F-star's sale to Chinese buyer cleared by CFIUS following months of holdup
After taking several months to review F-star’s proposed sale to a Chinese company, the US government’s Committee on Foreign Investment in the United States (CFIUS) has finally given its blessing for the deal.
The clearance comes almost nine months after invoX Pharma, a subsidiary of China’s Sino Biopharm, first struck a deal to buy out F-star for $161 million in cash.
CFIUS is a longstanding group tasked with scrutinizing transactions involving foreign investments in the US and blocking any deals it deems threatening. But in recent years, the White House has signaled that biotech could be a top area for crackdown, triggering fears that it would create roadblocks for Asian investors interested in US companies.
Thanks to the review, the companies have extended the offer period multiple times. In December, CFIUS went as far as to put the buyout on hold, citing “unresolved national security risks.”
F-star suggested a month later that together with invoX, it was negotiating a “mitigation agreement” to address CFIUS’ concerns.
Once a high flyer in UK biotech, F-star makes bispecific antibodies designed to trigger more specific immune activation against cancer. While it boasted sizable deals with Bristol Myers Squibb and later Merck KGaA, it was in dire need of cash to pay off its debt and stay afloat. Sino Biopharm, which was looking to expand its overseas presence, offered exactly that.
With the final hurdle cleared, the deal is all but sealed as 70% of the F-star stock has already been tendered, according to a press release, and it only needs more than 50%. The tender offer is scheduled to expire on Wednesday.
Shares of F-star $FSTX rose more than 16% to $7.11.