State-owned Shenzhen Investment Holdings Capital has agreed to invest up to 1.6 billion yuan ($220 million) into a wholly-owned subsidiary of Hong Kong-listed Luye Pharma Group as part of the latter’s plan to boost its oncology drug business.
As part of the three-phased deal, Shenzhen Luye Private Equity Investment Fund will first acquire a 25% stake in Nanjing Luye Pharmaceutical, the oncology drugs maker under Luye Pharma Group, for 1 billion yuan ($137.5 million).
The investment is subject to completion of the pre-investment due diligence work and internal and regulatory approvals, according to an exchange filing dated Tuesday.
The second condition mandates Luye Pharma Group to enter an agreement with Nanjing Luye or its wholly owned subsidiary to exclusively and irrevocably sub-license the rights for the development, sales, and other rights of small cell lung cancer drug Zepzelca in mainland China, Hong Kong and Macau, per the filing.
After the initial investment, the investor will subscribe to a 25% new equity interest in Luye Pharma (Shenzhen) by contributing its 25% Nanjing Luye acquired under the initial Investment. Nanjing Luye will become a wholly-owned subsidiary of Luye Pharma (Shenzhen) upon completion.
Finally, the investor has also conditionally agreed to further subscribe to the new registered capital of Luye Pharma (Shenzhen) for 600 million yuan ($82.5 million). Shenzhen Luye Private Equity Investment Fund will hold a total of 34.8% equity interest in Luye Pharma (Shenzhen) upon completion of the final investment.
The proceeds will be used to accelerate the development of Luye Pharma Group’s oncology drug business. “This would optimise oncology project research, clinical development, and registration processes, focusing on original innovation to achieve breakthroughs in best-in-class and first-in-class anti-cancer products,” the company explained in the filing.
Luye Pharma Group, which is engaged in the R&D, manufacturing, and sale of innovative medications, has established R&D centers across China, the US and Europe, with a robust pipeline of over 30 drug candidates in China and more than 10 drug candidates in other international markets. It will also help the group to promote the market access of its newly launched oncology products in the Greater Bay Area, among others.
Shenzhen Investment Holdings Capital is an investment firm wholly owned by Shenzhen Investment Holdings — the ultimate beneficial owner of which is Shenzhen Municipal People’s Government State-owned Assets Supervision and Administration Commission.
