Deals and Financings

BGI, a Shenzhen genomics company, is edging closer to an IPO (see story). The company now expects to raise $250 million on Shenzhen's Chi-Next Exchange sometime in July, following all-but-final approvals from China's Securities Regulatory Commission. Known as a world leader in basic science sequencing, BGI now generates 55% of its income from clinical genomic tests, especially its NIFTY prenatal test for hereditary illnesses such as Down's Syndrome. The business is very profitable: BGI's IPO prospectus puts gross profit margin for reproductive services at 76%. 

ShangPharma will merge its Shanghai ChemPartner division, which includes all of the company's CRO/CMO operations, into Quantum Hi-Tech China Biological (SZE: 300149) (see story). The transaction, a reverse merger, allows ChemPartner access to China's capital markets, rather than spending years waiting for China IPO approval. ShangPharma said ChemPartner will continue to operate as a stand-alone company, even after the merger. Quantum, which is listed on the Shenzhen exchange with a market capitalization of $1.2 billion, produces fructooligosaccharide products as a probiotic for nutritional snacks. Specific terms, including ChemPartner's merger valuation, were not disclosed. 

Sanovas, a Bay-Area medical device maker, will start a venture capital fund in Suzhou's BioBay park, which will invest "upwards" of $75 million in Suzhou technologies (see story). Sanovas makes innovative micro-invasive devices, and its fund will seek investments in procedures that treat unmet medical conditions at affordable prices. The company will establish an Innovation Center in the Suzhou Institute of Nanotechnology and NanoBionics (SINANO). Sanovas' Suzhou center will also serve as a sales/learning base for China. 

GlaxoSmithKline (NYSE: GSK) will form a big data partnership with Guangzhou Institute of Respiratory Diseases (GIRD) to develop a respiratory disease management system that will target both asthma and chronic obstructive pulmonary disease (COPD) (see story). The goal will be to optimize care plans, especially for rural settings. The studies will include reimbursement systems, and they will also pay attention to China's tiered healthcare system, apparently allocating specific tasks to the appropriate levels.

Baheal Pharma of Qingdao will begin marketing IBM's (NYSE: IBM) Watson Health for Oncology big data program to China clinicians (see story). Three months ago, Baheal partnered with IBM to bring Watson for Genomics to China, initially for researchers. Watson for Oncology, which has been available in the US since 2015, currently covers treatment for lung, breast, colon, stomach and cervix cancers. Baheal will seek to market the molecular data interpretation technology to clinicians and researchers across the country. 

Trials and Approvals

Hutchison China MediTech (Chi-Med) (AIM/NSDQ: HCM) has dosed the first patient in a China Phase I/II trial of HMPL-453 (see story). HMPL-453 is a small molecule inhibitor of fibroblast growth factor receptor (FGFR). Earlier this year, HMPL-453 began its first Phase I trial in Australia, the eighth Chi-Med molecule to begin clinical trials. Last week, Chi-Med reported the CFDA accepted the company's New Drug Application for its lead drug, fruquintinib, a VEGFR inhibitor, indicated for colorectal cancer. 

Government and Regulatory

As part of an ongoing collaboration with the US, China agreed to ban the manufacture of four synthetic opioids, each a variation of fentanyl (see story). China is thought to be a major source of the so-called "designer drugs," which have been implicated in an increasing number of fatal overdoses in the US. The most widely used drug of the four is U-47700, a drug that was found at the house of entertainer Prince following his overdose last year. In March, China banned another four fentanyl alternatives, including carfentanil, a fentanyl-type drug used on large animals such as rhinos.