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2022 China Life Science Deals: Slow Start, Late Recovery; Top 10 Deals Worth $21.5 Billion
2022 China Biopharma deal activity was certainly slower than last year, but the ten largest deals, many of them booked in the second half of the year, totaled a decent $21.5 billion by themselves (see story). Most spectacular were the three Kelun-Biotech out-licensing pacts with US-based Merck worth $11.8 billion, including a huge $9.5 billion December agreement.
In addition, China life science venture capitalists got busy during the summer months, announcing a total of $12 billion in new funds from four well-known firms for future investments.
The 2022 deal flow may have declined from 2021, but the year was not a bust.
Below, we list 2022’s ten largest China biopharma deals and the four biggest venture raises for life science.
10 Top 2022 Biopharma Deals Led By a Trio of Kelun-Biotech Deals Worth $11.8 Billion
Kelun-Biotech Signs $9.5 Billion Deal with Merck for Seven ADC Candidate
Sichuan Kelun-Biotech will partner seven antibody-drug conjugate assets with Merck in a deal that pays Kelun-Biotech $175 million upfront and up to $9.3 billion in milestones. It is the third ADC deal between the two companies this year. In May, Kelun-Biotech out-licensed a TROP-2 ADC for $1.3 billion ($47 million upfront) and then, two months later, sold rights for two ADCs in a $936 million deal ($35 million upfront). Altogether, that totals around $12.7 billion overall with $257 million upfront. Also, Merck made an investment of undisclosed size in Kelun-Biotech as part of the latest agreement. The seven assets in today’s deal are all preclinical stage ADCs that target cancer.
Kelun-Biotech Out-Licenses Second ADC Candidate to MSD in $936 Million Deal
Kelun-Biotech out-licensed global rights to an ADC candidate aimed at solid tumors to MSD (Merck) in a deal worth up to $936 million. No further details about the candidate were released. It is the second partnership between the two companies. Earlier this year, MSD acquired worldwide rights (ex-China) to Kelun-Biotech’s TROP2 ADC in a $1.4 billion deal ($45 million upfront). The TROP2 candidate is in Phase III trials for metastatic triple-negative breast cancer and in Phase II trials for non-small cell lung cancer and advanced solid tumors. Kelun-Biotech is a subsidiary of subsidiary of Sichuan Kelun Pharma.
Kelun Out-Licenses Global Rights for Candidate to Merck/MSD in $1.4 Billion Deal
Kelun-Biotech out-licensed global rights (ex-China) for a large molecule candidate to Merck in a deal worth nearly $1.4 billion. Kelun will receive $47 million in upfront payments and up to $1.36 billion in milestones. Although the candidate was not identified, it is expected to be SKB264, a third-gen TROP2-targeting antibody-drug conjugate in Phase II trials in the US and China. The candidate is being developed by KLUS Pharma, Kelun-Biotech’s New Jersey-based novel drug developing subsidiary. Merck, known as MSD outside of North America, will develop and commercialize the oncology candidate it its territories.
Akeso Out-licenses ex-China Rights for PD-1/VEGF to Summit in $5 Billion Deal
In a blockbuster agreement, Guangzhou’s Akeso out-licensed ex-China rights to its bispecific PD-1/VEGF candidate in a deal worth up to $5 billion. Summit Therapeutics (NSDQ: SMMT) of Menlo Park, CA will pay $500 million upfront and up to $4.5 billion in milestones, plus single digit royalties for rights to develop ivonescimab in the US, Canada, Europe and Japan. Akeso, which is developing ivonescimab in Phase III trials for various lung cancer indications, believes its candidate is the most advanced PD-1/VEGF candidate in the world.
Insilico Announces Six-Drug, $1.2 Billion AI Drug Discovery Deal with Sanofi
Insilico Medicine, a Hong Kong-New York City AI drug discovery company, signed a six-drug research collaboration with Sanofi that could be worth up to $1.2 billion. Insilico will receive up to $21.5 million in upfront and target nomination fees for each of the six targets. It will also be eligible for milestone and royalty payments. Insilico will apply its end-to-end Pharma.AI platform to the Sanofi targets, including interdisciplinary drug discovery scientists who will advance lead therapeutic compounds up to candidate development stage.
Huadong Strikes $1 Billion Deal for Asia Rights to Four ADC Candidates
Huadong Medicine will acquire Asia rights (ex-Japan) for two Heidelberg Pharma ADC candidates with options on two more in a deal potentially worth more than $1 billion. The drug rights are worth up to $930 million while Huadong will also purchase $118 million of Heidelberg share rights and stock for a 35% stake in the company. Huadong, which will make a $20 million upfront payment to Heidelberg, is very busy on the deal front currently: last week it entered a $662 million agreement to develop two Kiniksa Pharma anti-inflammatory drug candidates in Southeast Asia.
