State of China Life Science 2017 - EBD...

© Copyright 2018 ChinaBio LLC1

State of China Life Science – 2017

The VC Big Bang Expands

Greg B. Scott, Founder

China Showcase - January 7, 2018

General Distribution © Copyright 2018 ChinaBio LLC

© Copyright 2017 ChinaBio LLC

VC Fund Raising VC/PE Investment IPOM&A Partnering

2 © Copyright 2018 ChinaBio LLC

Topics

• Overview

• Investment Activity

• VC Funds Raised

• VC Investment

• M&A Activity

• IPOs

• Partnering Activity




2017 was another explosive year in life science investment“It’s be the best time ever to be an entrepreneur in China”

Government funding• $100B+ in state, provincial and local funding for life science

VC/PE funding• Nearly $40B raised and $12B invested in life science in 2017

Regulatory changes• Significant move toward global standardization; ICH membership

Returnees• Over 2 million returnees in last 6 years, ~250,000 in life science

Other factors:• 6.5% in GDP growth H1 2017; 300M+ middle class with $$• aging population (31% by 2050); chronic disease up 20-30%/yr• #2 pharma market, #1 by 2020 with >$1T in HC spending

Key factors driving China life science investment




CFDA Global Harmonization – a “Sea Change”

• “Novel drug” now means globally novel

• Tacit 60 day IND approvals

• Priority review available for novel cancer drugs

• Orphan drug pilot program announced

• Conditional approval based on ex-China data if drug addresses “urgent clinical needs”

• Separate IND/CTA approval no longer required for multi-regional trials, including Phase 1 trials, or drugs with an approved IND in an accepted country

• Pilot MAH Program expanded to a national program

• Cell and gene therapeutics to be treated as drugs




$39.8 B

+97%

$11.7 B

+122%

$4.9 B

+14%

$65.3 B

+200%

$8.3 B

128%

VC funds raised, funds invested and partnering all doubledRecord # of IPOs (53) and M&A had largest deal ever - $43B!

$ 21.5 B

$ 4.3 B

Partnering

M&A

$ 3.9 B

VC Investment$ 5.3 B

IPO

Funds Raised$ 20.2 B

$ 39.8 B

$ 8.3 B

$ 4.9 B

$ 65.3 B ($22.3 B)*

$ 11.7 B

Area Invested 2016 2017 2016 YoY 2017 YoY 2 yr Trend

$20.2 B

+85%

$5.3 B

+330%

$4.3 B

+16%

$21.5 B

+30%

$3.9 B

-7%

+265%

+550%

+32%

+300%

(+35%)

+98%

Financial Activity in China Healthcare

Source: ChinaBio® Consulting * With Syngenta in (out)

TIANJIN

BEIJING

Shenyang

LIAONING

SHANGHAI

JIANGSU

SHANDONG

Dalian

Nanjing

ZHEJIANG

Hangzhou

Suzhou

GUANGDONG

HONG KONGShenzhen

SHAANXI

Xi’an

Jinan

Qingdao

SICHUAN

Chengdu

CHONGQINGHUBEI

Wuhan

Taizhou

ShijiazhuangHEBEI

Guangzhou

ChinaBio® has helped raise over $500M in funding for

western and China-based life science companies


Investment Activity





$1.2B $0.6B

$3.9B

$10.9B

$20.2B

$39.8B

2012 2013 2014 2015 2016 2017

amount

1929

48

86

4674

# of funds

VC/PE Funds Raised Targeting China Healthcare

VC/PE funds raised nearly doubled in 2016 to $20BAnd doubled again in 2017 to $40B

Average

2014 $625 M

2015 $572 M

2016 $614 M

2017 $653 M

Source: ChinaBio® Consulting

$60B raised in 24 months!

Average fund size = record $653M



Examples of new funds of note in 2017

• C-Bridge Capital $400M

• Lilly Asia Ventures $450M

• Eight Roads (Fidelity) $250M

• Orbimed Asia $550M

• Quan Capital (Zai Lab) ~$150M

• China Renaissance/Huaxing $??B



$1.0B $1.0B

$1.7B $1.8B

$5.4B

$11.7B

2012 2013 2014 2015 2016 2017amount

VC/PE Investment in China Healthcare

Investment flowing into China life science doubled to $12BOver $17B invested in last 2 years + $13B in corporate/PIPEs

Average

2014 $31 M

2015 $38 M

2016 $24 M

2017 $32 M


~$43B in VC funds available

$32M average investment

33 42 64 62

267

478

# of deals

Over $500M

invested in 1st week

of Jan. 2018!



