Deals and Financings

Novartis (NYSE: NVS), a Swiss biopharma, invested $1 billion into an R&D center in Shanghai that will complement its other two major R&D hubs -- one in its Basel home and the other in Cambridge, Massachusetts (see story). Originally announced in 2009, the facility will house up to 1300 employees. In 2009, Novartis employed just 130 people in its China R&D operation. The new center will focus on treatments for diseases that are prevalent in China and Asia, such as gastric and liver cancer, HBV and hepatic fibrosis. Novartis felt it had to open the China center because of China's scientific talent, said CEO Joe Jimenez. "Not everyone wants to live in Basel," he added. 

Guangzhou LingSheng Pharma Tech (Link Health) in-licensed greater China rights to a cancer drug from Germany's 4SC AG (FSE: VSC) in a deal worth up to $84.7 million in upfront and milestone payments (see story). The drug, 4SC-205, inhibits Eg5, the kinesin spindle protein, which plays a key role in cell division. 4SC says 4SC-205 does not have the serious side effects of other Eg5 inhibitors. Link Health will be responsible for China clinical development and commercialization of 4SC-205, which has completed a Phase I trial. 

AccuraGen Holdings, a US-China cancer diagnostics company, closed a $40 million Series B financing (see story). AccuraGen develops blood tests that sequence cell free DNA (cfDNA) to provide sensitive and accurate cancer diagnostics. Its current product, which is undergoing clinical tests in China, is a 61-gene assay. Participants in the Series B include Junson Capital, Decheng Capital, Temasek investments, DT Capital, Stanford‐StartX Fund, and Nan Fung Capital, along with existing Series A investors. 

Sipai Wangluo, a two-year old Beijing oncology big data company, raised "tens of millions" of dollars in a Series B fundraising, according to China media reports (see story). Sipai Wangluo positions itself as a diagnostic support system and differentiates itself from other oncology big data efforts by stressing its doctor-centered design. The money was invested by Ping An Ventures and two Fidelity funds, Eight Roads Ventures (formerly Fidelity Growth Partners) and F-Prime Capital Partners (formerly Fidelity Biosciences). In January 2015, Sipai Wangluo raised $10 million in its Series A round from the same investors.

Industry Insights

 China is the top biopharma cluster of Asia's eight biotech-involved countries, according to a ranking by Genetic Engineering & Biotechnology News (GEN) (see story). In four out of GEN's five criteria, China placed first. In addition, the publication noted that China's 13th Five-Year Plan, which became effective this year, puts a priority on biopharma R&D. The Plan establishes a new competitive grant program to fund stem cell and translational research. It also encourages biopharma to expand development programs “to strengthen the prevention and cure of infectious, chronic, and endemic diseases.” Plus, China will make a big push in personalized medicine, spending as much as $9 billion over 15 years.

Government and Regulatory

China's National Development and Reform Commission (NDRC) formally announced an investigation into drug and medical device pricing among domestic and foreign firms (see story). The program is already underway: earlier this month Pfizer (NYSE: PFE) was summoned to the agency to discuss undisclosed pricing issues, though neither side has discussed anything about the conversation. The NDRC said it would look into unusual fluctuations in price, which no doubt implies a focus on upward movements. 

Company News

WuXi Biologics and Sartorius Stedim Biotech (EPA: DIM), a French company that makes biologic drug manufacturing equipment, opened a Joint Lab in Shanghai (see story). The lab includes microscale bioreactor systems used for early stage R&D and process optimization of biologic drug candidates, providing accelerated development, optimization and rapid scale-up of cell culture processes. SSB specializes in single-use reactors, and the company has a longstanding relationship with WuXi Biologics, a division of WuXi AppTec. 

Trials and Approvals

Lee's Pharm (HK: 0950) of Hong Kong and US-based RegeneRx (OTCQB: RGRX) will take advantage of new China regulations to accelerate development of a treatment for dry eye syndrome (see story). In April, the CFDA announced it would allow companies to use foreign-made drugs in Phase I and II clinical trials of domestically sponsored drugs. Accordingly, Lee's will use RegeneRx-supplied drugs for early stage testing, though Lee's will use its own China facilities to produce clinical trial supplies for Phase III. In 2012, Lee's in-licensed China rights to RGN-259 as part of a three-drug package. 

Disclosure: none.