Carlyle invests $260m in China's Salubris Pharmaceutical
The Carlyle Group has paid about $260 million for a 5% stake in Shenzhen-listed Salubris Pharmaceutical.
The private equity firm acquired 52.3 million shares at RMB33.94 apiece. The transaction reduces controlling shareholder Xinlitai Pharmaceutical’s holding from about 66% to 61%.
Shares in Salubris have climbed 10% since confirmation of the deal and were trading at RMB41.28 as of late morning September 2. This confirms the company as one of the 20 largest biopharma players in China by market capitalization, which now stands at RMB39.5 billion ($5.8 billion).
Salubris is active in medical devices, generics production, and innovative drug development in areas such as diabetes, cancer, orthopedics, and anti-infection.
The company is also considered the second-largest player in the Chinese cardiovascular and cerebrovascular (CCV) segment, where it offers a range of tablets and injections. Carlyle is expected to support expansions of the innovative drug pipeline, CCV business, and international footprint.
Revenue came to RMB4.4 billion in 2019, down 3.9% versus the prior year. Net profit fell 51.4% during the same period to RMB709 million due in part to a local regulatory push bringing down the price of drugs. Revenue and net profit for the first half of 2020 came to RMB1.5 billion and RMB166 million, respectively.
“[Salubris] has made significant progress in developing an innovative drug pipeline through both in-house R&D as well as strategic M&A and licensing deals,” Ling Yang, a managing director at Carlyle, said in a statement. “We are impressed by what [CEO Kevin Ye] and his team have been able to build over the years, and very much look forward to drawing on Carlyle’s global resources to support the company’s future growth.”
Carlyle has invested more than $9.5 billion of equity in over 100 transactions in China to date. It connects growth potential in the domestic pharma market to societal aging, increasing awareness and affordability, and strong momentum in local biotech innovation. Previous investments in this space include Adicon, an independent clinical laboratory provider.
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