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Week in Review: Zai Lab Targets $1 Billion Valuation in Planned US IPO

publication date: Aug 12, 2017
 | 
author/source: Richard Daverman, PhD

Deals and Financings

Shanghai's Zai Lab is planning a US IPO that could raise $150 million and value the company at $1 billion, according to knowledgeable sources (see story). The company has already picked Citigroup and JPMorgan Chase as underwriters, though it has not completed a US filing. Zai Lab is led by high-profile Samantha Du, PhD, who previously was responsible for Chi-Med's innovative drug R&D operations. Zai is developing innovative products with an eye toward the China market in oncology, autoimmune and infectious disease areas. The company has in-licensed products from western drug companies, and it started its own drug discovery operations in 2015. 

Hangzhou Just Biotherapeutics (Just China), a company focused on providing affordable biologic drugs, completed a $57 million Series B funding (see story). Just China is developing a portfolio of innovative and biosimilar products. Founded in early 2016 as a joint venture with Just Biotherapeutics (Just) of Seattle, Just China was established with the goal of shortening the development process and reducing the manufacturing cost of biologic drugs. The B round was led by Temasek of Singapore and joined by existing investors Lilly Asia Ventures and ARCH Venture Partners. 

New Horizon Health, a Beijing-Hangzhou company developing early-stage cancer screening products, raised $20 million in a B round led by Qiming Venture Partners (see story). New Horizon's first product is a home-based test for colorectal cancer using fecal gene analysis (FIT-DNA) technology. Horizon believes the test can detect precancerous lesions five years earlier than blood tests. Using a colonoscopy, the lesions can be removed before they become cancerous. Previous investors Legend Capital and SoftBank China also participated in the B round. 

Shanghai Fosun Pharma (SHA: 600196; HK: 2196) is vying with Shanghai Pharma Holding (SHA: 601607) in a battle to acquire a minority stake in Atlanta's Arbor Pharma, according to Bloomberg News (see story). Apparently, US private equity company KKR has put its Arbor stake up for sale, with bids expected in the $600-$700 million range. Arbor makes both generic and patented drugs; it also has an active R&D program with seven candidates in clinical trials and another in pre-clinical development. KKR made an investment of undisclosed size in Arbor in late 2014. 

Biocept (NSDQ: BIOC), a San Diego liquid biopsy company, raised $2.2 million from Hong Kong's Ally Bridge LB Healthcare Master Fund in a private placement (see story). Biocept provides physicians with personal medicine tests for cancer treatment, using its Target Selector™ platform to analyze circulating tumor cells and circulating tumor DNA. In addition to the capital, Ally Bridge will help Biocept develop a strategic plan to bring its liquid biopsy platform to China. 

Salubris Biotherapeutics, the US arm of Shenzhen Salubris Pharma (SZE: 2294), negotiated a tech transfer with the US National Institutes of Health for a potential liver cancer drug (see story). The rights are for a bispecific antibody-drug conjugate targeting GPC3, an antigen expressed in liver cancer. According to the NIH, opponents have until August 22 to object to the agreement; otherwise, it will proceed. Some elected US officials oppose these agreements, arguing the US government paid for the basic research, but retains no control over the price the licensee will charge.

HitGen Ltd. of Chengdu has begun a multi-target, multi-year collaboration with LEO Pharma A/S, a Danish dermatology company (see story). Using its very large DNA-encoded library of novel leads, HitGen will discover novel small molecule leads for multiple targets specified by LEO. HitGen has established discovery partnerships with major global pharmas, including Janssen, Merck, Pfizer and Scripps Research Institute. Under the terms of the LEO agreement, HitGen will receive an upfront payment and be eligible for milestones. 

Company News

Shanghai Pharma (SHA: 601607)  signed a memorandum of understanding with DHL Supply Chain, a global contract logistics firm, to prepare for a "rapid" global expansion and optimize its current pharma distribution network in China (see story). Shanghai Pharma will gain priority access to DHL's global logistics network, including temperature-sensitive life sciences services to Europe. It also will work with DHL to make its China distribution procedures more efficient because of the government's cost-cutting two-invoice reform. 

Trials and Approvals

A group of Hong Kong researchers have shown the viability of "liquid biopsy" early cancer screening in a large trial (see story). Dennis Lo, PhD, the founder of Hong Kong cancer screening company Cirina, along with associates at Hong Kong University, conducted a three-year test among 20,000 men for nasopharyngeal cancer. 34 cases were discovered, and 71% of the cases were still at an early stage of development. The results were published in The New England Journal of Medicine. In June, Cirina merged into Grail, a California company that has raised $1 billion to develop early screening tests for cancer. 

Disclosure: none.


 

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