Week in Review: China IVD Makers Dominate M&A News

Deals and Financings

Fosun Pharma (HK: 02196) is planning to spin off and conduct a Hong Kong IPO of a subsidiary, medical device maker Yaneng Bioscience of Shenzhen (see story). Yaneng is known principally for making in-vitro diagnostic kits. All the information about the transaction is preliminary because, as yet, neither the Hong Kong Exchange or the company's own shareholders have approved the listing. However, the IPO could be a large one, because Yaneng recorded a net profit of $325 million in 2014.  

KHB Shanghai Kehua Bio-Engineering (SHZ: 2022), a major China IVD company, paid $31.5 million to acquire Technologenetics of Italy, also an IVD developer (see story). The acquired assets of Technologenetics were put into a Joint Venture, 80% owned by Kehua and the remaining 20% by another IVD company, Altergon Italia. Altergon will contribute its R&D site in Southern Italy and also its facilities in China (Qingdao and Shenzhen) for its share. Kenua's $31.5 million investment consists of $20.5 million for the acquisition and another $11 million to be invested in the JV over the next 18 months.

Company News

Samsung BioLogics of South Korea began construction this week of a $730 million biologics drug production facility in the Incheon Free Economic Zone, Korea (see story). The new plant is the company's third biologics facility, with a capacity of 180,000 liters. Together with Samsung's two existing facilities, the company will have a total capacity of 360,000 liters, which Samsung says would be the largest capacity for any biologics CMO in the world. All of Samsung's plants are compatible with western standards. 

SciClone Pharma (NSDQ: SCLN) will develop a treatment for oral mucositis for the Greater China market (see story). SciClone acquired China rights to the drug, SGX942, from Soligenix (OTC: SNGX) of the US in 2013 in exchange for SciClone's library of China clinical and regulatory data, produced by an oral mucositis treatment it abandoned. Last week, Solgenix reported positive Phase II data for SGX942 in a US trial, prompting SciClone to begin China development. SciClone is headquartered in California, but most of its operations are centered in China. 

Trials and Approvals

BeyondSpring Pharma, a New York City virtual immuno-oncology cancer company, received China approval to conduct a Phase III trial of its lead drug, plinabulin (see story). The China arm will be part of a global trial that expects enroll 550 subjects in the US, China, Australia and New Zealand. Plinabulin, which has an anti-angiogenesis mechanism, will be administered in combination with docetaxel in patients who have non-small cell lung cancer (NSCLC). Approval for the US arm of the trial was granted in July 2015. 

Disclosure: none.