Week In Review: 2018 Results - China Life Science Investment Hits Record Levels

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Includes: ATNX, NVCR, ZLAB
by: ChinaBio Today
Summary

Investments in China life science set new records in all categories during 2018, reflecting the increasing development of the industry.

Athenex, a US-China company, out-licensed China commercialization rights for KX2-391, an actinic keratosis/oncology treatment, to Chongqing Jingdong Junzhuo Pharma.

Zai Lab has launched its electric fields treatment for glioblastoma multiforme (GBM) in Hong Kong.

Industry Insights

Investments in China life science set new records in all categories during 2018, reflecting the increasing development of the industry. And these numbers are spectacular even in comparison to an already strong 2017. Here are the numbers for 2018:

  • $43 billion raised for new VC/PE funds targeting China life science investments, with average fund size increasing to $765 million;
  • $17 billion invested in China life science companies, up 36% from 2017, with another $8 billion in corporate investments;
  • $34 billion in value created in M&A deals, 53% higher than 2017, with average deal value exceeding $200 million;
  • $7 billion in IPO funding, an increase of 40%, with an average raise of over $250 million; and
  • $14 billion in partnering activity, up 75% from $8 billion in 2017.

Deals and Financings

Beijing InnoCare Pharma announced it completed a $160 million financing to advance its portfolio of novel treatments for cancer and autoimmune diseases. In February 2018, InnoCare raised $55 million in a funding led by Vivo Capital. The company uses internal R&D, in-licensings and international collaborations to develop first-in-class and/or best-in-class drugs. It has three cancer candidates in clinical trials, including several tests for its BTK inhibitor. The latest investment round was led by Loyal Valley Capital.

Antengene, an innovative Shanghai biopharma, has completed a $120 million Series B financing led by Boyu Capital and FountainVest. The company intends to use the financing to fund China clinical trials of its in-licensed lead programs, ATG-008 and ATG-010 (selinexor), and other clinical-stage assets. It will also expand its pipeline through internal R&D and external partnerships as it prepares for commercial operations. In 2017, Antegene raised $21 million in an A round led by Qiming Venture.

HJB, a China based-bioprocessing specialist, will merge with MabSpace of Suzhou, a discovery/development biotech, to form Transcenta Holding. The new company will have a pipeline of 10 innovative molecules. It plans to use HJB's capabilities to shorten the timeline from target to BLA, using its next-gen Hangzhou GMP facility to support development of in-house and partnered molecules. Dr. Xueming Qian, former MabSpace Founder, Chairman and CEO, will be CEO of Transcenta, while Dr. Jonathan Yining Zhao, co-founder and CEO of HJB, will be its Executive Chairman. Financial details were not disclosed.

Betta Pharma (SZE:300558) of Hangzhou will pay up to $33.5 million in upfront and R&D milestones to in-license China rights for a third-generation EGFR inhibitor discovered by InventisBio (Shanghai). The two companies will co-develop the drug in China, but Betta will have exclusive commercialization rights. InventisBio is currently conducting a China Phase I trial of D-0316, a potential treatment for EGFR-mutant non-small cell lung cancer. Betta already offers China's best-selling product for EFGR mutant lung cancer, icotinib (Conmana®).

Athenex (NASDAQ:ATNX), a US-China company, out-licensed China commercialization rights for KX2-391, an actinic keratosis/oncology treatment, to Chongqing Jingdong Junzhuo Pharma (see story). Athenex will receive an upfront payment of $14.5 million and milestones of up to $15 million, plus tiered royalties starting at 15%. KX2-391 is a first-in-class dual Src kinase and tubulin polymerization inhibitor; KX2-391 ointment is a topical treatment for actinic keratosis in Phase III development. Athenex will be responsible for China development of the products; Jingdong will be in charge of commercialization.

Trials and Approvals

Zai Lab (NASDAQ:ZLAB) has launched its electric fields treatment for glioblastoma multiforme (GBM) in Hong Kong (see story). In September, Zai acquired greater China rights to Novocure's (NASDAQ:NVCR) Optune, paying $15 million upfront plus sales milestones. Optune is not yet approved for mainland China use. The product uses electric fields tuned to specific frequencies to disrupt cell division, inhibiting tumor growth and causing the death of affected cancer cells. Zai's in-licensed PARP inhibitor is also available in Hong Kong.

Ascletis Pharma (HK:1672) of Hangzhou reported that China's NMPA accepted its filing for an investigational new drug application (IND) of its third HCV drug, ASC21 (see story). Ascletis said ASC21 has shown potent, pan-genotypic anti-viral activity along with a high genetic barrier to resistance in in vitro studies. In mid-2018, Ascletis launched Ganovo® in China, the company's first approved innovative HCV treatment. Its second candidate, Ravidasvir, is currently under review by the NMPA. Because each of the three drugs has a different mechanism of action, Ascletis believes it will offer treatment for all varieties of HCV.

Disclosure: None

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.