PAG buys control of China biotech player for $532m
PAG has agreed to pay RMB3.8 billion ($532 million) for a 58% stake in a biotech unit of Zhejiang Hisun Pharmaceutical. It is being called the largest PE investment in China’s biotech space to date.
Hisun Pharmaceutical will retain a 42% stake in the company, known as Hisun BioRay Bio-pharmaceutical. Although Hisun BioRay was not formally established as a subsidiary until January this year, Hisun Pharmaceutical has been active in biotech since 2003 and has described the business as one of its core divisions.
Hisun BioRay develops biologic antibody-based drugs, including a portfolio of autoimmune and oncology products. Its core offering, known as Anbainuo, is billed as a leading treatment for arthritis and psoriasis. Another product targeting autoimmune diseases is expected to be launched commercially within the year.
The company has 10 pipeline products in or beyond the clinical trial stage. These are developed and manufactured in two facilities in Taizhou and Hangzhou. The company also maintains an office in Shanghai and employs about 700 staff across the three cities.
“PAG’s investment will support and accelerate the development of our pipeline and clinical trial progress, further strengthen our competitive advantage, and expand our footprint in the latest generation of innovative biologics and biosimilars.” Wang Haibin, CEO of Hisun BioRay, said in a statement.
Jiang Guoping, chairman of Hisun Pharmaceutical, added that the transaction "marks an important milestone in mixed-ownership reform of China’s state-owned sector." This is a policy under which state-owned enterprises are encouraged to bring in private investors with a view to improving commercial performance.
PAG has about $30 billion in assets under management across private equity, real estate and absolute return strategies. Its PE division closed its third pan-regional buyout fund last year at $6 billion. Recent investments in China’s biotech space include Alphamab Oncology, which received a $60 million Series B in May and a $130 million Series A last year.
Investment interest in China’s biotech space has escalated rapidly in recent years on the back of local policy liberalizations and rising demand for advanced treatments related to pollution and lifestyle changes. According to AVCJ Research, Chinese PE and VC investment in drug development increased from $306 million in 2014 to $4.2 billion last year.
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