Baring Asia invests $100m in Hutchison China MediTech

The GP has acquired 3.28 million American Depository Shares (ADS) for $30.50 apiece via a private placement, according to a filing. As of mid-morning trading on NASDAQ on April 8, the stock was up 1.75% at $29.10.

Founded in 2000, HutchMed claims to be the first global-focused novel drug discovery company to emerge from China. It has an in-house scientific team of more than 600 professionals across China, the US, Europe, and Australia, as well as 420 people in China marketing its oncology treatments, Elunate and Sulanda.

Both drugs help restrict the development of blood vessels that support tumor growth, with Sulanda also stimulating the body’s immune response to tumor cells. HutchMed has global ex-China rights to Elunate – Eli Lilly is the local partner in China – and full global rights to Sulanda.

The company has produced 10 clinical-stage drug candidates to date, of which half are in global clinical development. It is currently conducting more than 40 clinical trials. In addition, there are seven late-stage preclinical assets focused on oncology and immunology.

HutchMed's largest shareholder is a subsidiary of Hong Kong conglomerate CK Hutchison Holdings. The company came into being when Hutchison Whampoa – as it was then known – approached ex-Pfizer executive Samantha Du about leading a pharmaceutical start-up in Shanghai. Du served as CEO of Hutchison MediPharma, HutchMed's R&D unit, building up a pipeline of oncology and auto-immune drugs.

"I was young and bold," Du told AVCJ in a 2016 interview. "What I found in China at that time - in 2001 - was basically there was no concept about innovative drugs. But developing new drugs was my passion. I felt that I could use my knowledge to create a drug development firm based in China but with a global vision."

After HutchMed went public in London in 2006, Du felt ready for a new challenge and took charge of China healthcare investments in Sequoia Capital. She then launched Zai Lab with a view to licensing pre-clinical findings from Western countries and developing drugs in China. Zai Lab went public in the US in 2017, a year after HutchMed's US IPO.

HutchMed – previously known as Chi-Med – filed for a Hong Kong listing in 2019 but ended up pulling the offering as markets wavered against a backdrop of protests in the territory. Last year, General Atlantic invested $100 million in the company and now holds 5% to CK Hutchison’s 45.7%.

Baring’s investment will support ongoing R&D work and commercialization in China and globally. HutchMed CEO Christian Hogg said the company would initiate 8-10 clinical studies in 2021. He added that the soon-to-be-approved Savolitinib is likely to be a first-in-class selective c-MET inhibitor – controlling enzymes that can cause cancer by switching cellular functions on or off – in China.

HutchMed posted $227.9 million in revenue for 2020, down from $204.9 million the previous year. Over the same period, the company’s net loss widened from $103.7 million to $115.5 million.

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• Topics
• Greater China
• PIPEs
• Healthcare
• China
• Baring Private Equity Asia
• Pharmaceuticals