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Week in Review: Fosun Eyeing $4 Billion Bid for Germany's Stada Pharma
publication date: Mar 11, 2017
author/source: Richard Daverman, PhD
Shanghai Fosun Pharma (SHA: 600196; HK: 2196) is said to be contemplating a bid for Germany's Stada Arzneimittel (DE: STAGn), a well established generic drug company (see story). Stada has already received $3.8 billion qualifying bids from two private equity companies, but bidding is expected to get serious over the next month. Stada predicted it would produce 2017 EBITDA of $470 million on revenues of $2.5 billion. To make its offer, Fosun may team up with CVC Capital Partners, a global PE firm headquartered in Luxembourg. Or, Fosun may make the bid alone and seek partners later.
BeiGene (NSDQ: BGNE) of Beijing is forming a $330 million JV, BeiGene Biologics, that will build a Guangzhou biologic drug manufacturing facility with Guangzhou GET Technology Development (see story). BeiGene will contribute $30 million to the JV, Guangzhou GET will invest $150 million in a combination of direct equity investment and a convertible shareholder loan, and the JV will raise another $150 million in commercial loans. Some of the funds may be used to support China biologic drug development. Construction of the new facility will begin this year.
BeyondSpring (NSDQ: BYSI), a New York City-China biopharma, completed a $54 million capital raise via a $3.5 million IPO and a $50.8 private placement, both at $20 per share (see story). The transactions value BeyondSpring at $434 million. The private placement was led by two China investment firms, Sangel Star Biomedical and HuaRong TianZe, who are affiliates of current BeyondSpring investors. BeyondSpring has one candidate, plinabulin, in a China clinical trial, as a treatment for non-small cell lung cancer and chemotherapy-induced neutropenia.
BOE Technology Group (SHZ: 000725), a Beijing company that is China's largest crystal display maker, invested $50 million in Israeli medical device company Cnoga Medical (see story). Cnoga produces devices that measure common vital signs optically, based on skin color changes in a person's fingertip. For its investment, BOE now owns a 24% stake in Cnoga (the transaction values Cnoga at $212 million) and has two board seats. The two companies will market Cnoga's products jointly in China, and Cnoga will develop a new line of products for professional use.
Frontline Bioventures, a China focused life science investor, has closed its second RMB fund, according to media reports (see story). Frontline has not disclosed the amount of funds raised, as seems to be its habit, but Founder and Managing Partner Leon Chen did tell BioCentury the firm's second RMB fund was twice as big as its first (also not disclosed). Further, he said the firm now has $435 million under management, including the two RMB funds and a US dollar fund. Frontline, headquartered in Shanghai, also has offices in Hong Kong, Suzhou and San Francisco.
Luqa Pharma of Shanghai signed a definitive agreement to acquire Arista Pharma (see story). Like Luqa, Arista in-licenses aesthetic products for China, including Aethoxysklerol®, an injected treatment for varicose veins that provides an alternative to surgery. Founded in 2010, Luqa is building a portfolio of aesthetic products, both OTC and prescription offerings, for the China market. Luqa did not disclose the transaction price for Arista.
Xynomic Pharma, a US-China oncology startup, has acquired Greater China rights to a novel ACAT-1 inhibitor for cancer indications from Resarci Therapeutics of West Lafayette, Indiana (see story). It will be tested as a treatment for prostate, pancreatic and other solid tumors. Xynomic will pay $1.2 million in upfront and milestone payments, plus royalties that could total $59 million. Two weeks ago, Xynomic announced it had acquired global rights to abexinostat, an HDAC inhibitor targeting hematological and solid tumor cancers. Xynomic also disclosed that it is close to in-licensing a potentially best-in-class BRAF inhibitor, targeting colorectal cancer and melanoma.
XW Labs, a three-year old novel drug R&D company based in Wuhan, China, in-licensed exclusive rights to a class of innovative compounds based on mitochondria targeted bis-nitroxide technology for CNS and oncology indications (see story). The technology was developed at the University of Pittsburgh in the laboratory of Professor Peter Wipf. In animal tests, the compounds showed efficacy in models of Huntington's Disease and traumatic brain injury. XW, which hopes to start clinical trials of the candidates by the end of 2017, did not disclose financial details.
Venus Medtech of Hangzhou partnered with Israel's Keystone Heart to provide Keystone's embolic protection device as part of Venus' transcatheter heart valve replacement device (see story). Keystone's TriGuard Cerebral Embolic Protection device is designed to prevent brain damage from embolisms during cardiovascular surgeries. The two companies say studies show that 80% of the minimally invasive transaortic valve replacement (TAVR) procedures cause "covert" brain damage. Venus has filed for China approval of its TAVR system. If approved, it would be the first TAVR available in China.
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