China Biotech In Review: A Week Of Big Deals

Includes: AGN, CTIC
by: ChinaBio Today

Deals and Financings

Watson Pharmaceuticals (WPI) of the US acquired privately held Actavis Group at a price of about $5.6 billion upfront, plus earn-out provisions based on 2012 results (see story). Both companies are large generic drug manufacturers, and together they will constitute the third biggest generic drug company in the world. Although neither company has a huge presence in China - only about 2% of Watson's revenues currently come from Asia - the acquisition will add to Watson's presence in both China and India.

Renhe Pharmacy, a company that makes OTC drug products including treatments for cold and flu, will spend 288 million RMB ($46 million) to acquire two smaller China drugmakers from their corporate parent, Jiangxi Yaodu Pharmacy Group.

Two Korean biopharmas, SK Biopharmaceuticals and Hanmi Pharm, announced a strategic partnership to bring an epilepsy drug to China and Korea. SK Biopharm developed the drug - the seizure control and muscle relaxant treatment diazepam, which is delivered by a nasal spray. Hanmi's China subsidiary will be in charge of obtaining SFDA approval for the drug and marketing it in China and Korea.

S*Bio, the Singapore-based pharma that is developing targeted small molecule drugs for cancer, sold the assets (including worldwide rights) surrounding its lead molecule to Cell Therapeutics of Seattle (NASDAQ:CTIC) (see story). Pacritinib is an oral JAK2 inhibitor that has completed Phase I and II trials for myelofibrosis. Cell Therapeutics will pay S*Bio $15 million in cash and issue $15 million of preferred shares that are convertible into Cell Therapeutics common stock.

Company News

Origin Agritech, a China company that develops hybrid and genetically modified crop seeds, has joined with Henan Agricultural University to establish the S. K. Wu Corn Research Institute. The focus of the institute will be corn genetics research, hybrid development and crop seed technologies. Origin was the first company in China to gain approval of a genetically modified corn seed, and last year, 74% of the company's revenue came from corn seed.

Disclosure: none.