Deals and Financings

Hutchison China MediTech (Chi-Med) (AIM: HCM), a company developing novel drugs for oncology and autoimmune diseases, is scheduled to raise $100 million by listing ADS shares on the NASDAQ exchange (see story). The offering values Chi-Med at $1.9 billion. Each ADS will be equal to one-half of each London-traded Chi-Med share. Chi-Med will issue 6.1 million ADSs at a price to be determined by demand, though it will probably be close to one-half the present London ADS value, or $16.33 each. The underwriters have the option of placing another $15 million of stock to cover overallotments. The transaction is scheduled to take place the week of March 14th. 

Meinian Onehealth Healthcare, a Shanghai provider of China medical exams and disease screening, will pay $415 million to acquire the remaining 72% of a rival, Ciming Health Checkup Management (see story). In January 2015, Meinian purchased its original 28% stake in Ciming, though it did not disclose the price. Meinian said it would issue new shares to finance the acquisition. Still pending is the contentious battle for iKang Healthcare (NSDQ: KANG), another China provider of medical examinations. iKang's management has offered $17.80 per ADS to take the company private, while Meinian is offering $25 per ADS, a 40% increase and a $1.5 billion valuation. 

Two affiliated China investors, Tianyi Lummy International and China BioPharma Capital, participated in a $60 million financing of North Carolina's Argos Therapeutics (NSDQ: ARGS) (see story). One year ago, the two China companies agreed to a $40 million investment in Argos that included Lummy Pharma's acquisition of China rights to Argos' immunotherapy cancer treatment, Arcelis™. Argos said the latest capital raise will fund the company for 15 months, long enough to complete a Phase III trial of Arcelis. 

Haisco Pharma (SHZ: 002653) secured China rights to a novel treatment for chronic wounds developed by Microbion, a US-Canada biopharma (see story). To gain the rights, Haisco made an investment of undisclosed size in Microbion. The drug, MBN-101, is a clinical-stage product in the bismuth-thiol class aimed at treating resistant and difficult-to-treat infections, including biofilms. Haisco will be responsible for China regulatory work and commercialization of MBN-101. 

Government and Regulatory

China is working to negotiate discounts of at least 50% on several expensive western drugs, and then plans to include the drugs in the country's national insurance plan (see story). China's National Health and Family Planning Commission (NHFPC) is running the pilot program on five of the world's high-priced drugs. Considering that the drugs will be available to the large number of people insured by China's state-run insurance plans, the agreement could be a net positive for western biopharmas. 

Company News

Bristol-Myers Squibb (NYSE: BMY) has decided to stop direct-to-doctor sales support activities in China (see story). The company will no longer pay speaker's fees at conferences, entertain doctors with food and drink, or support physician meetings (including attendance by individuals) in China. In October 2015, BMY paid a $14 million fine in the US for providing cash incentives and gifts to promote China sales, though the company did not admit guilt in the matter. 

Trials and Approvals

Roche (SIX: RO, ROG) has been granted CFDA approval for its CINtec® PLUS Cytology test, which detects pre-cancerous cervical disease (see story). In a China study, the CINtec Plus test was more effective than conventional screening tools such as the Pap smear for selecting the patients with the greatest risk of developing cervical cancer. Roche's Diagnostic Division is a major part of its China operation, and the CINtec Plus test joins Roche's other cervical cancer diagnostics -- the cobas® HPV Test for screening, CINtec® PLUS Cytology and CINtec® Histology for triage and diagnosis -- in women's health. 

BeiGene (NSDQ: BGNE), a Beijing novel oncology drug development company, received CFDA approval of its Clinical Trial Application for BGB-3111, a BTK inhibitor intended to treat B-cell malignancies (see story). Previously, BeiGene has begun trials of the molecule in Australia and the US. BeiGene believes BGB-3111 is more selective than AbbVie's (NYSE: ABBV) Imbruvica (ibrutinib), which is expected to generate $1 billion of revenue this year. In December, BeiGene reported positive early results from the Australian trial of BGB-3111. 

3SBio (HK: 1530) of Shenyang was approved to begin China trials of its in-licensed product PEG-irinotecan, a long-acting chemotherapy (see story). The drug is a polymer-drug conjugate that inhibits topoisomerase I, which is over-expressed in many solid tumors. 3SBio intends to develop PEG-irinotecan as a China Class I drug for relapsed or refractory cancers, including colorectal, metastatic breast and platinum-resistant ovarian cancers. 3SBio in-licensed the drug from China's JenKem Technology in 2014. 

Disclosure: none.