Fosun Licenses US Rights to PD-1 from Henlius in $840 Million Deal
Shanghai Fosun Pharma announced it has licensed US rights to a PD-1 candidate from its longstanding partner, Henlius Biotech, in an $840 million agreement. Although Fosun is Henlius’s controlling shareholder, Henlius declared it was looking for a US partner as recently as three months ago. Despite their relationship, Henlius negotiated an enviable contract with Fosun, consisting of a $140 million upfront payment, a one-time $50 million regulatory milestone payment and up to $650 million in sales milestones, plus royalties. The PD-1, serplulimab, was the thirteenth PD-1/L1 inhibitor approved in China.
Jemincare Out-Licenses Prostate Cancer Candidate to Genentech for $650 Million
Nanchang Jemincare out-licensed global rights for its prostate cancer candidate to Genentech in a $650 million deal. The androgen receptor degrader, JMKX002992, is aimed at patients who are resistant to existing therapies. Genentech will pay $60 million upfront, $590 million in milestones, royalties on sales, and it will be responsible for development costs. Four years ago, Jemincare started developing novel drugs and now has a portfolio of eight biotech and 16 small molecule candidates. Previously, it announced two other out-licensings from its portfolio. Genentech is a subsidiary of Switzerland’s Roche.
Simcere Out-Licenses Autoimmune Candidate to Almirall in $507 Million Deal
Simcere Pharma of Nanjing announced a $507 million out-licensing to Spain’s Almirall for ex-China rights to a biologic autoimmune candidate. SIM0278 in an IND-ready interleukin 2 mutant fusion protein (IL-2 mu-Fc) that activates regulatory T cells developed by Simcere's protein engineering platform. Almirall, a dermatology biopharma, will make a $15 million upfront payment to Simcere and up to $492 million in milestones, plus royalties. Almirall will have rights for all indications outside of Greater China. For Almirall, the drug may prove to be useful in treating skin diseases, including psoriasis, atopic dermatitis and alopecia areata.
METiS Acquires Rights to Pan-RAF Inhibitor in $482 Million Agreement
METiS Therapeutics, a Boston-Shanghai AI company, in-licensed global rights to a pan-RAF inhibitor program from Korea’s Voronoi in a deal worth up to $482 million. METiS will pay only $1.7 million upfront, with provision for $480.5 million in milestone payments, plus royalties. In December 2021, METiS completed a $86 million Series A funding, exclusively from China investors. In May, the company joined the Shanghai Roche Accelerator, the first AI drug discovery company at the Accelerator. METiS will apply its AI and machine learning platforms to develop the Voronoi pan-RAF inhibitor.
China’s Life Science Venture Capital Funds Raise $12 Billion in New Funds
Sequoia Raises $9 Billion for Healthcare/Tech Investments in China
New investments in China life science may have declined over the last year, but large investment companies continue to raise large sums to invest, apparently convinced the current slowdown won’t last for long. According to unofficial sources, Sequoia China has raised about $9 billion to make investments in China’s healthcare and tech companies, above its $8 billion target. Investors would have raised the total by 50%, but Sequoia allowed only a $1 billion increase over their goals. So far, Sequoia has declined to comment on the news, which was unofficially leaked to The Information.
Qiming Raises $3.2 Billion in Capital for New China Technology/Healthcare Investments
Qiming Venture Partners closed two new China technology and healthcare funds with $3.2 billion in fresh capital, both of them at their hard cap limits. The USD Fund VIII has $2.5 billion and the first round of RMB Fund VII closed at RMB 4.7 billion ($700 million). With the new funds, Qiming has raised $9.4 billion in 18 funds over its history. Qiming promised to stick to its usual investment plan of supporting early and growth stage Technology and Consumer (T&C) and Healthcare investments. Since being founded in 2006, Qiming has backed over 480 companies, which include 70 that have unicorn status and 180 with exits via IPO, M&A or other means.
What Biopharma Slowdown? OrbiMed Raising $1.1 Billion for Asia Companies; $4.75 Billion for Three Funds
One year after raising $3.5 billion for three funds in 2021, OrbiMed, the world’s largest healthcare-dedicated investor, is back with plans for $4.75 billion in new funds, despite the slowdown in biopharma exits over the past year. OrbiMed Asia V plans to raise $1.1 billion, OrbiMed Flagship IX seeks $1.9 billion and OrbiMed Royalty & Credit Opportunities $1.75 billion. Before the new rounds, OrbiMed already had $15 billion in assets under management that was spread over 500 healthcare companies.
Vivo Capital Closes First Tranche of China Fund at $600 Million; Aiming for $1.5 Billion
Vivo Capital, a US-China healthcare investor, held its first closing of a yuan-denominated private equity fund at 4 billion yuan ($600 million), with a target of bringing the fund to 10 billion yuan ($1.5 billion). Vivo has three types of funds: Private Equity, Public Equity and Venture Capital. In 2019, Vivo closed its $1.3 billion ninth fund, bringing assets under management to $6.4 billion. Although investment firms are announcing fewer deals with China biopharma companies in 2022, major life science investors are continuing to raise money for new funds. Besides Vivo, OrbiMed announced three new funds one month ago with $4.75 billion of capital, including $1.1 billion for OrbiMed Asia V.
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