Week In Review: Hansoh's Hong Kong IPO To Raise Up To $1 Billion At $10 Billion Valuation

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Includes: BHHKF, BMY, MRK, PFE
by: ChinaBio Today
Summary

Benchmark Botanics of Vancouver, a Canada-licensed medical-grade cannabis company, signed a definitive agreement with Zhejiang Yatai Pharma to set up a Canadian JV to grow and market high cannabidiol cannabis products.

Pfizer Upjohn formally opened its new global headquarters in Shanghai, the first international headquarters of a multinational drug company located in China. Pfizer Upjohn is Pfizer's generic and off-patent drug unit.

Jiangsu Hengrui Medicine announced China regulators approved its PD-1 drug, camrelizumab, as a third-line treatment for recurrent or refractory classical Hodgkin's lymphoma. Two US-based companies have also entered China's PD-1/PD-L1 market - Merck with Keytruda (also for melanoma) and Bristol-Myers Squibb with Opdivo.

Deals and Financings

Jiangsu Hansoh Pharma, a generic/novel drug company headquartered in Lianyungang, Jiangsu province, has set the pricing range in an upcoming Hong Kong IPO slated to raise up to $1 billion at a $10 billion valuation. Hansoh has signed up nine cornerstone investors who will purchase $344 million of the IPO. A profitable company, Hansoh reported $1.1 billion in 2018 revenues and more than $280 million in profits, a 19% increase from the year earlier. At a $10 billion market cap, Hansoh would be priced at 36 times trailing earnings.

Hansoh Pharma will collaborate with Viela Bio of Gaithersburg, Maryland, to develop and commercialize inebilizumab in China in a $220 million agreement that includes upfront and milestone payments, plus royalties. Inebilizumab, Viola's humanized anti-CD19 mAb, produced positive data in US pivotal trials for neuromyelitis optica spectrum disorder, a CNS autoimmune disease. Viela believes the candidate will also prove effective against other inflammation/autoimmune and hematologic malignancy indications. Last month, Hansoh filed for a Hong Kong IPO that is expected to raise between $500 million and $1 billion.

Panacea Venture closed its initial fund, the Panacea Venture Healthcare Fund I, with an oversubscribed $180.5 million in capital commitments to fund early stage global healthcare investments with possible China connections. Panacea was formed by James Huang, Managing Partner, and Dr. Hai Mi, Managing Partner, who were both previously partners of Kleiner Perkins China. The General Partner of the fund is a newly-formed venture capital partnership that will seek investments in global healthcare companies that have a China advantage.

Alphamab Oncology of Suzhou closed a $60 million Series B led by Hudson Bay Capital Management to support its biologic oncology drug business. Using its experience in protein development, Alphamab is building a portfolio of multi-functional biologic therapies for cancer indications, including bispecific and mix-mAb platforms. The company will use the money for R&D and manufacturing facilities, clinical development of its pipeline and upcoming commercial launch of its lead candidate. In November 2018, Alphamab raised $130 million in a Series A financing.

New Horizon Health of Hangzhou completed a $66 million C round of financing that was led by VMS Group and included Legend Capital and Softbank China. Founded in 2013, New Horizon develops products that detect and screen for early stage cancers. So far, the company has launched diagnostic tests for intestinal and lung cancer. The C round brings New Horizon's total funding to over $100 million. New Health's $20 million A round was led by Qiming Venture with Legend Capital and Soft Bank also participating.

Harbour BioMed has signed a global multi-year license agreement with an unnamed top-ten immunology/immuno-oncology pharma to use Harbour's HCAb transgenic mouse platform to discover, develop and commercialize biologic therapeutics. The HCAb platform generates novel, fully human heavy chain only antibodies. Harbour says the platform will accelerate the discovery and development of single domain antibodies, bi-specific and multi-specific antibodies, and CAR-Ts. Harbour has R&D sites in Shanghai and Suzhou, business and research operations in Boston, and an antibody platform in Rotterdam.

Benchmark Botanics [CSE: BBT] (OTCPK:BHHKF) of Vancouver, a Canada-licensed medical-grade cannabis company, signed a definitive agreement with Zhejiang Yatai Pharma (SHZ: 002370) to set up a Canadian JV to grow and market high cannabidiol (CBD) cannabis products. The companies said Benchmark would contribute its cannabis growing and extraction experience with Yatai's drug R&D. The JV will have $10 million in capital, with Zhejiang Yatai contributing half. Ultimately, Benchmark wants to market medical cannabis and hemp in China and throughout Asia.

Trials and Approvals

Jiangsu Hengrui Medicine (SHA: 600276) announced China regulators approved its PD-1 drug, camrelizumab, as a third-line treatment for recurrent or refractory classical Hodgkin's lymphoma. Camrelizumab is the third domestic PD-1/PD-L1 drug approved in China; previously, Junshi's Tuoyi and Innovent's Tyvyx were granted marketing approvals. Two US-based companies have also entered China's PD-1/PD-L1 market - Merck (NYSE:MRK) with Keytruda (also for melanoma) and Bristol-Myers Squibb (NYSE:BMY) with Opdivo. Hengrui said it is testing camrelizumab in about 20 China clinical trials.

Sihuan Pharma (HK: 0460) of Beijing, China's largest cardio-cerebral vascular drug company, announced approval for China clinical trials of its third-gen EGFR inhibitor, XZP-5809, a Category 1 innovative drug. Sihuan said XZP-5809 is an oral drug with strong targeting ability, an innovative structure, an established mechanism and irreversible binding to EGFR. In pre-clinical tests, it demonstrated better selection with higher activity against gene-mutation EGFR and lower activity against wild-type EGFR, which Sihuan believes will result in a better safety profile.

Company News

Pfizer Upjohn formally opened its new global headquarters in Shanghai, the first international headquarters of a multinational drug company located in China. Pfizer Upjohn is Pfizer's (NYSE:PFE) generic and off-patent drug unit. Upjohn manufactures and markets 20 of Pfizer's post-patent protected and generic products. Last year, faced with losing patent protection on Lyrica, its anti-seizure drug, Pfizer reorganized into three units: Innovative Medicines (including biosimilars); a hospital business for anti-infectives and sterile injectables; and Pfizer Upjohn for off-patent branded and generic drugs for non-communicable diseases.

Disclosure: None

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