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Week in Review: 3SBio Rises 5% After $711 Million IPO

publication date: Jun 13, 2015
 | 
author/source: Richard Daverman, PhD

Deals and Financings

3SBio (HK: 1530, a Shenyang biotech, rose 5% in its first day of trading in Hong Kong following the company's $711 million IPO (see story). Even though the IPO was priced at 43 times earnings, the IPO had no trouble attracting investors at the top of its range, and then moving higher in open market trading. CITIC Private Equity, which backed the company's privatization, pocketed $177 million of the proceeds, but the remaining $534 million will go to 3SBio, which promised to spend almost half of its new capital to add new products to its already extensive portfolio of development-stage products.

Huaren Pharmaceutical (SHZ: 300110), an IV drugmaker based in Qingdao, Shandong Province, will pay $550 million to acquire an investment company, Hongta Innovation Investment (see story). Hongta holds a 9.2% stake in Huaren, which was worth about $75 million at the time the deal was struck. The investment company's others assets were not disclosed. Huaren will pay for the transaction with $81 million of cash and the remainder in Huraen stock. 

China Resources Wandong Medical Equipment (SHA: 600055), a Beijing medical imaging company, raised $147 million in a private placement from seven investors, a group that included Alibaba's (NYSE: BABA) Jack Ma (see story). Yunfeng, the investment vehicle associated with Ma, invested $32 million in the financing for a 2.4% stake in Wandong. As part of the deal, Wandong will provide analyses of patients’ MRI and CT scans on Yidegu, Alibaba’s online healthcare platform. 

BioAtla LLC, a San Diego-Beijing biotech, raised $30 million in an equity investment from an undisclosed group of China investors (see story). The capital will be used to develop BioAtla's pipeline of Conditionally Active Biologic (CAB) antibody therapeutics. BioAtla characterized the transaction as a strategic investment that will further the company's plans to form collaborations with China companies. The collaborations will develop BioAtla therapies for the China market. The investor group has contacts in China, an important feature of the deal, said BioAtla.

The Pharma Partners, a US-China healthcare advisory firm, formed a partnership with Suzhou BioBAY and Legend Capital to help US and European life science companies with their China commercialization efforts (see story). TPP also agreed to raise $30 million from China investors to support four US companies owned by serial medical device innovator Amir Belson, MD. The capital will be used to gain approval of the companies' products in the US. In addition, TPP and its China MedTech partners will form JVs with Dr. Belson's companies to develop and commercialize their products in China.

Luqa Pharmaceuticals, a China in-licensing company that specializes in dermatolgy products, raised $15 million in a funding led by Morningside Ventures (see story). The proceeds will be used to expand and develop Luqa’s product range. Luqa, whose base is in Shanghai, launched its first product in 2013 and now markets nine products in China. It expects to launch three more before the end of the year. 

Phagelux, a Shanghai anti-bacterial company, announced a $10 million funding from existing and new institutional investors (see story). The company is developing anti-bacterial products for human and agricultural health using phage and phage-based technologies. Phages are potential alternatives to many uses of antibiotics, including drug-resistant bacteria strains. Phagelux said it is close to commercialization of its first marketed products. 

Annoroad Gene Technology, headquartered in Beijing's E-Town Biomedical Park, will work together with Illumina (NSDQ: ILMN) to develop a next-gen non-invasive prenatal DNA diagnostic test for the China market (see story). Annoroad will contribute its expertise with nucleic acid extraction, library preparation, and data analysis software, while Illumina will provide next generation sequencing instruments and related reagents. Their goal is to create a highly accurate, easy-to-use system.

Industry Insights

Innovation is on the rise in China's Biotech and Pharma sectors, according to a survey of patent filings and patent approvals conducted by Thomson Reuters (see story). Of all the institutions/ companies filing patents globally in 2014, China is home to three of the top five Biotech filing institutions and two of the top five Pharma filing entities. Globally, the number of filings/approvals climbed just 3% last year in all sectors. The Biotech and Pharma sectors, however, are much stronger than the overall average, and the difference seems to have been China's rising contribution. 

Trials and Approvals

Suzhou NeuPharma has begun a Phase I clinical trial of RX108 in Australia in patients with various solid tumor cancers (see story). RX108 is a novel small-molecule inhibitor of sodium-potassium adenosine triphosphatase (Na+/K+-ATPase), a building block for a multiple-protein signaling complex that helps to regulate cell growth, motility and proliferation. Founded in 2009, NeuPharma is developing several novel small molecule drug candidates for cancer and neurodegenerative disease. 

Disclosure: none.


 

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