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Week in Review: China Pharmas Announce Deals Worth $1.5 Billion

publication date: Dec 8, 2018
author/source: Richard Daverman, PhD

Deals and Financings 

WuXi AppTec (SHA: 603259), China's largest CRO/CMO, completed a $1 billion IPO on the Hong Kong markets, pricing the offering in the middle of the expected range (see story). In May, WuXi became a public company by completing a $328 million IPO in Shanghai. Since the offering, the company's shares have nearly quadrupled. The Hong Kong offering was completed at a $10 billion valuation, about a 16% discount to its valuation in Shanghai. In 2015, WuXi was privatized from the New York Exchange at a value of $3.3 billion.  

Shanghai Fosun Pharma (SHA: 600196; HK: 02196) in-licensed rights to a Revance (NSDQ: RVNC) neuromodulator for aesthetic and therapeutic use in an agreement potentially worth $260 million (see story). Fosun will pay $30 million upfront and up to $230 million in milestones, plus royalties. The first neuromodulator with long-acting duration, DaxibotulinumtoxinA (RT002) is also the first Botox-type product formulated without human blood-derived products or manufactured using animal-derived proteins.  

Brii Biosciences, a China-US startup, has entered a $128.5 million agreement for China rights to an immuno-therapeutic hepatitis B vaccine from VBI Vaccines (NSDQ: VBIV) of Cambridge, MA (see story). Brii made a $4 million upfront payment and an equity investment of $11 million in VBI, plus will pay up to $117.5 million in milestones. Brii made its debut earlier this year with $260 million in initial capital. It also announced options for China rights to four biotech infectious disease assets from Vir of San Francisco, including a hepatitis B vaccine.  

Shenzhen Salubris Pharma (SZE: 002294) invested $10 million in Viracta Therapeutics of San Diego (see story). Salubris also acquired greater China rights to Viracta's clinical-stage treatment for Epstein Barr Virus (EBV)-associated lymphomas in a deal that includes $58 million in development milestones, plus unspecified commercial milestones and tiered royalties. The treatment is the first targeted, oral therapy for EBV-associated malignancies. It combines Viracta’s nanatinostat (VRx-3996) plus an antiviral and may treat a range of cancers associated with viruses.  

Elpiscience, a Shanghai immunoncology company, closed a $35 million Series B round led by Hillhouse Capital (see story). Elpiscience has licensed technology from regional institutions and global partnerships to develop its pipeline, which now includes more than 10 molecules targeting novel pathways in cancer immunotherapy, including two assets that are ready for IND filing. In 2017, Elpiscience closed a $55 million Series A round that included Lilly Asia Ventures and CDH Investments.  

Germany's Fresenius Medical (D: FMEG), a global company that makes renal care products and operates dialysis clinics, announced several acquisitions that will extend its China network of dialysis clinics (see story). Fresenius claims to be the largest dialysis device maker and clinic operator in the world. It has been active in China since the early 1980s, operates four manufacturing sites in the country and is the market leader in parenteral nutrition, but Fresenius did not open its first China dialysis clinic until last year.

Immunochina, a Beijing biotech, will collaborate with Sartorius Stedim Biotech using SSB’s bioprocess technology platform to develop and manufacture Immunochina's CAR-T therapies (see story). Immunochina will provide technical feedback to SSB. Immunochina's lead program targets CD19 in B-Cell Acute Lymphoblastic Leukemia (B-ALL) and Non-Hodgkin's Lymphoma. In a B-ALL trial, the CAR-T candidate achieved a complete response rate of more than 90%. One year ago, Immunochina raised $7.5 million to support Phase II clinical trials of its CAR-T product.

Trials and Approvals 

Mundipharma China of Beijing and Helsinn, a Swiss pharma, announced China approval to market Aloxi® IV, a preventative treatment for nausea and vomiting caused by chemotherapy (see story). Aloxi is a 5-HT3 receptor antagonist. In 2017, Mundipharm acquired China rights to Aloxi and also Akynzeo®, a fixed dose oral combination anti-emetic from Helsinn. For Helsinn, the approval is its first product to be accepted in China, though it said Aloxi is "standard-of-care" in many global markets.  

Suzhou Innovent Biologics (HK: 01801) was approved to start US clinical trials of its recombinant fully human anti-OX40 mAb, which Innovent intends to test in patients with solid tumors (see story). IBI101, the third Innovent candidate to start US trials, targets the tumor necrosis factor receptor superfamily member 4. Eventually, the company plans to test IBI101 in combination with other immunotherapies, including its own PD-l candidate. At present, there are no approved OX40 mAbs, but based on pre-clinical data, Innovent believes IBI101 causes a larger T cell response than candidates from other companies. 

Legend Biotech of Nanjing reported positive data from a China Phase I/II trial of its CAR-T therapy in a heavily pre-treated population of multiple myeloma patients (see story). In a trial that enrolled 57 patients, LCAR-B38M produced a complete response in 74% of the patients and an overall response rate of 88%. In 2017, Legend stunned the world with an overall response rate of over 90% in a small initial trial. At the end of 2017, Janssen Pharma paid $350 million upfront to partner the drug with Legend. 

CASI Pharma (NSDQ: CASI), a US-China company, was granted approval to market melphalan hydrochloride for injection (Evomela®) in China for use as a multiple myeloma treatment (see story). The drug has two indications: a high-dose conditioning treatment prior to hematopoietic progenitor (stem) cell transplantation in patients with multiple myeloma, and palliative treatment of patients with multiple myeloma for whom oral therapy is not appropriate. CASI acquired China rights to melphalan from Spectrum Pharma (NSDQ: SPPI) as part of a three-drug deal in 2014.  

Government and Regulatory 

On Thursday, China began the tendering process to supply drugs in 11 major China cities (see story). The government wants to cut prices for generic drugs, and the process was more successful than experts predicted. China pharmas -- and multinationals -- offered their products at prices that were up to 90% lower, creating fear that winners of the tendering process might be worse off than the losers. In all, companies filed tenders to supply 31 drugs to Shanghai's hospital pharmacies. The prices dropped an average of 46% and pushed China pharma stock prices sharply lower.

Disclosure: none.


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