Private equity meets China biotech: PAG infuses $540M to gain control of Hisun's biosimilar subsidiary
Private equity firm PAG has emerged as the winner in a bidding war for Hisun BioRay, the biotech unit of Chinese generics and API maker Zhejiang Hisun Pharmaceutical.
Under the deal Hong Kong-based PAG is shelling out $540 million in exchange for 58% ownership of BioRay — from its two R&D and manufacturing centers in Taizhou and Hangzhou to nationwide commercial operations — while the mother company retains the other 42%.
Hisun, which is state-owned, boasts of the deal as the largest private equity investment in China’s biotech sector to-date.
“This transaction marks an important milestone in mixed ownership reform of China’s state-owned sector,” Hisun chairman Guoping Jiang said in a statement. “By bringing in foreign direct investment to support the development of China’s biopharmaceutical industry, Hisun Pharmaceutical can sharpen its focus while supporting Hisun BioRay’s future development.”
Over 40 potential investors were vying for a controlling share of the young company, he added, which was just launched this January.
But with Hisun Pharma — a biologics player since 2003 that has seen ups (licensing pacts) and downs (FDA warning letters) — on their back, BioRay is not your average biotech fledgling. It current employs 700 staffers and markets a recombinant human TNFɑ fusion protein for rheumatoid arthritis, ankylosing spondylitis and psoriasis. There are more than 10 other oncology and autoimmune projects in the pipeline, including a biosimilar of Humira they plan to launch around the end of the year as Anjianning.
“PAG’s investment will support and accelerate the development of our pipeline and clinical trial progress, further strengthen our competitive advantage, and expand our footprint in the latest generation of innovative biologics and biosimilars,” BioRay CEO Haibin Wang said in a statement.
For PAG, which has $30 billion under management, this marks yet another biotech bet following recent investments in Rongchang Pharmaceuticals (also known as ReneGen) and Alphamab Oncology.
Suining Xiao, its partner and chairman of China, will become chairman of BioRay.