Deals and Financings

China Metallurgical Group signed a $531 million deal with the Kuwait Health Assurance Company (KHAC) to build two hospitals with a 600 bed capacity in Kuwait (see story). The hospitals will serve Kuwait's expatriates, who constitute over 70% of the country's population. For Kuwait natives, healthcare is free, but foreigners are required to buy insurance. Currently, the two groups share facilities, but the system is overburdened with expatriates. 

CSPC Pharma (HK: 1093) of Shijiazhuang announced two out-licensings from its generic drug portfolio that will bring in up to $201 million in milestones plus royalties (see story). Through its subsidiary, CSPC Zhongqi Pharma, CSPC out-licensed US and EU rights for a development-stage complex injectible generic antibiotic to Teva Pharma (NYSE: TEVA) for $100 million, and it licensed US rights for a complex generic oncology to Citron Pharma of New Jersey for $101 million in milestones. CSPC already sells the oncology product in China. 

Tianjin Pharma Group closed its $20 million investment in Neuralstem (NSDQ: CUR), a US-China biopharma (see story), a transaction originally announced in September. Neuralstem, which had a market capitalization of $30 million before the transaction, has several central nervous system drug candidates in clinical development, based on its neural stem cell technology. Tianjin said it anticipates forming partnerships with Neuralstem in the future, presumably for China rights to candidates, though no specific deals were disclosed. If Tianjin exercises its conversion rights, it would own 40% of Neuralstem. 

WuXi PharmaTech participated in the $7 million A round of ApoGen Biotechnologies, a Seattle startup targeting drug resistance in cancer cells (see story). ApoGen is focusing on an antiviral component of the human innate immune system – the APOBEC cytidine deaminases – which are enzymes that are implicated in tumor mutations and lead to drug resistance. ApoGen was formed by the Accelerator Corporation of Seattle and New York, a 13-year-old incubator for drug development companies. 

PegBio Company, a Suzhou diabetes-focused pharma, partnered with Pfizer (NYSE: PFE) to bring a Pfizer clinical-stage type 2 diabetes treatment to China (see story). The candidate seems to be PF-04937319, a glucokinase inhibitor that Pfizer designed to be only partially effective as a way of avoiding the hypoglycemic side effect of other GCK drugs. PF-04937319 has completed a Phase IIa trial in the US. Neither company has issued a press release offering details about the deal, though PegBio did affirm that an agreement had been signed. 

Company News

Medtronic (NYSE: MDT) paid a $17.2 million fine in China for price fixing (see story). China's National Development and Reform Commission said the medical device maker company, now headquartered in Ireland, set a minimum price with its China distributors for certain cardiovascular and diabetes devices. Although the practice is legal in many parts of the world, China forbids a minimum price because it prevents price competition. Medtronic's China revenues were $1.5 billion last year, about 7.5% of the company's total revenues. 

Disclosure: none.