Week In Review: Shanghai United Imaging Raises $500 Million In Series A; Zai Lab Will IPO Next Week

Includes: PTN, TKPYY, ZLAB
by: ChinaBio Today

Deals and Financings

Shanghai United Imaging Healthcare, a major China medical imaging device maker, closed a $500 million A financing from large China investors. It is the largest medical device funding in China to date, and values Shanghai United Imaging at $5 billion. The company offers a complete line of high-end imaging machines (CT, MRI, PET, X-Ray) with the goal of providing machines that are state-of-the-art or better while undercutting the prices of foreign imaging device makers by 20%.

Shanghai's Zai Lab (NASDAQ:ZLAB) will issue 5.8 million shares at an expected range of $16-18 each in its upcoming US IPO (see story). At the midpoint, $17 per ADS, Zai will raise $90 million at a market capitalization of $800 million. The company has $30 million in non-binding commitments from institutional investors for the offering. If all goes as planned, Zai will complete the IPO next week. Zai has done very well for itself: the company is only four years old, and it has gotten to this point on just $164.5 million in equity funding.

Shanghai Fosun Pharma (SHA: 600196; HK: 02196) signed a $106 million agreement for greater China rights to a female sexual desire disorder treatment from Palatin (NYSEMKT:PTN) of the US (see story). Fosun will be in charge of regulatory approval and marketing of bremelanotide in its territories. Palatin has completed two successful Phase III trials of bremelanotide in the US and will file for FDA approval in early 2018. Fosun will pay $5 million upfront and another $7.5 million upon China approval. It will also make payments of up to $92.5 in sales milestones.

Harbour BioMed, a China-US biopharma, will collaborate with Korea's HanAll Biopharma to develop two of HanAll's novel biologics in Greater China. HanAll will receive up to $81 million in a combination of upfront and milestone payments, plus royalties. The two HanAll biologics are aimed at autoimmune and inflammatory diseases. Harbour was formed in late 2016, when the company raised $50 million in initial capital and acquired Harbour Antibodies BV, a Dutch company with two proprietary transgenic mouse platforms.

Wellem raised $30 million in a Series B Round to expand its network of franchised private pediatric clinics in China. The round was led by GTJA Investment Group, a Shenzhen healthcare private equity firm. Wellem, which is based in Shanghai and currently runs 11 clinics in China, provides medical services, including vision and dental, for children from newborns to 18 years old.

Suzhou Basecare Medical Device closed a $15.3 million B financing for its assisted reproduction diagnostic products. Basecare has been CFDA approved to market its third-generation pre-implantation genetic screening (PGS) product in China, the first third-gen PGS product to be approved. The PGS product tests an embryo for genetic abnormalities before it is implanted. Basecare is a subsidiary of DaAn Gene and affiliated with the Sun Yat-Sen University of Guangzhou.

Ennovabio, a Shanghai novel drug company, raised $10 million in a pre-A funding, led by HighLight Capital. Ennovabio is developing an innovative drug that targets brain glioma, while it also builds a compound library that will be used to make deals with other pharmas. The company was founded in December 2016 by Jiang Lei, who worked previously with Switzerland's Novartis (NYSE:NVS) and then Shanghai HaiHe Pharma and Shanghai Green Valley Pharma.

Spineology of St. Paul, Minnesota, announced a $5 million investment from Hermed Capital, a Shanghai private equity fund. Spineology focuses on innovative medical devices that aid anatomy-conserving surgery™ techniques, especially those that allow less-invasive surgeries or shorten procedure lengths. Hermed made the investment via a convertible debenture. Spineology will use the proceeds for commercialization, product development, and clinical research.

China Resources Holdings invested $4.6 million in Converd Company, a Hangzhou company developing oncolytic virus products. As part of the investment, Converd will occupy space in China Resource's Life Science Park, an incubator. Converd's president is Fang Hu, who was CEO and president at Shanghai Sunway when it became China's first biopharma with an approved oncolytic virus product in 2005. China Resources Pharma (HK: 3320), a listed subsidiary of state-owned CR Holdings, completed a $1.8 billion IPO in Hong Kong last year.

Grid Therapeutics of Durham, North Carolina, completed an A financing of unspecified size to develop its cancer immunotherapy. The lone investor in the round was Longview International of Singapore, a firm that invests in novel life science companies. Last month, Grid acquired global rights to an innovative antibody technology discovered by Duke University researchers, based on targeting a protein that protects tumor cells from the immune system. Grid plans to start a Phase I trial of the candidate in 2019.

HitGen, the Chengdu-Houston lead-generation CRO, signed a deal to discover novel drug leads for Japan's Takeda Pharma (OTCPK:TKPYY) (see story). HitGen will search its DNA encoded chemical libraries, which HitGen says contain over 90 billion novel drug-like small molecule and macrocycle compounds, for likely candidates. The Takeda collaboration is the third that HitGen has announced in the last month. As usual, HitGen will receive an upfront payment plus milestones, though it doesn't release specifics.

Disclosure: None.

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