Week In Review: WuXi PharmaTech To List Subsidiary On China's Third Board

Deals and Financings

WuXi PharmaTech (NYSE: WX), China's largest CRO/CMO, has filed to list its chemical manufacturing subsidiary, SynTheAll Pharmaceutical Co. Ltd., on China's Third Board, a two-year old electronic OTC exchange (see story). Although it has submitted a listing application, WuXi said it may not conduct an IPO for STA immediately after approval. WuXi further explained that its chemical CMO subsidiary requires greater capital investment than the other parts of its CRO/CMO business. 

Shanghai Fosun Pharma (SHA: 602196; HK; 2196) will pay $137 million to acquire a 65% sake in Suzhou Erye Pharma, a company that makes antibiotics and other medicines (see story). In addition, according to media reports, the owner of the remaining shares of Erye has the right to request that Fosun purchase its 35% ownership in the company for $111 million in January 2020. 

CANbridge Life Sciences, a Beijing biopharma startup, raised $10 million in a Series A round that it will use for new business opportunities and to advance its drug portfolio (see story). The company in-licenses China rights to drug candidates from western drug companies. Investors in the round were Qiming Venture Partners and TF Capital, a VC fund begun by China CRO Tigermed that includes other healthcare companies. 

Oramed Pharma (NSDQ: ORMP), an Israeli company that develops oral versions of IV drugs, raised $5 million in a private placement with Guangxi Wuzhou Zhongheng Group (SHA: 600252) (see story). Oramed will use the proceeds for clinical trials of ORMD-0801, an oral insulin product, and development of its oral GLP-1 analog project, also for diabetes. Oramed expects Zhongheng to develop its oral drug products in China. 

Sinopharm A-Think Pharma in-licensed greater China rights to a clinical-stage targeted cancer treatment from Aeterna Zentaris, a Canadian biotech (NSDQ: AEZS; TSX: AEZ) (see story). The drug, zoptarelin doxorubicin, is a combination of the well-known chemotherapy doxorubicin and a novel synthetic peptide carrier. It is currently in a Phase III trial for endometrial cancer. Sinopharm A-Think made a $1 million upfront payment and is liable for additional regulatory and commercial milestones. 

China Pioneer Pharma Holdings will import, sell and co-promote the cardiovascular drug Neoton in China for Alfa Wassermann S.p.A of Italy, a long-standing partner (see story). Neoton, an injectible creatine phosphate sodium drug, is used in cardiac surgery to protect cardiac muscles. Measured by sales revenues to hospitals, creatine phosphate was the seventh best-selling chemical drug and the second best-selling cardiovascular drug in China last year. 

Trials and Approvals

According to a statement from the CFDA, China has approved three separate diagnostic test reagents for Ebola (see story). They were developed by Daan Gene, which is affiliated with Sun Yat-sen University, Puruikang Biotech of Shenzhen, and Shanghai ZJ Bio-Tech. The agency positioned the tests as a defense against any suspected cases of Ebola, which will help China to prevent an outbreak of the disease. 

Company News

Eisai Co. (TO: 4523), a Japanese multinational pharma, completed construction of a new parenteral manufacturing plant in Suzhou (see story). The facility is initially equipped with a production line for methycobal injection, a treatment for peripheral neuropathy and a major product for Eisai in China. The new facility has a capacity to manufacture 60 million ampoules per year. Over time, Eisai plans to expand the plant to become the company's main production facility for injection products intended for Asian and Latin American markets. 

Industry Insights

Because China has recently loosened its rules on converting the Chinese yuan into foreign currencies, China RMB-denominated venture capital funds have a new lease on life: they can compete with western VC funds for US and European life science deals (see story). It couldn't come at a better time, says BioWorld, because China is awash in investible cash with no place to go, because the competition to enter China deals is fierce. By contrast, western companies seeking venture capital must sometimes lower their terms to entice investors. To western pharma execs, a China VC  ̶  who doesn't argue with the term sheet and takes a mostly hands-off approach to oversight  ̶  is a very welcome sight. 

According to a new IMS Health report, China is already the world's second largest pharmaceutical market, and it will spend between $155 billion and $185 billion on drugs in 2018 (see story). IMS says China's citizens will expect more and better healthcare, raising revenues, but the government will apply pressure on costs, restraining overall spending levels. In addition, the health consultancy believes drug spending in 21 "pharmerging" countries will rise 50% by 2018 over 2013 levels. 

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