Deals and Financings
Eddingpharm, a Hong Kong-headquartered China in-licensing company, agreed to pay $375 million to acquire China rights for two off-patent antibiotics from Eli Lilly (NYSE:LLY) and the Suzhou factory that makes the antibiotics. Eddingpharm will pay $75 million upfront and $300 million when the deal closes, which is expected to be late 2019 or early 2020. The two antibiotics are Ceclor (cefaclor) and Vancocin (vancomycin). Lilly said the transaction will allow the company to concentrate on its core therapeutics areas.
Tencent Trusted Doctors, a China online/offline provider of medical services, raised $250 million in a round led by Tencent Holdings (OTCPK:TCEHY) (HK: 0700), Country Garden Holdings and Sequoia Capital. The funding was carried out at a $1 billion-plus valuation. In 2018, Tencent Trusted Doctors was formed by merging Tencent Doctorwork with Trusted Doctors. The merged company now operates nearly 50 clinics and connects 440,000 certified doctors with more than 10 million patients online. It plans to have more than 500 offline medical institutions in China by 2021.
WuXi AppTec (SHA: 603259; HK: 2359), China's largest CRO, will pay $46.4 million to acquire a 15% outstanding stake in its STA Pharma, WuXi's small molecule manufacturing division. In 2014, WuXi AppTec sold the shares to STA management and investors, and then listed STA on China's NEEQ, an over-the-counter exchange. It withdrew the listing last month. In 2017, WuXi AppTec merged STA into its small molecule R&D division so that clients would have a full complement of CRO/CDMO services available from a single company.
Sirnaomics, a US-China company developing RNAi therapeutics against cancer and fibrotic diseases, completed a $22 million C2 round from China investors, bringing the total C funding to $47 million. The C2 round was led by CR-CP Life Sciences Fund, a Hong Kong JV formed by China Resources and Charoen Pokphand Group, two Asian conglomerates. Sirnaomics will use the proceeds to support clinical trials of its RNAi candidates, while it advances its technology platforms. Sirnaomics is headquartered in Maryland with China operations in Suzhou and Guangzhou.
MicroPort, a Shanghai medical device company, co-led a $20 million Series C financing in Rapid Medical, an Israeli company developing a stentreiver treatment for stroke. As part of the agreement, MicroPort will partner with Rapid Medical to develop the treatment in China. Rapid Medical said it would use the funding to complete a US IDE study and support the commercial growth of the stroke treatment globally. The C round was co-led by JAM Capital Partners with participation from Agate JT, RocSon Medtech Fund and existing investors.
Adagene, a Suzhou-San Francisco antibody engineering and discovery company, has entered a drug discovery collaboration with Switzerland's ADC Therapeutics. Adagene will use its SAFEbody technology to generate a masked antibody for ADC that will be combined with ADC's cytotoxic payload technology, forming a novel ADC against an unspecified solid tumor target. ADC will underwrite Adagene's discovery work. After a successful discovery phase, Adagene will receive an upfront payment, milestones and royalties on net sales. Adagene will also have specified commercial rights to the molecule in Greater China.
Government and Regulatory
China has apparently negotiated a shorter patent protection period for new biologic drugs from the US, according to anonymous sources. New US biologics will have only eight years of protection under the new trade agreement, much shorter than the 12 years that is the rule in the US. The trade deal is still in negotiations, but US officials do not appear to be eager to fight for a longer exclusivity period. When pharma companies heard about the change, they complained. Reportedly, trade officials said the only alternative was no patent protection at all for new biologic drugs.
Gracell Biotechnologies, a Suzhou immune cell gene therapy company, announced a new technology, FasT CAR-T, that shortens the manufacturing time of CAR-T treatments from two weeks to one day. FasT CAR-T also lowers manufacturing costs to a fraction of previous CAR-T therapies, said Gracell, while showing higher potency of CD19-directed FasT CAR-T in B-Cell acute lymphoblastic leukemia (B-ALL) (20-40 times) and non-Hodgkin Lymphoma (NHL), both in vitro and in vivo.
Trials and Approvals
Innovent Biologics (Suzhou) (OTCPK:IVBIY) (HK: 01801) has dosed the first patient in a Phase I trial of a bispecific antibody that targets both PD-1 and PD-L1. According to Innovent, the candidate (IBI318) is the first PD-1/PDL1 bispecific to start clinical trials anywhere in the world. Innovent discovered and partnered IBI318 with Eli Lilly as part of their $1 billion agreement, announced in 2015. The China Phase I trial will test the candidate for safety, tolerability and initial efficacy in patients with advanced malignancies.
TaiGen Biotech (TWO: 4157), a Taipei infectious disease company, has started a China Phase III trial of a combination treatment for chronic hepatitis C. In 2016, TaiGen formed a $102 million JV with YiChang HEC ChangJiang (HK: 1558) to develop the oral dual-drug, direct-acting antiviral HCV treatment. TaiGen contributed China rights to furaprevir for a 49% stake in the JV, while HEC transferred China rights for yimitasvir, plus an undisclosed amount of cash, for 51% ownership. The companies expect to complete the Phase III trial in 2020.
Hua Medicine (HK: 2552) of Shanghai has started a US Phase I trial of its lead drug, dorzagliatin, a first-in-class oral glucokinase activator (GKA), in patients with type 2 diabetes not controlled by metformin, a DPP-4 inhibitor or a SGLT2 inhibitor. The trial will test the PK/PD of dorzagliatin together with empagliflozin, the Boehringer Ingelheim SGLT2 inhibitor known as Jardiance. The trial's endpoints are pharmacokinetic interaction between the two molecules, plus safety and tolerability of the combination.
Sinovac Biotech (NASDAQ:SVA) of Beijing reported its Sabin strain inactivated polio vaccine (sIPV) proved non-inferiority in China Phase III trials. Because the Sinovac vaccine does not contain any live virus, it is considered safer than its competition, oral polio vaccine (OPV) and inactivated polio vaccine (IPV). Two months ago, Sinovac instituted a poison pill plan against a group of investors with a 40% stake in the company. In 2018, outsiders contested Sinovac's management-led slate of directors. Both sides claimed victory, with the outcome being fought in suits and counter-suits, which continue.
Disclosure: ChinaBio has a business relationship with Gracell.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.