Week In Review: C-Bridge Raises $400 Million For Second China Healthcare Fund

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Includes: CAH, CELG, JNJ, KANG, NVS, PFE, RHHBY
by: ChinaBio Today

Deals and Financings

C-Bridge Capital, a China private equity firm with a life science focus, closed its second fund, C-Bridge Healthcare Fund II, at its $400 million cap. C-Bridge plans to invest in late-stage companies in the fields of biotechnology, pharmaceuticals, medical devices and health care, particularly those with cross-border ambitions. C-Bridge is active in Asia-Pacific - especially China - the US and Israel. Its first healthcare fund closed in 2014 after raising $200 million.

iKang Healthcare (NASDAQ:KANG) will form an investment partnership with China Industrial Asset Management to build and/or buy more China clinics. iKang operates a chain of private preventive healthcare clinics in China that cater to corporate clients. The partnership between the two companies will raise a fund of up to $74 million for the new clinics. iKang will operate the clinics for at least two years and then return the investment at a price of the original cost plus 15% per year. iKang said the fund will allow the company to expand at a reasonable cost.

Cardinal Health (NYSE:CAH), the second largest drug distributor in the US, is reported to be actively seeking a buyer for its China drug operations, with bids expected between $1.2 billion and $1.5 billion, according to sources. Shanghai Pharma, China Resources Pharma and Sinopharm are rumored to be suitors for Cardinal China, a significant PRC drug/device distributor. In 2010, Cardinal established a foothold in China with its $470 million purchase of Zuellig Pharma, a company that in-licensed China/Asia rights to western drugs.

Geneseeq, a Nanjing-Toronto genetic sequencing company, closed a C funding round of "hundreds of millions of RMB," according to the company. Founded in 2008, Geneseeq focuses on genetic sequencing to provide personalized medicine for tumor related diseases. The company has a pan-genomic testing system that detects genetic abnormalities in 416 cancer-related genes. Each 100 million RMB would be worth $15 million, implying the funding totaled at least $30 million.

PegBio Co. of Suzhou has raised $20 million in an E Round from Tasly Pharma, a unit of Tianjin's Tasly Pharma Group (SHA: 600535), one of China's ten largest pharmaceutical companies. PegBio, a pegylation technology specialist, develops extended-release products. The company is developing Pfizer's (NYSE:PFE) glucokinase inhibitor for China, a clinical-stage treatment for type 2 diabetes. It is also working on its own glucagon-like peptide-1 (GLP-1) (with a pegylated coating) for diabetes 2, a treatment that requires only once-weekly injections.

Uni-Bio Science (HKSE: 690), a Hong Kong company focused on diabetes, ophthalmology and dermatology products in China, completed an $18.2 million private placement. The company placed the majority of the new shares ($15.4 million) with HeungKong Group of Guangzhou, which will become a Uni-Bio strategic shareholder with a 14.2% stake. Uni-Bio will now have access to HeungKong's distribution network, and the two companies plan to open jointly-owned biopharma incubators and pursue international M&A opportunities.

Symbow Medical completed a $17 million Series A funding, led by China healthcare fund Huayi Capital. Symbow, a Beijing company, is developing a surgical navigation device that is designed to be used together with MRI or CT machines as a real-time navigator for surgery. Unlike other surgical navigation devices, Symbow's device focuses on breast cancer diagnosis and minimally invasive surgery. The A round also included the state-owned National Emerging Industry Guidance Fund, Shandong Buchang Pharma and Sangel Capital.

The Shanghai-Israel Investment Fund and BRM Group, an Israeli investment firm, co-led a $9 million Series B financing in Israel's Rapid Medical. Rapid is developing two neurovascular interventional devices: the Tigertriever Revascularization device used to remove stoke-causing clots, and the Comaneci Adjustable Remodeling Mesh, an external device used during embolization procedures. The B round will allow Rapid Medical to begin a US clinical trial of Tigertriever and European commercialization of both the Tigertriever and Comaneci devices.

Trials and Approvals

Lee's Pharm (HK: 0950) received CFDA approval for a Phase III trial of Pexa-Vec in patients with advanced liver cancer. The study is part of the PHOCUS global trial that was started in 2015. Lee's Pharm owns China rights to the drug, and SillaJen (KOSDAQ: 215600), a Korean immunotherapy company, is the global developer. Pexa-Vec is an engineered vaccinia poxvirus designed to kill cancer cells and provoke a natural immune response. The CFDA held an advisory committee meeting earlier this year to discuss the Pexa-Vec trial, the first such meeting under a new CFDA initiative to improve transparency.

Ascentage Pharma was granted Investigational New Drug (IND) approval by the CFDA for APG-1252, a novel Bcl-2/Bcl-XL inhibitor. APG-1252, one of three programmed cell death candidates in Ascentage's development pipeline, started a Phase I trial in the US earlier this year. The trial will enroll patients with small cell lung cancer. Ascentage is headquartered in Hong Kong, but operates an R&D facility in Shanghai and a lab/manufacturing facility in Taizhou's China Medical City. The company raised $72 million in a B round in late 2016.

CStone Pharma of Suzhou announced its PD-L1 monoclonal antibody, CS1001, was approved to begin clinical trials in China by the CFDA. One year ago, CStone raised $150 million in an A round from three China investors - Oriza, Boyu and WuXi Healthcare. CStone said CS1001, which was approved after an eight-month review, is China's first fully human, full-length PD-L1 mAb to begin trials, although several PD-1 candidates have already started the clinical process.

Government and Regulatory

China will add 36 new drugs to its list of insurance-covered products after their manufacturers agreed to deep price cuts. China's Ministry of Human Resources said the cuts averaged 44% and reached a high of 70%. There were 31 western drugs - 15 of them for cancer - included in the list of newly added products and five Traditional Chinese Medicines. Big names for cancer in the adds included Roche's (OTCQX:RHHBY) Herceptin, Avastin and MabThera; Celgene's (NASDAQ:CELG) Revlimid; J&J's (NYSE:JNJ) Zytiga and Novartis' (NYSE:NVS) Afinitor.

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