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Week in Review: Gan & Lee to Raise $266 million in Shanghai IPO

publication date: Jun 18, 2016
 | 
author/source: Richard Daverman, PhD

Deals and Financings

Gan & Lee, China's largest domestic maker of insulin products, plans to stage a $226 million IPO in Shanghai (see story). China's security regulator has approved Gan & Lee's application. Founded in 1998, Gan & Lee produced China's first recombinant insulin, Gansulin®, which was followed in 2001 by the short-acting insulin analog Prandilin® (lispro), and then China's first long-acting insulin analog Basalin® (glargine) in 2002. Gan & Lee is the only China company to market all three generations of insulin-type products. Gan & Lee is headquartered in Beijing. 

Vivo Capital, a California-China healthcare investment firm, has closed an early stage healthcare VC fund, the Vivo PANDA Fund with more than $100 million (see story). Traditionally, Vivo has looked for later-stage investments. In 2015, Vivo closed its $750 million eighth fund, which focused on China revenue-stage life science companies. The new fund will invest in innovative healthcare companies, including pharmaceuticals, biotechnology, medical devices and diagnostics, with an eye toward building cross-border partnerships. Vivo now manages over $1.8 billion. 

The takeover battle for China health clinic operator iKang (NSDQ: KANG) is back on, according to an article in Caixin (see story). China Life Insurance is offering slightly more than $20 per share for iKang, the online business publication said. Previously China Life was bidding for iKang as part of a syndicate that included iKang's management and Yunfeng Capital, a private equity firm co-founded by Alibaba's (NYSE: BABA) Jack Ma. Two weeks ago, Yunfeng seemed to have won the fight by breaking away from the syndicate and offering $20-$25 per ADS on its own. The other two bidding groups backed away, rather than take on Yunfeng. 

Shenzhen Hepalink Pharma (SHZ: 002399), China's major heparin API company, will invest $60 million in TPG Biotechnology Partners V (see story). Two years ago, Hepalink put $22 million in TPG Biotechnology Partners IV. TPG, a US-headquartered firm known primarily as a PE specialist, invests in all stages of development in its biotech fund. It will pursue global opportunities in therapeutics, medical devices and healthcare services. 

Response Biomedical (TSX: RBM; OTC: RPBIF), a Vancouver-Shanghai IVD company, will be taken private by various OrbiMed funds and Shanghai Runda Medical Technology (SHA: 603108), also an IVD maker (see story). The purchase price is $11 million, a 51% premium to yesterday's closing quote.  Although Runda will expand Response's presence in the China market, the company will remain in Canada. OrbiMed and Runda will also inject $1 million into Response. OrbiMed Advisors, including OrbiMed Asia Partners, already owns 50.1% of Response through previous investments. 

Innovent Biologics, a fast-growing Suzhou biotech, has expanded its collaboration with Adimab, a mAb discovery company located in New Hampshire (see story). Using its proprietary yeast-based discovery program, Adimab will generate IgGs or bispecifics for multiple targets identified by Innovent. Innovent will develop the drug candidates and retain global rights to them. Last week, Innovent announced a $120 million partnership -- also for bispecifics -- with EpimAb Biotherapeutics, a Shanghai startup. Innovent will own global rights to these candidates as well, though EpimAb will share in revenues and income from out-licensings. 

Government and Regulatory

To encourage innovative drug development, China's State Council recently announced rules for a Marketing Authorization Holder pilot program: drug R&D institutions and individuals will now be able to apply for and hold CFDA approvals without having an in-house manufacturing capability (see story). Previously this was not possible. Without incurring the expense of building a manufacturing operation, drug R&D companies and institutions can develop drugs, engage a contract manufacturer, apply for approval and market the drugs. 

Company News

Humanwell Healthcare (SHA: 600079) of Wuhan, an integrated China pharma, will spend $80 million to build a manufacturing facility in Ethiopia (see story). Previously, Humanwell built a similar facility in Mali, a West African country. The new facility is located in Amhara, about 40 miles north of Addis Ababa. It will produce medicines in the forms of tablets, capsules, injections and liquids. Humanwell expects the plant will be operational in two years. 

Trials and Approvals

TaiGen Biotech (TWO: 4157), a Taiwan company with a Beijing subsidiary, received CFDA approval to market a novel antibiotic, Taigexyn® (nemonoxacin), in mainland China (see story). The antibiotic showed activity against drug-resistant bacterial strains. TaiGen said Taigexyn is the first Class 1.1 new drug developed by a Taiwanese company approved for China use and also the first new drug approved after the CFDA required companies to self-inspect clinical trial data in July 2015. In China, Taigexyn will be marketed by Zhejiang Medicine, which in-licensed rights to the antibiotic for $8 million upfront plus royalties and sales milestones. 

Disclosure: none.


 

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