Week In Review: Deals Dominate China Biopharma News

Yantai Dongcheng Biochemicals (SHZ: 002675) paid $69.8 million to acquire the China assets of Global Medical Solutions, a US company that makes nuclear medicine and imaging contrast products (see story). GMS, which operates mainly in Asia Pacific, described the transaction as a strategic partnership that will be positive for GMS in the long term. In addition, GMS said it would continue to operate in China even though the sale included all of its current China operations. GMS did not specify any details about the synergism it expects between itself and Dongcheng. 

AliHealth, a subsidiary of China e-commerce giant Alibaba (NYSE: BABA), will invest $35 million to acquire a 25% stake in China Resources Wandong Medical Equipment's (SHA: 600055) medical imaging unit (see story). The unit, Wanliyun Medical Information Technology (Beijing), builds cloud-based big data medical imaging platforms along with cloud storage to support remote medical imaging services. AliHealth and Wanliyun will build a third-party imaging center to provide remote medical image diagnosing for patients, physicians and hospitals. 

Affymetrix (Nasdaq: AFFY) decided to accept a lower takeover bid from Thermo Fisher Scientific (TMO), rather than a higher offer from former Affymetrix executives that was backed by SummitView Capital, a China private equity firm (see story). Thermo Fisher offered $1.3 billion for Affymetrix while Origin, a special purpose vehicle formed by Centillion executives, upped its bid to $1.6 billion. Affymetrix said it felt the Origen offer was too risky. Although Origin disagreed with the assessment, it withdrew its takeover proposal. 

Sinovac Biotech (Nasdaq: SVA), a Beijing vaccine maker, has adopted a poison pill defense to prevent unwanted takeover attempts (see story). The company's board authorized a distribution of preferred shares, which, if activated, would render the company too expensive to acquire. In early February, Sinovac received a privatization offer of $6.18 per share from management that values the company at $345 million. A few days later, an outside group of China investors/pharmas offered $7 per share or $390 million for Sinovac. The board is considering both proposals. 

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