WuXi AppTec is planning to invest over $30 million in Beijing-based biopharmaceutical firm CANbridge Pharmaceuticals, as the mainland leading biotech firm ramps up efforts to up stakes in China’s orphan disease treatment market.
WuXi PharmaTech Healthcare Fund I, an investment platform of WuXi AppTec, plans to purchase more than 1.69 million newly-issued preferred shares in CANbridge for over $20 million, and to spend another $10 million for warrants to subscribe more stake in the biopharma startup in the future, said WuXi AppTec in a filing with the Shanghai Stock Exchange on Tuesday (February 18).
Upon the completion of the deal, Shanghai-based WuXi AppTec will have a 13.11 per cent stake in CANbridge, including 7.50 per cent shares owned by WuXi PharmaTech Healthcare Fund I and 5.61 per cent shares held by a wholly-owned affiliate, WuXi AppTec (HongKong) Limited.
Besides WuXi AppTec, seven other investors including private equity firm General Atlantic Singapore also inked an agreement with CANbridge on February 15 to purchase preferred shares in the company, according to the filing. Financial terms of the transactions made by other investors were not disclosed.
Established in 2012, CANbridge is a biopharma company specialized in the development and commercialization of specialty healthcare products for orphan diseases and targeted cancers.
The biopharma firm plans to use the proceeds to expand its product pipeline for both self-developed and introduced rare disease treatment methods. The new funding will also increase the company’s operating capital and further enhance its commercial operation capabilities.
The investment is “an important move” for WuXi AppTec in the Chinese rare disease treatment industry that can help it empower partners and further enhance the business layout in the field, said the company.
The Chinese biotech major, which primarily serves as a contract research organization that helps drugmakers shorten their discovery and development procedures, is targeting to up stakes in serving about 20 million people suffering from rare diseases in mainland China.
The European Union defines a rare disease as one that affects less than one person in every 2,000, according to Genetic Alliance UK, a charity that supports people affected by genetic conditions. Of between 6,000 and 8,000 known rare diseases in the world, the Chinese authorities registered a list of 121 indications in May 2018, yet none entails free treatment.
WuXi AppTec raised $1 billion in an initial public offering (IPO) in Hong Kong in December 2018, about six months after the company went public on the Shanghai bourse through a fast-tracked listing.
Before the dual-listed IPOs, the company was taken private in a $3.3 billion deal from the New York stock exchange in 2015.