Deals and Financings
Innovent Biologics of Suzhou has filed to IPO on the Hong Kong Exchange under its new rules for pre-revenue biopharmas. The company plans to raise as much as $500 million, according to media reports, at a valuation of over $1 billion. Founded in 2011, Innovent has developed a pipeline of 17 biologic drugs with an emphasis on oncology. In 2015, the company formed a historic partnership with Lilly (NYSE: LLY) worth up to $1 billion plus. In addition, Innovent has filed for China approval of its first candidate, a PD-1 immuno-therapy.
Bain Capital Private Equity will acquire DSM Sinochem Pharmaceuticals (DSP) for nearly $700 million. DSP, headquartered in Singapore, is a 50/50 joint venture between Holland's Royal DSM and China's Sinochem Group, a state-owned entity. The JV makes intermediates, APIs and finished drugs, primarily beta-lactam antibiotics, next-gen statins and anti-fungals. It generated sales of $511 million in 2017. The two current owners will split $580 million upon closing plus another $120 million in earn-out payments.
China Grand Enterprises, an investment firm, together with its affiliate Huadong Medicine (SHZ: 000963) are in early stage talks to acquire Sinclair Pharma [L: SPH] (OTC:SCLRF) (OTCPK:SRPHF), a UK aesthetics company. Sinclair climbed 23.5% on the news, raising its market capitalization to $156 million. Based on its collagen stimulation technology, Sinclair offers a variety of minimally invasive, long-duration fillers and smoothers for the skin. Under British rules, China Grand has 30 days to strike a final deal for Sinclair.
LinkDoc Technology, a Beijing big data company focusing on cancer, completed a $151 million D financing that was led by China Investment Corporation, a China sovereign wealth fund. Founded in 2014, LinkDoc has announced several previous funding rounds, but it has never disclosed their size. The company collects medical data, puts it into a standardized format, and stores the data on the cloud. It has gathered medical records from patients and comprehensive clinical data on 3,000 diseases and partnered with about 500 first-tier hospitals across China.
Athenex (NASDAQ:ATNX), a US-China biopharma, announced two deals for China-developed drug candidates: it formed a $145 million JV with Xiangxue Life Sciences to develop T-cell receptor-engineered T cell (TCR-T) molecules for cancer, and it acquired global rights to a pegylated genetically modified human arginase from Avalon PolyTom of Hong Kong. In addition, Athenex announced a $100 million investment from Perceptive Advisors of the US to develop new drugs. The company is headquartered in Rochester, New York, with additional R&D and manufacturing facilities in Chongqing.
Sinovac Biotech (NASDAQ:SVA), a Beijing vaccine maker, completed an $86.7 million private placement from two China-focused healthcare investors, Vivo Capital and Advantech Capital. For two years, Sinovac has been struggling to complete a management-led privatization, but one of its own subsidiaries, Shandong Sinobioway (SHA: 002581), led an opposition group, which consistently outbid management's offers. Until now, neither side has backed down, but Sinovac admitted its privatization "might not prevail," which led to the PIPE (private investment in a public entity) alternative.
Two young Boston-area biotechs have filed with the Hong Kong Exchange to conduct IPOs on the exchange, taking advantage of the new rules allowing pre-revenue companies to list and seeking the high valuations Hong Kong investors offer. Stealth BioTherapeutics and AOBiome Therapeutics are both developing novel drugs that are in (or close to) Phase III trials. The two US biopharmas join two China companies - Ascletis and Innovent - that have already filed for Hong Kong IPOs, while more are expected to follow soon.
Two China companies, Hybio Pharma (SHZ: 300199) and Yunfeng Capital, acquired AMW GmbH, the owner of Endomedica, a privately held German company that specializes in transdermal patch products and long-acting biodegradable drug implants. The new owners promised to invest new capital into AMW to develop new products and internationalize the company. Yunfeng Capital, a private equity firm, was started by Alibaba's (NYSE:BABA) Jack Ma. The selling price was not disclosed.
Suzhou Kintor Pharma announced a global partnership with Predicine, a US-China diagnostics company, using Predicine's GeneRADAR, a ctRNA + ctDNA liquid biopsy. Predicine will develop biomarkers for Kintor's oncology drugs. Over the past two years, Kintor and Predicine have formed multiple collaborations to support China-US Phase I-III clinical trials of Kintor's lead candidate, proxalutamide, as a treatment for prostate and breast cancer. Predicine says GeneRADAR is the first liquid biopsy to test both circulating RNA and DNA. Terms of the agreement were not disclosed.
Sanofi (NASDAQ:SNY) launched a $77 million Global R&D Operations Hub in Chengdu, which will focus on digitalization and big data analysis for clinical trials. The China R&D center will be the third pillar of Sanofi Global Clinical Sciences and Operations, joining facilities in France and the United States. The Hub will support clinical R&D of Sanofi's innovative drugs, managing global multi-center clinical trials data and files. In 2014, Sanofi announced an Asia-Pacific drug development R&D Center in Shanghai.
Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.