In a move designed to advance its pipeline and its “innovative medicines business,” Chinese biotech Hutchmed will divest its 45% interest in Shanghai Hutchison Pharmaceuticals Limited (SHPL) for $608 million. SHPL is a commercially focused joint venture that primarily sells cardiovascular prescription drugs in China.
China-based private-equity firm GP Health Service Capital will pay $473 million for a 35% stake in SHPL. Meanwhile, Shanghai Pharmaceuticals—which combined with Hutchmed to form SHPL in 2001—will pony up $135 million for a 10% chunk of SHPL.
The deal, which is expected to close by the end of the first quarter, will increase Shanghai Pharma’s stake in SHPL to 60% while Hutchmed will retain 5% ownership.
“These transactions would allow Hutchmed to focus on its core business of discovering, developing and commercializing novel therapies for the treatment of cancers and immunological diseases, including advancing its next-generation antibody-targeted-therapy conjugate programs,” the 25-year-old company said in its release from this week, adding that it will host an update conference call on Tuesday of next week.
The divestiture reinforces the strategy Hutchmed laid out in November of 2022—under its then-new CEO and longtime chief scientific officer Weiguo Su, Ph.D.—when the company reprioritized its portfolio assets to accelerate its “path to profitability” and establish a “long-term sustainable business.”
Hutchmed said it will invest funds from the transactions to develop its pipeline, which is bolstered by its “next-generation” antibody drug conjugate (ADC) platform.
Meanwhile, on Thursday Hutchmed revealed (PDF) that the China National Medical Products Administration (NMPA) has accepted its application for the combination of Orpathys and AstraZeneca’s Tagrisso for locally advanced or metastatic epidermal growth factor receptor (EGFR) mutation-positive non-small cell lung cancer (NSCLC).
In 2022, Hutchmed was denied an opportunity to enter the U.S. market when the FDA rejected its pancreatic cancer treatment surufatinib because its two phase 3 trials were conducted exclusively in China.