Week In Review: BGI Genomics Plans $250 Million Shenzhen IPO

Includes: AMGN, PFE
by: ChinaBio Today

Deals and Financings

BGI Genomics, the contract sequencing and diagnostics divisions of China genomics sequencing company BGI, filed to IPO on the Shenzhen Chi-Next exchange with a proposed target of raising $250 million. Late last year, the Shenzhen Exchange rejected a similar application from BGI Genomics because its documentation was not complete. The previous transaction was rumored to be much larger - about $600 million. BGI Genomics, a division of BGI Holdings, includes several of BGI's revenue producing divisions, such as BGI Tech, its contract genomics sequencing service subsidiary, and BGI Dx, its clinical diagnostic division.

Shandong Luoxin Pharma (HK: 8058) of Shanghai received a $301 million management-led privatization offer. Ally Bridge Group, which is participating in the deal, will buy 33% of the company's outstanding shares, and the company's management will purchase the rest. The offer represents a 25% premium over the previous closing price - the stock has not been trading since early this month pending news. Luoxin offers a broad list of products, including antibiotics, anti-virals and cancer treatments. The offer prices the company at about 24 times earnings.

Fosun Pharma (SHA: 600196; HK: 2196) completed its $90 million purchase of an 80% stake in Swedish device company Breas Medical Group. Breas makes homecare ventilation and sleep apnea devices, which it markets in Europe and the US. Fosun intends to bring the products to China. Fosun bought the stake from PBM Capital, a venture investor. PBM put the company together by acquiring three separate ventilation and apnea device companies, which it operated under the name Breas Medical Group.

Suzhou Ribo Life Science, a company focused on small interfering RNA drugs, raised $39 million in a B round led by China's State Development and Investment Corporation. Founded in 2007, Ribo is developing siRNA drugs for hepatitis B, hyperlipidaemia and liver cancer. In 2012, Ribo formed a China JV with US-based Quark Pharma, also a siRNA company. Three years later, the CFDA approved the JV's Ischemic Optic Neuropathy siRNA drug for use in China.

Shenzhen Kangtai Biological Products (SHZ: 300601), a vaccine company, completed a modest $20 million six weeks ago in an IPO on the Shenzhen Chi-Next Exchange. The initial reaction in public trading was similarly subdued, but in the six weeks since then, Kangtai's stock price has climbed steadily, rising from its offering quote of 3.29 RMB to 40.51 RMB today - a 12-fold return in under a month and a half. Its Chairman, Weimin Du, who owns 56% of the company, is now a China biotech billionaire, his holdings in the company worth $1.3 billion.

Shanghai Newsummit Biopharma (SHZ: 002370) in-licensed rights to a novel antibody targeting Hepatitis C virus from MRC Technology of the UK. Newsummit, a CRO with expertise in process development and clinical studies, is a unit of Zhejiang Yatai Pharma, an infectious disease company. Newsummit has established a collaborative CRO network for other services. MRC said the novel molecule was humanized by MRC Tech scientists, and originated in the laboratory of Prof. Arvind Patel, of the MRC-University of Glasgow Centre for Virus Research. Financial details were not disclosed.

Jiangsu Nhwa Pharma (SHZ: 2262) acquired China rights to an extended-release form of aripiprazole (Ablify), an anti-psychotic drug being developed by Zysis of the UK. Ablify was indicated to treat schizophrenia, bipolar and major depressive disorder. Developed by Japan's Otsuka, its US patent expired in 2014. Zysis' product is a once-weekly oral formulation of the drug. Nhwa paid $500,000 upfront and will pay another $200,000 once Zysis transfers technology. Nhwa will also pay a non-disclosed royalty on sales.

Trials and Approvals

Pfizer (NYSE:PFE) received CFDA approval to market an oral treatment for rheumatoid arthritis in China. Xeljanz® (tofacitinib citrate), a Janus kinase inhibitor, is indicated for adult patients with moderately to severely active rheumatoid arthritis whose disease does not respond to methotrexate (MTX). Pfizer says Xeljanz, which was granted marketing approval in the US in 2012, is the first oral JAK inhibitor approved for RA patients in China.

Company News

Just Biotherapeutics, a Seattle company dedicated to lowering the cost of biopharma manufacturing, will use prefabricated clean rooms made by G-CON of Texas for its first commercial manufacturing site, being built in Hangzhou. Just Hangzhou (Just China) is a partially owned subsidiary of Just Bio. Just Bio was started by former Amgen (NASDAQ:AMGN) employees three years ago. In 2016, it raised $14 million in a funding led by the Gates Foundation, which had previously committed to backing Just Bio with $24 million over four years.

Disclosure: none.

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