Services received largest VC investment followed by Diagnostics and Drug companies (combined 83%)

VC Investment 2017

– by Sector

Service, $3.8B, 32.5%

Diagnostic, $3.3B, 28%

Drug, $2.6 B,

23%

Device, $1.1 B,

9%

iHealth , $837 M, 7%

Amount

3%

33%

34%

49%

48%

33%

30%

3%

22%

13%

9%

28%

64%

54%

26%

23%

38%

23%

0%

0%

0%

0%

0%

7%

3%

10%

18%

15%

4%

9%

2012

2013

2014

2015

2016

2017

Service Diagnostic Drug iHealth Device

VC Investment 2012-2017

– by Sector

Amount

Source: ChinaBio® Consulting Note: iHealth included in Services prior to 2017



VC Investment: Deals of Note 2017（1）

Company Type Investors DateAmount

($)

Ascletis Drug C-Bridge, QHFZ, GoldmanSachs Jan. $100M

Practo (India) iHealth Tencent Jan. $55M

Grail Diagnostic Arch Venture, BMS, Tencent Mar. $900M

Kingdee Healthcare iHealth Yongjin, JD.com Mar. $170M

Haodaifu iHealth Tencent Mar. $200M

EpimAb DrugDecheng, 3E Bioventures,

Trend InvestmentApr. $25M

WuXi NextCODE DiagnosticTemasek, Yunfeng, Amgen

Ventures, 3W PartnersMay $75M

Gleneagles Hospital Service IHH Healthcare, Taikang June $1B

Source: ChinaBio® Consulting Cross-border Deals



VC Investment: Deals of Note 2017（2）

Company Type Investors DateAmount

($)

Ankon DeviceSBCVC, Dazhong Investment,

Youshi Capital, Tongsheng CapitalAug. $100M

WuXi NextCODE DiagnosticSequoia, Temasek, Yunfeng, 3W

Partners, Amgen VenturesSep. $240M

United Imaging DeviceChina Life Insurance Health Fund,

SDIC FundSep. $500M

Arcus Biosciences Drug GV, Decheng Capital, BVF Partners Nov. $107M

Fullerton Service Ping An Insurance Nov. $121M

Annoroad DiagnosticSAIF, SBCVC, GTJA, Ping An

VenturesNov. $100M

Henlius Drug Fosun, GTJA Dec. $190M




$4.2B $5.2B$8.6B

$16.5B

$21.5B

$65.3B

2012 2013 2014 2015 2016 2017amount

5778

106129

241

184

# of deals

M&A triples, the 8th consecutive record year$43B Syngenta/ChemChina largest industry M&A

M&A Activity in China Healthcare

Average

2014 $99 M

2015 $147 M

2016 $101 M

2017 $430 M


Record $430M average deal size



8%

20%

28%

38%

27%

1%

3%

9%

7%

5%

57%

69%

53%

40%

57%

34%

8%

10%

15%

11% 0%

2013

2014

2015

2016

2017

Service Diagnostic Drug Device iHealth

Pharma sector dominates M&A in total deal value, more than double the #2 sector, Services

Drug, $15.2 B,

57%

Service, $7.1 B,

27%

Device, $3.0 B, 11%

Diagnostic, $1.3 B, 5%iHealth,

0, 0%

Amount

M&A Activity 2017

- by Sector

M&A Activity 2012-2017

- by Sector

Amount




M&A: Deals of Note 2017（1）Outbound cross-border acquisitions remain active


Acquirer Target Type Date Amount ($)

Sanpower China Cord Blood Service Jan. $780M

Sanpower Dendreon (US) Drug Jan. $820M

Creat Group Biotest AG (Germ.) Service Apr. $1.3B

ChemChina Syngenta AG (Swiss) Drug Apr. $43B

Hengkang MedicalPRP Diagnostic Imaging

(Aus) Device May $248M

Quantum Hi-tech ChemPartner Service May $351M

CSL (Australia)Wuhan Zhong Yuan Rui De

Biological Products Drug June $352M

Chinese consortium

led by GL Capital

SciClone Pharmaceuticals

(US)Drug June $605M



M&A: Deals of Note 2017（2）Outbound cross-border acquisitions remain very active


Acquirer Target Type Date Amount ($)

Berry GenomicsChengdu Tianxing

Instrument & MeterDiagnostic Aug. $648M

Fosun Gland Pharma {India) Drug Sep. $1.1B

Shandong WeigaoArgon Medical Devices

(US)Device Sep. $850M

Fosun Symbiotec Pharma Drug Sep. $350M

Nanjing Cenbest Dendreon (US) Drug Oct. $909M

China Biologic Products TianXinFu Medical

Appliance Service Oct. $536M

Shanghai Pharma Cardinal Health (China) Drug Nov. $1.2B

JSR Corporation (Japan) Crown Bioscience Drug Dec. $400M



$1.4B

$0.8B

$2.0B

$3.7B

$4.3B

$4.9B

2012 2013 2014 2015 2016 2017

amount

106

16

3228

53

# of deals

Number of IPOs nearly doubled to a record 53 and largest funds raised since 2011, but avg size down

