Week In Review: Sorrento Acquires ACEA In $488 Million Deal Between Two San Diego-China Oncology Biopharmas

Laboratory Test Tubes

Deals and Financings 

Sorrento Therapeutics (Nasdaq: SRNE) will acquire ACEA Therapeutics in a deal worth up to $488 million (see story). Both companies develop novel cancer drugs, both are headquartered in San Diego and both have operations in China. Sorrento will pay $38 million upfront in stock and make up to an additional $450 million in milestones payments. The acquisition will include three ACEA candidates, one in Phase III, another in early clinical stage and a third in preclinical studies, along with ACEA’s library of over one million small molecules. ACEA has a manufacturing facility in China.  

Long Hill Capital, a China healthcare venture firm, closed its third fund with more than $300 million in committed capital (see story). Founded in 2016, Long Hill has now raised over $800 million. As with the earlier two funds, the firm plans to continue investing mainly in early stage healthcare and longevity companies, with some capital allocated to select growth-stage investments. Long Hill, which has offices in Shanghai and Beijing, notes that in 2050, more than 50% of China's citizens will be over the age of 50.  

Hutchison China MediTech (Nasdaq/AIM: HCM) raised $100 million in a private placement with Baring Private Equity Asia (see story). HutchMed will use the money to develop its ten oncology assets, all of which were developed internally, for global markets. It plans to start 8-10 registration and registration-intent studies in 2021. The company has two China-approved oncology treatments, Elunate® and Sulanda®, while savolitinib is expecting approval soon. Last month, China MediTech, previously known as Chi-Med, adopted the name HutchMed. 

NewMed Medical Company of Shanghai closed a $100 million Series C round led by Singapore's Temasek (see story). Established in 2015, NewMed develops interventional medical devices for structural heart disease. It has minimally invasive transcatheter devices in clinical trials for mitral valve replacement, mitral valve repair and aortic valve replacement, along with auxiliary equipment for the procedures. It is also developing additional innovative devices for heart repair. New investors in the C round include YF Capital and Chengwei Chuangban Fund.  

Biogen (Nasdaq: BIIB), a Cambridge, MA. biopharma, in-licensed ex-China rights to a biosimilar aimed at rheumatoid arthritis from Guangzhou's Bio-Thera (SHA: 688177) (see story). The candidate, BAT1806, is a proposed biosimilar to Roche's Actemra® (tocilizumab). It is an anti-interleukin-6 (IL-6) receptor mAb that is currently in Phase III trials. Biogen will make a $30 million upfront payment once BAT1806 reports satisfactory Phase III results, plus unspecified milestones and royalties.  

HitGen (SHA: 688222) of Chengdu has identified novel small-molecule compounds for a high-value biological target in a collaboration with BioAge Labs, a San Francisco area biopharma (see story). Dysregulation of the target, a critical component of the innate immune system, is linked to the underlying cause of severe diseases in elderly humans, such as Alzheimer's and cardiovascular disease, according to the companies. To identify the compounds, HitGen screened its DNA encoded library (DEL), which now contains over 1 trillion small molecules.  

Trials and Approvals 

Beijing's BeiGene (Nasdaq: BGNE; HK: 06160) was approved to manufacture the company's approved anti-PD-1 antibody at its new Guangzhou facility (see story). With construction starting in 2017, the facility boasts 8,000 liters of capacity for producing biologic drugs and one million square feet of floor space. The anti-PD-1, tislelizumab, will be the first drug to be made at BeiGene's new plant. In January, BeiGene announced a $2.2 billion deal with Novartis (NYSE: NVS) to commercialize tislelizumab in countries outside of Greater China.  

Shanghai's I-Mab (Nasdaq: IMAB) dosed the first patient in a US Phase I trial of a novel bispecific antibody (see story). I-Mab, which is developing TJ-L14B/ABL503 together with ABL Biotech (Kosdaq: 298380) of Korea, contributed its PD-L1 to the combination therapy. ABL, a bispecific company, contributed 4-1BB, a conditional T cell activator that becomes active only in the presence of PD-L1 expressing tumor cells. The two companies will enroll patients with locally advanced or metastatic solid tumors.  

Bridge Biotherapeutics (KOSDAQ: 288330), a Korea, China, US company, started a Phase I/II trial of a novel EGFR inhibitor in non-small cell lung cancer (NSCLC) patients with a specific mutation (see story). BBT-176 will be tested in NSCLC patients who progressed following prior therapy with an EGFR TKI agent. BBT-176 is designed to inhibit the signaling pathway of EGFR with C797S mutations, which causes resistance to osimertinib (Tagrisso). In China, Bridge Bio is a resident company of JLABS @ Shanghai, a Johnson & Johnson incubator.  

Shanghai Antengene (HK: 6996) will start a China Phase I clinical trial of ATG-019 in patients with advanced solid tumors or non-Hodgkin's lymphoma (NHL) (see story). ATG-019 is a novel oral dual PAK4/NAMPT inhibitor that will be administered as a monotherapy or combined with niacin ER. In preclinical tests, ATG-019 showed anti-tumor activity and a superior pharmacokinetics (PK) and safety profile, the company said. Antengene has a Taiwan Phase I clinical trial of ATG-019 underway in the same patient population.  

Industry News 

Invesco has launched a new China Healthcare Equity fund to offer a diversified portfolio of China-listed healthcare companies (see story). Based in Hong Kong, the fund will take positions mainly in Shanghai and Shenzhen-listed companies that are available in Hong Kong through Stock Connect, which allows investors to trade in Mainland China listings via Hong Kong brokers. The fund intends to invest in mid-cap stocks involved in five healthcare subsectors: medical devices, CROs/CDMOs, drug companies, medical services and vaccine producers.  

Disclosure: None

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