Week In Review: China's Sanpower Pays $820M For Provenge, A Prostate Immunotherapy

Deals and Financings

Sanpower Group, a China conglomerate, paid $820 million to acquire Dendreon, which makes Provenge, the world's first immunotherapy, from Valeant Pharma (NYSE/TSX: VRX) (see story). Approved as a treatment for prostate cancer in 2010, Dendreon never lived up to expectations because it combined high cost, limited insurance approvals and mediocre improvement over competitors. Its annual revenues are around $320 million. Based in Nanjing, Sanpower is involved in several industries, including healthcare delivery, though it hasn't previously produced pharmaceuticals. According to Sanpower, it has controlling interests in over 100 companies. 

Concord Medical Services (NYSE: CCM), a Beijing company that operates a large China network of radiotherapy and diagnostic imaging centers, formed a $150 million healthcare investment fund with Zhongrong International Trust (see story). Concord already runs 123 centers in hospitals across China; it says the capital will extend its reach and solidify its position in the sector. Concord has shown interest in owning hospitals over the last few years, which may also be a goal for the fund. The funds were evidently provided by Zhongrong; Concord has a market cap of just $200 million. 

Shanghai Fosun Pharma (SHA:600196; HK:02196) formed a JV with Santa Monica's Kite Pharma (NSDQ: KITE) to develop Kite's CAR-T immuno-oncology drug in China (see story). Axicabtagene ciloleucel (KTE-C19), has completed clinical development in the US and Europe to treat B-cell lymphomas. Fosun will pay $40 million to Kite upfront and as much as $35 million in milestones. It will also provide $20 million for China development costs. The JV will also have an option for additional Kite products, including two T cell receptor candidates. 

Beijing's Cui Yutao Health Management Center raised $20 million in a C round to improve its pediatric care mobile app, Yuxueyuan, and increase its network of pediatric clinics (see story). At the moment, Cui Yutao seems to operate a single clinic in Beijing. Dr. Cui is a well-known author in China of books that advise mothers on infant/pediatric care. GGV led the C round, joined by existing investors HighLight Capital, a healthcare investor, and Wu Capital, the investment vehicle for China's Wu family. 

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