Week In Review: China Pharma Year-End Deals

Deals and Financings

Furen Pharmaceutical (SHA: 600781) will acquire Kaifeng Pharmaceutical for $1.2 billion in a combination of shares and cash (see story). Both companies are part of Furen Group. Furen Pharma produces TCM products. Kaifeng, the much larger company of the two, is involved in R&D, manufacturing and sales of chemical drugs and APIs. Furen plans to raise $820 million by issuing additional shares, which it will use to pay for the transaction and add production capacity. 

Chongqing Fuan Pharmaceutical (SHZ: 300194) plans to pay $231 million to acquire Yantai Justaware Pharma (see story). The payment will consist of $83 million in cash and the remainder in stock. Both companies are heavily involved in production of western drug APIs. Fuan will issue an additional $114 million of stock to finance the cash part of the purchase, buy additional property and underwrite Justaware's drug R&D projects. 

GenScript Biotech (HK: 1548), a US-China provider of life science research products, raised $67.6 million in a Hong Kong IPO (see story). GenScript is headquartered in New Jersey, but the company located its major R&D and production facility in Nanjing's Jiangning Science Park. About half of the company's business is in the US, and it markets to 100 countries globally. 

Shanghai Kaibao Pharmaceutical (SHZ: 300039) invested $20 million in Shanghai Yizhong Biotech, a company developing a coated form of the cancer drug paclitaxel (see story). Kaibao owns a 20% stake in Yizhong following the transaction. Yizhong's lead product, currently approved for clinical trials, is an injected form of paclitaxel micelles, a Class 5 biologic drug, aimed at improving delivery of paclitaxel to patients with lung cancer. 

Sihuan Pharma (HK: 0460) entered a three-year collaboration with RaQualia Pharma of Japan to develop novel drug candidates for pain relief (see story). The two companies will employ multiple lead-discovery technologies, including high-throughput screening technology, to identify promising candidates for a specific ion channel target. Sihuan will own greater China rights to any products developed by the collaboration, and RaQualia will share in ex-China profits. Sihuan will carry out the work through its Shandong XuanZhu Pharma subsidiary.