamped its multinational trial regulations, it was not possible for a company to add a China arm to a Phase II trial. Only Phase III multinational trials were allowed. Aramchol addresses a serious unmet need in China, which no doubt influenced the CFDA's decision.

Nanjing Frontier Biotechnologies announced its long-acting HIV-1 inhibitor met the primary endpoint in a Phase III trial, based on an analysis of the interim data. Albuvirtide, administered once-weekly with ritonavir-boosted lopinavir, showed non-inferiority to a WHO-approved three-drug regimen. In the 48-week trial, albuvitide was administered as a second-line treatment to adults infected with HIV-1. Based on the results, Frontier will seek accelerated China approval of the drug from the CFDA.

Disclosure: none.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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