Deals and Financings
Shanghai's C-Bridge Capital is raising capital for its third healthcare private equity fund with a target of $650 million. Just six months ago, C-Bridge closed its second PE fund at a hard cap of $400 million. C-Bridge focuses on PE capital because it believes later-stage companies are currently the most promising investment sector in China healthcare. The company emphasizes China investments, but considers itself a global investor. With the new fund, C-Bridge will have $1.35 billion in assets under management.
Ping An Healthcare and Technology, better known as Ping An Good Doctor, has successfully filed for a Hong Kong IPO. The much anticipated offering is expected to raise $1 billion, though the initial 520 page prospectus does not predict a value for the transaction. However, the IPO prospectus does reveal that Ping An Good Doctor booked $130 million in revenue during the first nine months of 2017, a 240% increase from a year earlier with a loss of nearly $80 million.
The shareholders of JHL Biotech (TPEx: 6540) voted to approve the company's voluntary delisting from the Taiwan stock exchange. The biosimilar company, which has a $419 million market capitalization, operates in Taiwan and Wuhan, China. Unlike most privatizations, the voluntary transaction does not require shareholders to tender their shares in the company, nor does it involve private equity/loan backing. JHL says the transaction allows the company to seek new sources of financing, including a foreign IPO - which could be in Hong Kong.
Medopad, a UK AI mobile healthcare app, signed 15 contracts with China companies that have a total value of over $140 million. Medopad combines AI with patient records for doctors and remote monitoring among its many services. The partnerships included a collaboration with Tencent Holdings (OTCPK:TCEHY) to use AI to support doctors' decision-making, plus other agreements with China Resources, Ping An Good Doctor, Peking University, Lenovo New Vision and GSK China. Medopad officials were part of a UK trade mission to China led by Prime Minister Theresa May.
CANbridge Life Sciences of Beijing in-licensed Greater China rights to a breast cancer treatment from Puma Biotech (NYSE:PBYI) of the US in a $70 million agreement. In July 2017, Nerlynx (neratinib) was approved in the US for patients with early-stage HER2-positive breast cancer whose cancer recurs after treatment. CANbridge paid $30 million upfront for the China rights and will add up to $40 million in milestone payments, plus royalties.
TytoCare, an Israeli company that offers medical devices for telehealth, closed a $25 million funding that was led by Ping An's (HK: 2318; SHA: 601318) Global Voyager Fund. In addition, Ping An formed a strategic partnership with TytoCare to lead the company's expansion into China, probably through Ping An's Good Doctor mobile app. To facilitate online diagnosis, TytoCare makes home use products that include an otoscope (ears), stethoscope (heart, lung and abdomen), basal thermometer and digital camera (skin and throat). In 2016, TytoCare received US approval of its $299 home-use stethoscope.
Engine Biosciences, a San Francisco-Singapore startup, raised $10 million in seed capital to develop its artificial intelligence/genomics drug development platform. The company claims its platform, which combines massively parallel biological experimentation with artificial intelligence, provides faster and deeper understanding of biologic interactions, offering new insights into drug development. The seed round was co-led by California's DHVC and Shanghai's 6 Dimensions Capital (the entity formed by a merger between Frontline Bioventures and WuXi Healthcare Ventures).
CASI Pharma (NASDAQ:CASI), a US-China company, acquired a portfolio of 29 generic drugs from Sandoz, the generic drug division of Novartis (NYSE:NVS). Each of the products has submitted Abbreviated New Drug Applications (ANDAs) for US approval. CASI, which will focus on bringing the generic drugs to China, will select members of the portfolio for development, emphasizing entecavir, an antiviral for hepatitis B. It may also manufacture the drugs in China for USuse. The financial terms of the agreement were not disclosed.
NCPC GeneTech, the biotech division of North China Pharma, in-licensed China rights for a biosimilar to a second-gen renal anemia treatment from South Korea's CJ Healthcare. CJ-40001 is a biosimilar to NESP, the second-generation renal anemia treatment developed by Kyowa Hakko Kirin of Japan. It is aimed at anemia caused by chronic kidney disease or cancer chemotherapy. In comparison with first-gen treatments, CJ-40001 offers reduced administration of only once per week or once every two weeks.
Trials and Approvals
A subsidiary of Lee's Pharm (HK: 0950) received permission to begin China clinical trials of ZKAB001, a PD-L1 immuno-oncology monoclonal antibody. Lee's Pharm, a Hong Kong company, in-licensed greater China rights to the candidate from San Diego's Sorrento Therapeutics (NASDAQ:SRNE) in 2014 in a deal that could be worth up to $50 million. Lee's Pharm was granted approval to test ZKAB001 in three cancer indications. Its subsidiary, China Oncology Focus, is in charge of developing the drug.
The KraneShares (NYSEArca: KURE) MSCI All China Health Care Index ETF has begun trading on the New York Stock Exchange. KraneShares, an ETF (Exchange-Traded Fund) provider with several China ETFs already available, offers the ETF to people who want to invest in China's health care industry. The ETF will mimic the performance of the MSCI All China Health Care Index, including healthcare companies listed in Shanghai, Shenzhen, Hong Kong and the US. Small, medium and large-cap companies are included in the list.
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