Sinopharm to Restructure with Private Capital
Deals and Financings
China National Pharmaceutical Group (Sinopharm), a State-Owned Enterprise that is China’s largest drug maker, will be re-organized into a hybrid ownership structure that includes investments from private sources (see story). The exact nature of the model has not been disclosed and, in fact, China officials may not have settled on a specific plan. The reform is part of a larger effort in China to privatize at least six SOEs using several different re-organization models. Of the six, only Sinopharm is a life science company.
Guizhou Yibai Pharma (SHA: 600594) will pay $128 million to acquire Tianjin Horus C&K Pharmaceutical (see story). Horus reported revenues of $32 million and profits of $6 million in 2013, pricing the purchase and 4X sales and 21X profit. However, the company’s business seems to be improving this year. In the first five months of 2014, Horus’ sales are up 30% and profits climbed 65%. Horus makes five products: two generic chemical drugs and three TCM products. One TCM is an exclusive product for Horus.
Morningside Group, a Hong Kong private investment group with investments in life science, participated in a $55 million C funding for Aduro BioTech, a Berkeley California clinical-stage cancer-immunotherapy company (see story). Aduro added Gerald Chan, Chairman and Co-founder of Morningside, to its board of directors.
Cellular Biomedicine Group (NSDQ: CBMG) of California raised $10 million through a private placement led by Hong Kong investment banker Francis Leung (see story). CBMG is a cell therapy company that is developing three products for the China market. For serving as lead investor, Mr. Leung has a three-year option to buy an additional 1 million shares at $8 each. If the stock trades above $12 for 20 consecutive trading days, CBMG has the right to compel the purchase. That may happen soon.
Trials and Approvals
Hamilton Thorne, Inc. (TSX: HTL) of Massachusetts was awarded CFDA approval for China marketing of its Lykos® laser, which is used in assisted reproduction procedures (see story). Hamilton Thorne will sell the device to China fertility clinics. The laser assembly used in the Lykos machine was also granted a China patent. Hamilton Thorne makes image analysis systems aimed at fertility, stem cell and development biology research markets.
Beike Biotechnology filed with the CFDA for approval to use human umbilical cord (UC) derived mesenchymal stem cells (MSCs) to treat Systemic Lupus Erythamatosus (SLE) (see story). Beike based the request on a single-arm, 40-patient test of the treatment in patients with active, refractory SLE. The UC-derived MSCs were well-tolerated and, according to the company, provided a clinical benefit to the patients. Beike, based in Shenzhen, focuses on stem cell treatments.
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