Chinese biopharmaceutical company Hutchinson China MediTech Limited (Chi-Med) has entered into a definitive agreement to sell shares worth $100 million to New York-based growth equity firm General Atlantic.
Chi-Med agreed to issue the equivalent of 4 million American depositary shares (ADSs) at a price of $25 per ADS to General Atlantic through a private placement, resulting in gross proceeds of $100 million, said Chi-Med in a statement on Thursday.
As part of the agreement, the Chinese pharma firm also granted a warrant to General Atlantic to purchase up to an addition of over 3.33 million ADSs at an exercise price of $30 per share, and a term of 18 months. If exercised, the combined transaction volume of the private placement could amount to $200 million.
Listed on the Nasdaq Global Select Market and the London Stock Exchange’s AIM market, Chi-Med focuses on the discovery and global development of targeted therapies and immunotherapies for the treatment of cancer and immunological diseases. It has eight cancer drug candidates currently in clinical studies around the world.
The company has also developed a commercial platform that manufactures, markets and distributes prescription drugs and consumer health products in China.
Its revenue stood at $204.9 million in 2019, down 4.30 per cent compared to $214.1 million in 2018. The net loss attributable to Chi-Med reached $106.0 million last year, up 41.71 per cent from $74.8 million in 2018, shows its latest financial results.
Hong Kong-based Chi-Med will receive all proceeds from the private placement to fund the company’s ongoing research and clinical development and to support the further growth of its commercialization capabilities in China and worldwide.
“Over the last few months, we have made significant development, regulatory and commercial progress in several oncology programs intended for the global market,” said Christian Hogg, CEO of Chi-Med, in the statement. He said that the investment from General Atlantic will help Chi-Med further strengthen the balance sheet and deliver innovative cancer therapies to patients internationally.
The deal represents the latest investment made by General Atlantic in the life science field, following its bet on companies like Suzhou-based clinical-stage biotech firm Adagene, Beijing-based CANbridge, Boston-based Ginkgo Bioworks, which designs and licenses DNA code for custom-designed organisms, and UK’s biotech company Immunocore, among others.
Established in 1980, General Atlantic now has about $34 billion in assets under management (AUM) and operates a portfolio of 121 companies primarily in the fields of consumer, financial services, healthcare, and technology.