Week In Review: Grifols Pays $1.9 Billion For 26% Stake In Shanghai RAAS

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Includes: BGNE, CASI, GRFS, NVO, TLC
by: ChinaBio Today
Summary

Grifols, a Barcelona maker of plasma-based medicines, acquired a 26% stake in Shanghai RAAS, one of China's largest blood plasma companies, for $1.9 billion in a non-cash deal.

Ambrx, a San Diego biopharma owned by four China investors, struck a deal worth up to $475 million with Beijing's BeiGene.

3SBio of Shenyang will pay $50 million upfront, plus milestones, for China rights to commercialize two liposomal products developed by Taiwan Liposome.

Deals and Financings

Grifols (MCE: GRF, GRFS), a Barcelona maker of plasma-based medicines, acquired a 26% stake in Shanghai RAAS (SHZ: 002252), one of China's largest blood plasma companies, for $1.9 billion in a non-cash deal. Grifols will exchange a 45% ownership in its US subsidiary, Grifols Diagnostic Solutions, for the Shanghai RAAS stake. As part of the agreement, Shanghai RAAS will become exclusive distributor of Grifols' plasma-based and diagnostic products in China, including Grifol's nucleic acid test (NAT) systems used to screen plasma donors for HIV and HCV.

Ambrx, a San Diego biopharma owned by four China investors, struck a deal worth up to $475 million with Beijing's BeiGene (BGNE; HK: 06160). In exchange for a $10 million upfront payment, Ambrx will use its Expanded Genetic Code technology platforms to discover next-gen protein drug candidates for BeiGene. For another $19 million, BeiGene can add additional targets. The agreement includes $446 million in milestones, plus it also requires BeiGene to pay royalties on revenues. In 2015, Ambrx was acquired by Fosun Pharma and WuXi AppTec, plus China equity investors HOPU and Everbright.

In a $220 million agreement, South Korea's ABL Biotechnologies (KS: 298380) acquired rights to use WuXi Biologics' (HK: 2269) discovery platforms to develop multiple bispecific antibodies including new bispecific antibodies that target a novel immune check point receptor. WuXi Biologics, which will receive the $220 million in a combination of upfront and milestone payments, will also be paid royalties on any commercialized products from the partnership. ABL Bio will use WuXi's WuXiBody and CD3 platforms. The new partnership expands an existing agreement between the two companies announced in November 2018.

3SBio (HK: 1530) of Shenyang will pay $50 million upfront, plus milestones, for China rights to commercialize two liposomal products developed by Taiwan Liposome (TLC, TWO: 4152). TLC used its NanoX platform to develop the candidates for oncology and severe infectious disease. 3SBio and TLC will cooperate to obtain regulatory approvals in China, while TLC will manufacture the products. According to TLC, its NanoX platform uses a lipid delivery system to lower toxicity, reduce the frequency of dosing, and distribute APIs more evenly.

Company News

Novo Nordisk (NYSE:NVO), a diabetes-focused multinational pharma, has launched INNOVO, a platform designed to promote China innovation by connecting Novo Nordisk with China academic institutions, biotech startups and incubators. The company aims to accelerate its scientific research through the relationships. Novo Nordisk has a long history in China. It set up a China office in 1994 and established an R&D center in Beijing in 1997, the first multinational biopharma to do so. The Novo Nordisk Research Center in China will be in charge of running INNOVO.

Trials and Approvals

CASI Pharmaceuticals (NASDAQ:CASI) reported it has been approved to begin a China registrational clinical trial of Marqibo, an in-licensed leukemia drug. CASI acquired China rights to Marqibo from Spectrum Pharma of the US. CASI will enroll adult patients with Philadelphia chromosome-negative (Ph‒) acute lymphoblastic leukemia (ALL) who have failed at least two prior treatments. CASI, which develops drugs for the China market, is headquartered in Maryland with a clinical study operation in Beijing.

I-Mab Biopharma of Suzhou has begun treating patients in a China Phase Ib/IIa clinical trial of TJ107 (HyLeukin), a long-acting Interleukin-7 fusion protein, in patients with advanced solid tumors. In 2017, I-Mab in-licensed China rights to HyLeukin from Genexine (KOSDAQ: 095700) in a deal worth up to $548 million. I-Mab intends to test HyLeukin, an immune system booster, as a monotherapy for cancer, a treatment for lymphopenia and an adjunct to its cancer immunotherapy candidates.

Government and Regulatory

China regulators have published the definitive set of rules governing IPOs on its new Shanghai High-Tech Board for young companies, which will be a direct competitor to Hong Kong's pre-revenue IPO channel. The new Shanghai IPO rules offer five sets of financial listing criteria, each one offering an alternative to China's requirement that companies must have two years of profit before they are allowed to IPO. For biopharma companies, the most attractive set of criteria does not require any income. Instead, a company must list at a valuation of at least $600 million and be approved for, at minimum, a Phase II trial in China.

Disclosure: None