Hong Kong-listed 3SBio has moved to gain a controlling stake in biosimilar maker Shanghai CP Guojian Pharmaceutical, paying RMB1.4 billion ($213.3 million) in a deal that places it in the forefront of biotech in China.
3SBio now holds about 29% of the overall equity in CP Guojian and 54% of the voting power through a complex transaction with four existing large shareholders after it bought a 7% stake in the company last year.
The combination of the two largest biotechs in China includes biosimilars of Amgen's ($AMGN) Enbrel (etanercept) and Zinbryta (xenopax) from Biogen ($BIIB) and AbbVie ($ABBV) as well as a pipeline on mAbs candidates "for which new drug applications have been filed," according to a press release filed with the Hong Kong Stock Exchange on the late November deal.
In 2013, Guojian Pharmaceutical worked with India's Cipla to manufacture a copy of the rheumatoid arthritis treatment Enbrel from Amgen to sell at nearly a third off the original in India.
CP Guojian has filed with the China FDA for marketing approvals for Herceptin and Rituxan, with as many as 10 other candidates, according to industry sources, either in clinical stages or planned.
"We think this deal also demonstrates 3SBio's deal execution ability by consolidating multiple parties," Deutsche Bank analysts Jack Hu and Linc Yiu wrote in a note to clients with a buy recommendation.
"While the remaining 71% is mainly controlled by two other parties, we have confidence in management's commitment to create the largest biotech company in China."
CP Guojian also has a major mAb manufacturing facility that 3SBio said was a major focus of the transaction for its own candidates.
"The Target (CP Guojian) will provide a manufacturing platform for the Company's (3SBio) Phase I monoclonal antibody anti-TNF alpha candidates for the treatment of rheumatoid arthritis," 3SBio said in the HKEx filing.
"The Target's monoclonal antibody manufacturing platform is complementary to the Company's other manufacturing platforms for mammalian and bacterial recombinant proteins in Shenyang and Shenzhen, and chemically synthesized small molecules in Hangzhou."
3SBio makes TPIAO, a recombinant human thrombopoietin and EPIAO, a recombinant human erythropoietin. The company, started in 1993, has 8 other products in nephrology, oncology and other therapeutic areas.
The company was listed on the Nasdaq, but taken private in 2013. But this year it went back to the capital markets, raising $710 million in an initial public offering on the Hong Kong Stock Exchange.
Since that listing this summer, the company has been on a deal spree including with South Korea's Alteogen in October in an oncology antibody agreement. It also bought small molecule maker Zhejiang Wansheng Pharma in July for RMB528 million ($85 million).
That followed a June deal for ex-China rights to Apexigen's anti-TNF monoclonal antibody technology, adding to mainland rights held since 2006. The candidate, SSS07, has demonstrated higher potency than the best-known available TNF inhibitors, including adalimumab and infliximab, in preclinical testing, according to a press release at the time.
- here's the release (PDF)