China-focused Decheng Capital said a deal by Roche ($RHHBY) valued at $425 million for U.S.-based antibiotic diagnostic firm GeneWeave is an important milestone for the firm and the prospects of bringing a sorely needed product into the China market.
Superbug resistance to antibiotics is a growing global problem with China as an epicenter as doctors overprescribe the medicines and patients use them for unrelated ailments.
That, according to Victor Tong Jr., a partner at Decheng Capital, a firm which recently invested in a Series B round at GeneWeave, is where the firm shows the most promise by making quick analysis of bugs and matching the right antibiotic in hours, shaving time from the decision-making process in hospitals.
|Decheng partner Victor Tong Jr.|
"It (GeneWeave) has developed a disruptive bacterial detection platform that also fits very well in the China market," Tong said in an email to FiercePharmaAsia.
"China faces a serious problem, perhaps more so than the U.S., with hospital acquired infections and specifically with MRSA (methicillin-resistant Staphylococcus aureus). Several studies in China demonstrate an alarming increase in antibiotic resistance in that population, and the prevalence of MRSA in Chinese hospitals has increased from 30% to 70%. This is primarily driven by widespread, inappropriate, empirical use of antibiotics. With GeneWeave's technology, it can combat this alarming issue."
The World Health Organization estimates that China consumes almost half the world's antibiotics, with the mainland the world's largest manufacturer at 162,000 tons of more than 200 varieties in 2013. Many of them are exported as active pharmaceutical ingredients for humans and animals, the South China Morning Post said in June, citing researchers.
In fact, China's Pearl River flows with residues of three dozen types of common antibiotics widely consumed by top-user China, a Chinese Academy of Sciences-sponsored study found. The study suggests that overuse by humans and animals is the main driver causing densely populated areas to see high concentrations of antibiotic residue.
For Roche, the move is a step back into antibiotics development for a firm that likes to pair medicines and diagnostics--as seen with drugs like Tarceva in Asia where diagnostics played a key part in sales growth.
For Decheng, which provides capital to early and growth stage life science companies in China and the U.S., the deal caps an impressive month by China-focused inventors with U.S. ties.
This week, U.S.-based proton therapy system maker Mevion Medical Systems secured as much as $200 million in financing led by two Chinese Investors, HOPU Investments and YuanMing Capital. In addition to the investment, Mevion and the lead investors will form a joint venture to make, sell and service proton therapy systems for the Chinese market.
And earlier in August, Mabtech, a holding company for China mAB biotechs, in-licensed four monoclonal antibodies to San Diego-based Sorrento Therapeutics ($SRNE) with all of the candidates having completed Phase III trials in China, according to a press release.
Additionally, China's ZAI Lab in-licensed a novel multikinase inhibitor aimed at a non-small cell lung cancer target from Sanofi ($SNY) as the firm, led by well-known biotech executive Samantha Du, builds its on deep Greater China trial and regulatory experience.
The deals come from a close-knit group of industry professionals with deep experience in both countries, an emphasis made by Tong about Decheng in his email.
"We are a team of investment professionals (with) complementary expertise, a long history of working together and a shared dedication to building highly successful companies that span the full spectrum of the life sciences industry," he said. "Our domain knowledge, access to innovative technologies and ability to bring proven Western products to China makes them the preferred partner for entrepreneurs, domestic and multinational companies, government agencies and investors."
- here's a related story from Reuters