Updated: US puts hold on F-star's takeover by China’s Sino Biopharm, citing national security risks
F-star Therapeutics won’t yet be able to close its deal with its Chinese buyer, after the US government’s Committee on Foreign Investment in the United States panel put a hold on the takeover, citing national security risks.
China’s Sino Biopharm made a $161 million deal with F-star in June, seeking to buy its bispecific antibody platform. The deal was being done via Sino’s invoX unit, a subsidiary meant to help the Hong Kong-based company expand outside of China. That deal now appears to be at least temporarily blocked, given the US’ order.
In a filing with the SEC, F-star said the CFIUS panel had “issued an order (the “Interim Order”) preventing the consummation of the transactions pursuant to the Merger Agreement, citing unresolved national security risks.” The order will stay in place to “provide CFIUS adequate opportunity to continue its review and investigation.”
In a statement, invoX said the companies were working with CFIUS and still planned to close their deal.
“We are seeking to move swiftly to ensure F-star has the financing it needs to maintain potentially life saving work on cancer clinical trials, while avoiding extensive layoffs,” invoX said in a statement. “Through our engagement with CFIUS staff, we understand that the Committee has determined that any national security concerns can be mitigated and will work expeditiously to reach a resolution.”
In November, F-star and Sino Biopharm announced that a review by the foreign investments panel would have to push out their target for closing the deal. In a filing Friday, the companies extended their deadline to close the merger to the end of January.
F-star’s shares plunged 34% in trading on Thursday, a sign of investors’ skepticism about the takeover. The US government has used CFIUS as a way of scrutinizing China’s attempts to expand its life sciences industry and to guard technologies developed in the US.
John Fraunces, an outside representative for F-star, declined to comment further.
Editor’s note: This story was updated on Dec. 30 with a comment from Sino Biopharm’s invoX unit.