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Week in Review: IHH Building $1 Billion of China Hospitals; Seeks Deals for More

publication date: Jun 17, 2017
 | 
author/source: Richard Daverman, PhD

Deals and Financings

Malaysia's IHH Healthcare, which recently opened the Gleneagles Hospital in Hong Kong, has plans to build three other hospitals on the mainland, with a total investment of $1 billion (see story). The company's three hospitals under construction are in Shanghai, Chengdu and Nanjing, and it hopes to expand its holdings further. Capital isn't a problem, IHH says, because the company has financial backing from Beijing-based Taikang Insurance Group. IHH claims to be the world's second largest hospital operator by market capitalization and the largest private hospital operator in China. 

Australia's CSL Limited (ASX: CSL; USOTC: CSLLY) will pay $352 million to acquire an 80% controlling stake in Wuhan Zhong Yuan Rui De Biological Products (Ruide) from China's Humanwell Healthcare Group (SHA: 600079) (see story). For 20 years, CSL has been supplying Ruide with albumin, the plasma that contains red blood cells. CSL also has the right to buy the remaining 20% of Ruide for $120 million in three years. Over time, CSL plans to move directly into the China plasma fractionation market, including plasma collection, with a complete portfolio of products. 

In its first day of trading on the Hong Kong Exchange, WuXi Biologics (HK: 2269) rose 37%, showing that the newly listed company continues to attract heavy investor following its IPO (see story). The open market trading increased the company's market capitalization to $4.1 billion. Last week, WuXi Biologics raised $511 million in an IPO that was heavily oversubscribed. The company comprises the biologic CRO/CMO operations of well-known WuXi AppTec, which continues to be privately held. Headquartered in Wuxi city, Wuxi Biologics has facilities in Wuxi, Shanghai and Suzhou.  

Athenex (NSDQ: ATNX), a US-China cancer biopharma, completed a $66 million IPO on the NASDAQ exchange (see story). Although that was the low end of the expected range, the company's shares have climbed 24% since they began trading. Athenex is developing a two-drug combination that would allow oral administration of common IV chemotherapies. The company is based in Buffalo, New York. It has partnered with New York State officials to build facilities there and with Chongqing to build a China manufacturing plant. It also has an R&D lab in Hong Kong. 

BeauCare Clinics, a Beijing aesthetic surgery clinic chain, raised $29 million in a Series B funding from GP Capital of Shanghai, which is backed by state-owned Shanghai International Group (see story). In 2015 GP Capital closed a dedicated healthcare fund with $101 million in capital. Founded in 2013, BeauCare Clinics currently operates more than 30 plastic surgery and beauty clinics in ten cities across China. It plans to have over 50 clinics operating by the end of this year. 

Evasc Neurovascular of Vancouver closed a $7.5 million Series A venture round, led by Yonghua Capital of Shanghai (see story). Evasc is developing a patented aneurysm treatment device, called eCLIPs, that Evasc believes will prove to be effective in 95% of all aneurysm cases. So far, the device has been implanted in 40 patients. The latest round, which includes participation from several of Evasc's existing investors, brings Evasc's total funding raised to date to $21 million.  

Lee's Pharm (HK: 0950) of Hong Kong will develop and market KL4 surfactant therapies for respiratory diseases, primarily for infants, in select Asian countries for Windtree Therapeutics (OTCQB: WINT) of the US (see story). Anticipating the agreement, Lee's previously invested $2 million in Windtree's private placement, and it will pay a $1 million upfront fee. The agreement also includes $37.5 million in potential milestones, plus royalties. Lee's will be responsible for development in the territories, and it has the right to manufacture non-aerosol KL4 surfactant for use in Asia. 

Venus Medtech of Hangzhou has acquired InterValve, a US maker of transcatheter aortic valve devices, the V8 and TAV8 (see story). Venus described the products as the world's pioneering aortic valvuloplasty balloon catheters with anatomical shapes. Balloon aortic valvuloplasty products widen a stenotic aortic valve using a balloon catheter inside the valve. The terms of the agreement were not disclosed. In April of this year, Venus's VenusA-Valve was approved by the CFDA, the first TAVR device approved for use in China. 

Sihuan Pharma (HK: 0460) formed a JV with Austria's Croma-Pharma to distribute Croma-Pharma's aesthetics products in China (see story). Initially, the JV, SunCro Aesthetics & Cosmetic International, will market Princess VOLUME, an intradermal filler. Croma-Pharma will contribute China rights to the product, and Sihuan will add its marketing expertise. Further details of the agreement were not disclosed. Sihuan, known for its cardio-cerebral vascular portfolio, has expanded to develop novel cancer treatments and has now added an interest in aesthetic products as well. 

Trials and Approvals

ACEA Biosciences, a San Diego-Hangzhou company, has completed a successful Phase I trial of a novel irreversible Bruton’s Tyrosine Kinase (BTK) inhibitor (see story). ACEA makes and markets innovative tools for cell-based assays that examine the effects of drugs on target cells. Using its products and an expertise in covalent tyrosine kinase inhibitors, ACEA has multiple clinical stage programs in the US and China. Its BTK inhibitor, AC0058, is aimed at B cell-related autoimmune diseases, including rheumatoid arthritis and systemic lupus erythematosus. In the Phase I trial, healthy volunteers were given ascending doses of AC0058 without reaching the maximum tolerated dose. 

Hutchison China MediTech (Chi-Med) (AIM/NSDQ: HCM) announced the CFDA accepted the company's New Drug Application for its lead drug, the cancer treatment fruquintinib (see story). In its China Phase III trial, fruquintinib increased survival by 41% in patients with advanced colorectal cancer. Chi-Med reported the data at the ASCO meeting in the US two weeks ago.  The company said the acceptance triggers a milestone payment of $4.5 million from Lilly (NYSE: LLY), its partner for the drug in China. 

Disclosure: none.


 

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