Deals and Financings

Hua Medicine of Shanghai expects to spend $200 million over the next three years on its novel oral diabetes 2 treatment, dorzagliatin. The company will raise additional capital for the effort and then IPO, possibly in Hong Kong or the US. The funds will underwrite Phase III development of its GKA product and commercialization. Ultimately, Hua hopes dorzagliatin will generate annual revenues of $3 billion, a 15% slice of the China type 2 diabetes market, once the drug is approved. Hua expects China approval in 2020.

Shanghai Fosun Pharma (SHA: 600196; HK: 2196) announced a $50 million US joint venture, a JV that includes two Fosun entities. Fosun Pharma USA will pay $25.5 million to own a 51% interest in the new JV, which was not named, and Fosun International (HK: 656), the conglomerate that is the parent of Fosun Pharma and its largest shareholder, will contribute the remainder, $24.5 million. Not much is known about the rationale behind the JV, except that it will be located in the US and focused on innovation in R&D, manufacturing, medical devices and medical diagnosis, which is not a very specific explanation.

Suzhou Kintor Pharma raised $44 million in a funding led by Shenzhen Green Pine Capital Partners. Established in 2009, Kintor is an innovative high-tech pharma developing novel products. Since its founding, the company has received over 25 Significant New Drug Creation awards, plus the China Science and Technology Ministry’s small and mid-size enterprise innovation funding support along with other awards.

Lepu Medical Technology (Beijing) (SHZ: 300003) acquired a 13% stake in Australia’s Viralytics (ASX: VLA, OTC: OTCQX:VRACY) via a $23.3 million private placement of Viralytics’ shares. Viralytics will use the funds for an Australian Phase III trial of CAVATAK, its oncolytic immunotherapy based on a common cold virus. Lepu has started China clinical trials of its own PD-1 and PD-L1 checkpoint inhibitors, a class of drugs that are expected to be effective adjuncts to CAVATAK. Besides pharmaceutical drugs, Lepu is involved in medical devices, healthcare services, and private hospitals.

Fosun Pharma (SHA: 600196; HK: 2196) acquired China rights to market a novel treatment for Parkinson’s disease from Portugal’s BIAL in an $18 million agreement. BIAL developed Ongentys (opicapone) as a once-daily adjunctive therapy to levodopa/DOPA decarboxylase inhibitors. It was approved in the EU in 2016. Wanbang Biopharma, a Fosun Pharma subsidiary, will commercialize the drug in China, paying $3 million upfront and up to $15 million in milestones.

Biostage (OTCQB: BSTG/OTCQB:BSTGD) of Massachusetts raised $4.2 million in a private placement led by China’s DST Capital, a Hong Kong all-industry investor focused on China. Biostage is developing bioengineered organ implants to treat cancers and other life-threatening conditions of the esophagus, bronchus and trachea. Because of the investment, Biostage will build a presence in China, which is home to the largest incidence of esophageal cancer worldwide.

Ferring Pharma, a Swiss company with a focus on reproductive medicine and women’s health, formed a long-term collaboration with the Chinese Academy of Sciences (CAS). As part of the effort, Ferring and CAS established a jointly funded laboratory in a Beijing CAS research facility. It will house Ferring and CAS researchers who will address unmet needs in fertility and high rates of obstetric complications. The two entities plan to develop basic and translational research in reproductive medicine, developing novel products and new therapies.

WuXi AppTec formed a JV with the Mayo Clinic to co-develop and deliver novel esoteric clinical diagnostic services in China and the world. Combining WuXi’s operational experience with Mayo Medical Lab’s clinical and lab expertise, the two groups expect the JV to quickly develop new tests. Each company will offer the tests in their own markets. The clinical testing business is a relatively new offshoot of WuXi’s CRO/CMO major operational focus.

Ping An Health Technology has signed an MOU with Varian (NYSE: VAR), a US maker of radiology machines that treat and manage cancer, to form a strategic partnership for expanding cancer care access in China. The two companies plan to investigate the use of artificial intelligence, cloud computing and big data technologies with the goal of delivering high quality, cost-effective cancer care to more people in China at centers that are close to their homes. Ping An Healthcare (SHA: 601318; HK: 2318) is the medical arm of China’s Ping An Insurance.

Shanghai Sinobioway Sunterra Biotech (SSSB) announced plans to extend its relationship with Florida’s F1 Oncology. SSSB will build a production facility, called Shenzhen Biowit, which will offer F1 Oncology’s chemically defined suspension-based lentivirus manufacturing technology and processes to China’s gene therapy market for CAR-T products and other gene therapies. One year ago, SSSB was formed by Sinobioway Group, Sunterra Capital and F1 Oncology to develop novel CAB (conditionally active biologic) CAR-T therapies for solid tumor malignancies in China.

