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Week In Review: Investor Group Bids $4.6 Billion To Acquire China Biologic

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Includes: CASI, CBPO, IVBIY, PNGAY, RHHBY, SHPMF
by: ChinaBio Today
Summary

China Biologic Products, a blood products company, received a $4.6 billion takeover offer from a group of six investment firms.

Shanghai Pharmaceuticals formed a JV with Russian biopharma Biocad that will include an initial investment of $250 million and is expected to lead to a $2.8 billion capitalization.

CASI, a US-China biopharma, reported China accepted its clinical trial application for its CD19 CAR-T candidate for review.

Deals and Financings

China Biologic Products (NASDAQ:CBPO), a blood products company, received a $4.6 billion takeover offer from a group of six investment firms (see story). The proposal was priced at $120 per share, a 16% premium to the previous close. CBPO operates plasma-gathering facilities (China limits the number of such facilities) and offers 20 plasma-based products. The company is priced at about 30 times trailing earnings. One year ago, CITIC made a $3.9 billion offer for CBPO, which was topped by a syndicate led by a former CEO of the company. CBPO rejected both bids.

Shanghai Henlius Pharma (HK:2696) raised $410 million in its Hong Kong IPO at a market cap of $2.9 billion, the low end of the range. The company is the majority-owned biologics subsidiary of Fosun Pharma (SHA:600196) (HK:2196). At the top end of the range, Henlius would have raised $477 million in its debut offering. Fosun and Henlius, a US company, formed the China biologics JV in 2010. In February, the company was approved for a China launch of a biosimilar to Roche's (OTCQX:RHHBY) Rituxan, a lymphoma treatment.

Shanghai Pharmaceuticals (OTCPK:SHPMF) (HK:2605) formed a JV with Russian biopharma Biocad that will include an initial investment of $250 million and is expected to lead to a $2.8 billion capitalization (see story). The JV will develop six Biocad monoclonal antibodies targeting cancer and autoimmune diseases for China's market, some of them novel drugs and the rest biosimilars. The initial $250 million investment will underwrite China clinical trials. Originally announced via an MOU signed last year, the partnership was formally inaugurated early this summer in a Moscow ceremony.

AllinMD Orthopedics Hospital of Beijing closed a $100 million Series B round to build its combination of orthopedic hospitals and internet medical care. The round was led by Sheares, a medical care fund of Singapore's sovereign wealth fund Temasek, and H Capital, a US venture capital firm. Tencent and Trustbridge Partners also participated. AllinMD will use the capital to increase the number of its physical hospitals while also expanding its online education services to more orthopedic doctors in China's smaller cities and rural areas.

China's Ping An Insurance Company (OTCPK:PNGAY) (HK:2318) (SHA:601318) led a $15 Million investment in Riverain Technologies, an Ohio company that develops AI imaging software (see story). Riverain's suite of patented ClearRead(TM) software tools are designed to improve a clinician's ability to detect cancer and other cell anomalies in thoracic CT and X-ray images. The software, which is already available in the US, is especially aimed at early detection of lung cancer. The investment will be used to bring ClearRead(TM) to global markets. Ping An's Global Voyager Fund made the investment.

Vision Medicals, a year-old metagenomics company focused on early detection of microbial pathogens, completed a $14 million A funding led by Volcanics Venture and CASH Capital. Based in Guangzhou, Vision's proprietary pathogenic nucleic acid enrichment technology, combined with high-throughput screening and CRISPR, discovers trace amounts of pathogens to identify them more quickly. Using big data, Vision has built two platforms, pathogen metagenomics platform IDseq™ and pathogen rapid diagnosis platform ID-CRISPR™.

Beijing's EdiGene raised $11 million in a Series pre-B2 financing to develop novel therapeutics based on gene editing following earlier $15 million and $10 million pre-B financings. In addition, EdiGene announced a research collaboration with a clinical stage biopharma that is developing novel off-the-shelf T-cell therapies for cancer. No further details of the partnership were disclosed. Participants in the latest funding are Series A lead investor IDG Capital and Series pre-B lead investor Lilly Asia Ventures.

Genecast (Beijing) Biotech, a cancer diagnostics company, partnered with Interpace Diagnostics of New Jersey to offer translational studies and clinical trial diagnostics to biopharma companies. According to the agreement, Interpace will offer the diagnostic products/services worldwide except in China, where Genecast will be responsible for them. Founded in 2014, Genecast has developed circulating tumor DNA (ctDNA) detection technology that provides individualized cancer diagnoses. In 2017, the company raised $18 million in a Series B round led by Tshinghua Holdings.

Company News

Covance, a global drug CRO, opened a new 12,000 square meter R&D center focused on clinical services in Shanghai's Zhangjiang Hi-Tech Park. The company claims the new center is the largest CRO facility in the Asia Pacific region. It offers clinical development and commercialization services, plus bioanalytical and central laboratory services. The new center is near Covance's other Shanghai facility, which focuses on Early Development services including safety assessment, metabolism and lead optimization. The company did not disclose the cost of its new R&D center.

Trials and Approvals

CASI (NASDAQ:CASI), a US-China biopharma, reported China accepted its clinical trial application for its CD19 CAR-T candidate for review. CNCT19 was originally developed by the Institute of Hematology, Chinese Academy of Medical Sciences. CASI acquired global rights to the candidate in June from Juventas Cell Therapy of Tianjin after a CASI subsidiary invested $11.6 million in Juventas. CASI expects CNCT19 will be at least as effective as western CD19 CAR-T therapies, but will cost less because it is manufactured in China by Juventas.

Shenzhen Chipscreen Biosciences (SHA:688321) announced its new drug application for a first-in-class type 2 diabetes treatment was accepted for review in China. Chiglitazar, a novel small molecule peroxisome proliferator-activated receptor (PPAR) α/γ/δ pan-agonist, acts as an insulin sensitizer. The first PPAR pan-agonist to complete Phase III clinical trials, chiglitazar showed durable efficacy in glycemic control for patients with T2DM and metabolic syndrome. In August, Chipscreen completed a $147 million IPO on the Shanghai STAR board and rose 367% in its first trading day.

Innovent Biologics (OTCPK:IVBIY) (HK:01801) of Suzhou said its Avastin (bevacizumab) biosimilar produced similar results to the original drug in a double blind Phase III trial. Both drugs were administered together with paclitaxel/carboplatin as a first-line treatment in patients with advanced non-small cell lung cancer (NSCLC). Innovent presented the data at the Chinese Society of Clinical Oncology (CSCO) earlier today. In late 2018, Innovent was approved to market its PD-1 drug, Tyvyt®, in China, the company's first launched product.

Industry Insights

According to a survey of 53 China-focused life science investors, 79% of the respondents believe the US is the current global leader in innovation for life science while only 15% picked China. But fast forward six years to expectations for 2025, the vote was split evenly between the two countries at about 48% each, a big turnaround. The data comes from an online survey conducted by Healthcare Drinks, an industry networking group that presented the survey results at its most recent event, which was held at the Harvard Business School Club of Shanghai earlier this month.

Disclosure: None

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