Week In Review: WuXi AppTec Files For $1 Billion+ Hong Kong IPO At $13 Billion Valuation

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Includes: CASI
by: ChinaBio Today

Deals and Financings

WuXi AppTec (SHA:603259) has filed for a Hong Kong IPO that is expected to raise at least $1 billion (see story). The company, China's largest CRO/CMO, completed a $354 million IPO on the Shanghai Exchange just over four months ago. Since then, its shares have nearly quadrupled, giving the company a market valuation of $13.1 billion. This is in addition to the $13.4 billion valuation of WuXi Biologics (OTCPK:WXXWY) (HK:2269), which IPO'd in Hong Kong one year ago. Three years ago, the company was privatized by its chairman, Ge Li, plus investors that included Ally Bridge Group and Hillhouse Capital.

Hillhouse Capital of Beijing closed its Hillhouse Fund IV with an oversubscribed $10.6 billion, a record for a private Asian fund. Hillhouse is a prominent life science investor, though it is equally involved in consumer technology and services. A global investor, its investments retain a focus on Asia companies. Hillhouse was founded in 2005 by Lei Zhang, who worked in Yale's endowment office while he was getting his master's degree. After he left the office, the endowment granted him $20 million in seed funding.

Changchun High & New Technology (SZ:000661) formed a $200 million China biosimilar JV with Alvotech, an Icelandic biotech (see story). Changchun will fund the JV with $100 million while Alvotech will contribute $10 million plus six drug licenses valued at $90 million. The permits to use these products will last for five years. Alvotech, founded in 2013, is a sister company to Alvogen, a US generic pharma. Alvogen is majority owned by CVC Capital Partners, an EU-Asian PE firm, and Temasek, the sovereign wealth fund of Singapore.

General Atlantic, a global growth equity firm, invested $150 million in Hong Kong Asia Medical Holding. Asia Holding provides cardiovascular healthcare services and operates hospitals under the name Asia Heart. Currently, the company operates two hospitals in Wuhan and Xinjiang. It also co-manages four heart centers including a new one in Hong Kong and another recently acquired center in Japan. The company will also open a second branch in Wuhan in November. Founded in 1999, Asia Heart offers heart surgeries and other cardiovascular services.

CASI Pharma (NASDAQ:CASI), a US-China company, announced a $48.5 private placement that will be used to in-license additional drugs and obtain approvals of its current portfolio of drug candidates (see story). In early 2018, CASI acquired global rights to a portfolio of 29 generic drugs from Sandoz with abbreviated ANDAs submitted in the US. CASI said it would choose some of the generics for China development. The company also has three drugs in-licensed from Spectrum that are currently in China trials. CASI is headquartered in Maryland with R&D operations in Beijing.

Ping An Global Voyager Fund invested $20 million in Israeli diagnostic company MeMed as part of MeMed's $70 million C round. MeMed has developed MeMed BV, a blood test that distinguishes between bacterial and viral infections based on analysis of three immune system components. MeMed will use the capital to market its MeMed BV test and to develop MeMed Key, a point-of-care protein measurement system, and other innovative immune system tests based on machine learning.

Shuwen Biotech of Hangzhou has launched a proprietary PD-L1 test kit, the first China company to offer a PD-L1 diagnostic, the company said. The kit is used to determine the expression levels of PD-L1 in tumor tissues. Shuwen said Hengrui Medicine used its kit in clinical trials of its PD-1 drug in patients with esophageal squamous cell carcinoma. The trial showed the PD-1 candidate produced a higher response rate in patients who were positive for PD-L1.

China Medical System (HK:0867) in-licensed China/Asian rights (excluding Japan) to a portfolio of oral cancer immunotherapy candidates developed by VAXIMM, a Swiss/German biotech. In return for the rights, CMS will participate in VAXIMM's Series B round, plus make milestone payments and pay royalties. Specific details were not disclosed. VAXIMM's candidates are based on an orally available bacterial vaccine strain, which is modified to stimulate patients' cytotoxic T-cells.

Digital China Health Technologies (HK:00861) will team up with Congenica, a UK company, to market Congenica's Sapientia™, a diagnostic decision support platform for genomics, to China hospitals. Congenica will develop a China-specific version of Sapientia, which will make the advances of genomics and personalized medicine available to clinicians. The company says its platform is particularly useful for diagnosing rare diseases. DCHealth is the healthcare subsidiary of Digital China Holdings, a major China IT provider.

Company News

Shuwen Biotech of Hangzhou has launched a proprietary PD-L1 test kit, the first China company to offer a PD-L1 diagnostic, the company said. The kit is used to determine the expression levels of PD-L1 in tumor tissues. Shuwen said Hengrui Medicine used its kit in clinical trials of its PD-1 drug in patients with esophageal squamous cell carcinoma. The trial showed the PD-1 candidate produced a higher response rate in patients who were positive for PD-L1.

Trials and Approvals

Innovent Biologics of Suzhou reported that its PD-1 candidate, sintilimab, produced a 68% objective response rate in first-line patients with non-squamous non-small cell lung cancer. Sintilimab was administered in combination with pemetrexed and cisplatin in the Phase I trial. Based on the data, Innovent said it would start a 378-patient Phase III trial of the drug in the same population. China's NMPA has already accepted Innovent's NDA filing for sintilimab under Priority Status rules as a treatment for classical Hodgkin's Lymphoma.

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