publication date: Apr 7, 2018
author/source: Richard Daverman, PhD
Deals and Financings
Concord Medical Services (NYSE: CCM) announced that CICC Capital led an investment of between $238 million and $286 million in Concord’s subsidiary Beijing Meizhong Jiahe Hospital Management (see story). The investors will hold 37.5% to 41.9% of Meizhong Jiahe's equity after the investment. Concord Medical Services Holdings Limited provides radiotherapy and diagnostic imaging services within public hospitals or in standalone medical centers, almost entirely in China.
CMAB Biopharma of Suzhou announced a Series B of $34 million led by CDBI Partners, with C-Bridge Capital, Cormorant, Qianhai FoF Fund and Tigermed participating (see story). The funds will be used to equip a GMP manufacturing facility compliant with China, US, EU and ICH standards. Three months ago, CMAB raised $38 million in a Series A funding led by C-Bridge Capital and BioBAY Park.The facility will contain production, purification and injection filling lines with reactors varying from 50L to 2000L, aiming to provide CDMO services for global clients in Phase I/II trials.
Terns Pharma, a California-Shanghai startup, in-licensed global rights to three Lilly (NYSE: LLY) small molecule candidates aimed at non-alcoholic steatohepatitis (NASH) (see story). Terns has its operations in Shanghai and will initially target China approval of the three candidates, with global development to follow. One year ago, Lilly Asia Ventures made an initial $30 million investment in Terns, though the company did not announce the funding until now. Terns focuses on oral, molecularly targeted, small molecule drugs to treat liver disease and cancer.
Frontage Laboratories, a Pennsylvania-Shanghai pre-clinical CRO, acquired Concord Biosciences of Cleveland, Ohio for an undisclosed price (see story). Concord, also a pre-clinical CRO, offers expertise in pharmaceuticals, agricultural, chemical and animal health. Frontage said the acquisition will allow it to offer a complete set of services to pharma clients, while adding agricultural products to its offerings. In 2014, Hangzhou Tigermed Consulting (SHZ: 300347), a clinical-stage CRO, paid $50 million for a 70% equity interest in Frontage.
Government and Regulatory
China’s State Council announced a new initiative to bolster generic drugmakers (see story). New rules will impose higher standards for generic drugs. If a generic drugmaker can qualify as a high-tech enterprise, the company will be eligible for tax incentives -- the normal 25% tax on corporate profits will be reduced to 15%. For the past few years, CFDA Commissioner Jingquan Bi has been cracking down on generics, saying many are ineffective because they are not equivalent to the original drugs.
A trade war between the US and China seems imminent, with both sides threatening to impose $50 billion of tariffs, a number that quickly grew to $100 billion (see story). At the moment, it seems as though the US will impose tariffs on products such as imported insulin, antibiotics and vitamins, among others. Experts caution that, because the threats need a few months to become effective, the tariffs may not progress into actual policies, as government regulators use the time to work out the underlying problems.
Trials and Approvals
Denovo Biopharma, a San Diego-Hangzhou company, has started a pivotal Phase III trial of its lead drug, DB102 (enzastaurin) (see story). DB102, which was initially developed by Eli Lilly (NYSE: LLY), failed a Phase III clinical trial in 2013 in patients with diffuse large B-cell lymphoma (DLBCL). Denovo acquired global rights to DB102 in 2014, planning to redevelop the drug by targeting a sub-set of patients. By analyzing Lilly’s patient samples, Denovo found overall survival was significantly improved for patients who possess the DGM1 biomarker. The study will enroll 235 patients in the US and China.
Shanghai Fosun Pharma (SHA: 600196; HK: 02196) plans to become the “Huawei of the pharmaceutical industry,” according to Qiyu Chen, Chairman of the company (see story). Chen made the comparison because, like the China smartphone company, Fosun will continue to invest in R&D and pursue M&A while it plans further expansion into global markets. Last year, Fosun spent $239 million on R&D, part of the nearly $740 million it has spent over the last five years. And it completed a $1.1 billion acquisition of a majority stake in India's Gland Pharma, which it says will help Fosun market biosimilar drugs globally.