Hillhouse leads $418m investment in China's I-Mab

Hillhouse Capital – which led the company’s last private funding round before its IPO – also led the private placement, with Singapore’s GIC Private coming in as a significant investor. Other backers include Avidity Partners, OrbiMed, Octagon Capital Advisors, Invus, Lake Bleu Capital, Perceptive Advisors, Cormorant Asset Management, Sphera Healthcare and Alyeska Investment Group.

The consortium bought 12.67 million American Depository Shares (ADS) at $33 apiece, a 6.4% deficit to the September 3 closing price. They also subscribed to warrants, with a conversion price of $45 per share, that could inflate the proceeds by $104.5 million if fully exercised. I-Mab’s stock closed up 3.6% at $37.07 on September 4 in response to the announcement.

The company raised $114.5 million through its IPO in January, pricing its shares at $14 apiece. Underwriters exercised part of the overallotment option. In addition to Hillhouse, Hopu Investments, CDH Investments, Ally Bridge Group, EDBI, CBC Group, and Hony Capital took part in I-Mab’s private funding rounds. As of February, CBC owned 35.5%, while Hony held 7.1%. The other investors were below the 5% minimum disclosure threshold.

I-Mab was established by CBC in 2016 through the merger of two portfolio companies under its early-stage affiliate I-Bridge Capital: Third Venture Biopharma and Tasgen Bio-tech. Third Venture’s strength in early-stage R&D was regarded as globally competitive but not yet advanced to the point of clinical trials. Tasgen mainly handled in-licensed products from Genexine that were well de-risked but limited in commercial scope given they only entailed ownership rights within China.

CBC and Chinese medicine producer Tasly Holding provided a $100-150 million seed investment at the time of the merger. The I-Mab team has since grown from 34 to about 220, while R&D expenditure has surged, reaching $121 million in 2019 compared to $60.7 million the prior year. The goal is to foster a tiered development pipeline bringing together a range of de-risked late-stage assets and innovative early-stage products, with a focus on cancer and autoimmune diseases.

I-Mab now has 11 clinical and pre-clinical products, including five assets in-licensed from global operators for use in China. Among them is the company’s most advanced project to date, a drug candidate based on a protein associated with immune cells that targets a type of bone marrow cancer called multiple myeloma. It was in-licensed in December 2017 and entered phase-three trials earlier this year.

Recent developments include a global collaboration agreement with AbbVie to develop an anti-tumor drug in I-Mab’s proprietary portfolio. AbbVie will receive an exclusive global license, excluding Greater China, and make an upfront payment of $180 million. If all the development and regulatory approval milestones are achieved, I-Mab will be eligible to receive up to $1.74 billion, plus royalties.

“This financing, which is among one of the largest PIPE deals in recent history, will strengthen our position to effectively execute our strategic priorities and advance our globally competitive pipeline to ultimately bring innovative medicines to patients in need,” said Dr. Jingwu Zang, founder and honorary chairman of I-Mab, said in a statement. “We are very pleased to welcome Hillhouse to our board and look forward to its counsel on our journey to become a fully integrated biopharma.”

Headquartered in Shanghai, I-Mab has bases in Beijing and Hong Kong, and opened a US office in Rockville, Maryland following its last private funding round. Half of the product pipeline is now being developed in the US.

Revenue came to RMB30 million ($4.3 million) in 2019, down from RMB53.7 million the previous year. Over the same period, the net loss widened from RMB401 million to RMB1.45 billion, largely due to rising R&D expenses. Revenue for the six months ended June 2020 were zero, compared to RMB15 million a year earlier, while the net loss narrowed from RMB857.3 million to RMB582.9 million.

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• Topics
• Greater China
• Healthcare
• PIPEs
• China
• Pharmaceuticals
• Hillhouse Capital Management
• OrbiMed
• CBC Group