East Sunshine Foresight Fund, the venture capital arm of Shenzhen’s HEC Pharm, will make a “series of investments” of unspecified size in Enlyton, a Columbus, Ohio, company developing novel imaging contrast agents. Enlyton combines antibodies with contrast agents to produce tumor images that are more precise. Its lead product is ENL210, a bioengineered anti-TAG-72 (tumor-associated glycoprotein) antibody fragment labeled with iodine-123. The product targets a broad family of solid tumors known as adenocarcinomas.

Ally Bridge Group, a Hong Kong-based life science investor, entered into a strategic partnership with LifeTech Scientific (HK: 1302) to invest in global medical device companies. LifeTech is a Shenzhen medical device maker. The two companies will invest as partners in global medtech enterprises with the goal of accelerating their market entry and commercialization in China. ABG and its affiliates manage $1.5 billion in healthcare assets in China, the US and Europe, from medtech to biopharmaceuticals.

Simcere Pharma of Nanjing acquired China rights to develop three bi-specific immunoncology antibodies from Merus (NASDAQ:MRUS), a Dutch biopharma. The candidates were developed using Merus’ proprietary Biclonics technology platform. Simcere, which earlier was a company focused on branded generics for China, has expanded through partnerships and internal R&D to develop new drugs. The company has established a four-biosimilar China marketing pact with Amgen (NASDAQ:AMGN) and three collaborations with Bristol-Myers Squibb (NYSE:BMY).

Beijing’s BeiGene (NASDAQ:BGNE) licensed multi-year rights to use Harbour BioMed’s H2L2 transgenic mouse platform, which generates fully human therapeutic monoclonal antibodies. Harbour BioMed, a Shanghai company, also entered another agreement, this one with ImmunoChina Pharma of Beijing, to develop fully human monoclonal antibody fragments for use in Chimeric Antigen Receptor T-Cell (CAR-T) Immunotherapy. ImmunoChina is developing CAR-T therapies for hematological and solid tumor cancers.

Berry Genomics (SHZ: 000710) of Beijing will collaborate with California’s 10X Genomics to develop next-gen noninvasive prenatal tests (NIPT). Specifically, the companies will incorporate 10X’s haplotype genomic information (determining whether a variation comes from the mother or father) into new NIPT tests. 10X Genomics’ technology provides deeper genomic reads than the competition, while Berry Genomics is a major provider of NIPT services in China.

Government and Regulatory

According to an article in BioCentury, the CFDA plans to double its drug application reviewers from 800 presently to 1,600 by 2020. In 2015, the CFDA employed just 170 reviewers, meaning the agency will increase its reviewing staff by almost 10-fold over a six-year period. The news was disclosed by Ruyi He, MD, Chief Scientist of the CFDA and the Center for Drug Evaluation, who was speaking at the WuXi Global Forum in San Francisco earlier this week.

Singapore’s Aslan Pharma (TT: 6497) now expects China approval of varlitinib one year earlier than its previous schedule, due to the CFDA’s speeding up of approvals for drugs that address an unmet need. Aslan has started a 68-patient China single-arm trial of its lead drug, varlitinib, in patients with advanced or metastatic biliary tract cancer. Following a discussion with the CFDA, Aslan now says it will file for approval of the drug if the primary endpoint of the trial, objective response rate, is met. Aslan expects to have the data by the end of 2018.

Trials and Approvals

3SBio (HK: 01530) reported the CFDA formally approved Bydureon, its once-weekly Glucagon-like peptide-1 (GLP-1) receptor agonist for type 2 diabetes treatment. In 2016, 3SBio in-licensed China rights to Bydureon and a daily GLP-1 product from AstraZeneca (NYSE:AZN) in a $100 million agreement. 3SBio. which was not previously involved in the diabetes sector, pointed out that Bydureon is the first once-weekly GLP-1 product available in China.

Suzhou’s Ascentage Pharma reported the CFDA has accepted its IND submission for APG-1387 as a treatment for hepatitis B. The novel molecule aims to restore apoptosis (programmed cell death) and eradicate hepatitis B rather than suppressing the virus. Ascentage is developing apoptosis-promoting drugs, mostly as treatments for cancer. APG-1387 would be the first inhibitor of apoptosis inhibitors (IAP) tested in hepatitis B. Ascentage is already conducting clinical trials of APG-1387 in cancer, one of its portfolio of six clinical stage IAP candidates.

Disclosure: None

Editor’s Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.



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