CNEI invests in Chinese drug developer
China New Enterprise Investment (CNEI) has committed $21 million to Shanghai Fudan-Zhangjiang Bio-Pharmaceutical (FDZJ), a Hong Kong-listed developer of drugs and diagnostic products.
The company has established four major R&D platforms: genetic engineering drugs, photodynamic therapy drugs, drug delivery systems and medical diagnostics products. Fully commercialized treatments include ALA-PDT, a photodynamic therapy drug used to treat skin diseases, and Libod, a cancer chemotherapy treatment agent.
CNEI claims that FDZJ is one of few pharma companies in China that develops its own drugs and holds original invention patents issued by the State Food and Drug Administration (SFDA). It recently obtained new drug certificates for Hemoporfin, which is used to treat port-wine stain.
The company was founded in 1996 by Fudan University with support from two local government investment agencies. Shanghai Pharmaceutical, a Shanghai-listed pharmaceuticals company, became the controlling shareholder in 1999 and FDZJ went public on Hong Kong's Growth Enterprise Market three years later, raising HK$160 million ($20.6 million).
It recorded a net profit of RMB37.4 million ($6 million) in 2011, up from RMB3.9 million the previous year, as turnover jumped 49% to RMB133.9 million.
According to FDZJ's 2011 annual report, Shanghai Pharmaceutical and Shanghai Industrial Investment each owned 29.6% of the company. China General Technology, Shanghai Zhangjiang Group and Shanghai Zhangjiang Hi-Tech Park also held significant stakes, while Fudan University and company management had smaller holdings.
As a result of the most recent transaction, CNEI is now FDZJ's second-largest shareholder.
The private equity firm is currently investing out of its $255 million second fund. Operating through a transparent onshore structure, the firm targets well established Chinese growth companies in a wide range of industries, with a particular focus on opportunities tied to domestic consumption.
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