IPOs in China Healthcare

Average

2014 $126 M

2015 $115 M

2016 $153 M

2017 $92 M


Average IPO size drops to $92M



Pharma dominated IPO fundings, representing 64% of total funds raised

Drug, $3.1 B,

64%

Service, $776 M,

16%

Diagnostic, $539 M, 11%

Device, $454 M,

9%

Amount

6%

52%

23%

24%

12%

16%

10%

0%

4%

7%

3%

11%

67%

26%

68%

52%

77%

64%

17%

22%

5%

17%

8%

9%

2012

2013

2014

2015

2016

2017

Service Diagnostic Drug Device

IPO Activity 2012-2017

- by Sector

Amount


IPO Activity 2017

- by Sector

TIANJIN

BEIJING

Shenyang

LIAONING

SHANGHAI

JIANGSU

SHANDONG

Dalian

Nanjing

ZHEJIANG

Hangzhou

Suzhou

GUANGDONG

HONG KONGShenzhen

SHAANXI

Xi’an

Jinan

Qingdao

SICHUAN

Chengdu

CHONGQINGHUBEI

Wuhan

Taizhou

ShijiazhuangHEBEI

Guangzhou




Partnering Activity

ChinaBio® has identified over 1000 partnering, licensing and

acquisition candidates for western life science companies



$0.6B$1.2B

$1.8B

$4.2B$3.9B

$8.3B

2012 2013 2014 2015 2016 2017

amount

101

135 142

142 157

209

# of deals

New record set for partnering at $8.3B, catalyzed by new regulations and China innovation

Partnering Deals in China Healthcare

Average

2014 $ 50 M

2015 $ 102 M

2016 $ 83 M

2017 $ 118 M

Source: ChinaBio® Consulting Partnering and JV deals

Average deal value hits record $118M



Oncology still dominating partnering activity, but Neurology growing, while Infectious Disease slowing

Oncology, 49 , 43%

Infectious, 14 , 12%

Neurology, 11 , 10%

Respiratory, 7 , 6%

Dermatology，5 , 4%

Others, 28 , 25%

Pharma Partnering by Indication – 2017 (# of deals)

# of dealsSource: ChinaBio® Consulting Partnering and JV deals, 2017



Pharma partnering deals jump 50%, while cross-border partnering remains strong

Cross-border Pharma Partnering

Source: ChinaBio® Consulting Partnering and JV deals, 2017H1

by # of deals

8

912

13

38

85

76

(89%)

78

134

76

(85%)

96

(72%)

89

2015 2017

66

(85%)

20162014

45

71

63

(89%)40

(89%)

20132012

5

Cross-borderDomestic

Represents >70% of all pharma partnering



Partnering: Deals of Note 2017 (1)


Company A Company B Type Date Brief Description

F1 Oncology SunTerra Drug Jan.SunTerra Biotechnology in-licensed CAB CAR-

T candidates in China for $50M

AmoydxBoehringer-

IngelheimDiagnostic Jan.

Amoydx co-develops with BI on EGFR

mutations test in lung cancer

MisonixShandong

WeigaoDevice Mar.

Misonix signed an exclusive distribution

agreement with Shandong Weigao

Antengene Celgene Drug Apr.Antengene licensed oncology candidate CC-

223 from Celgene

3SBio Lilly China Drug May3SBio will promote and distribute Lilly's well-

established Humulin®

BeiGene Celgene Drug JulyBeiGene in-licensed and out-licensed

several drugs from and to Celgene for $1.4B

HitGen LEO Pharma Service Aug.HitGen collabrated with LEO pharm to

discover novel leads for multiple targets

Fosun Palatin Drug Sep.Fosun Pharma signed an agreement for China

rights to treatment from Palatin for $106M



Partnering: Deals of Note 2017 (2)


Company A Company B Type Date Brief Description

Innovent SIOC CAS Drug Sep.Innovent Biologics acquired global rights for a

IDO inhibitor from SIOC CAS for $457M

Amgen Simcere Drug Sep.Amgen collaberated with Simcere to co-develop

and co-market 4 bio-similar

Fosun Sandoz Drug Sep.Fosun paid $18M to buy Sandoz's couples of

drugs

Merro Astrazeneca Drug Oct.Merro entrusted Astrazeneca to produce four

generic drugs

XynomicBoehringer

IngelheimDrug Oct.

Xynomic in-licensed a RAF inhibitor from

Boehringer Ingelheim for $502M

HitGenBoehringer

IngelheimService Nov.

HitGen collabrated with Boehringer

Ingelheim, to identify novel leads

JanssenLegend

Biotech Drug Dec.

Janssen Biotech in-licensed a CAR-T candidate

from Nanjing Legend with a $350M upfront.

I-Mab Genexine Drug Dec.I-Mab Biopharma in-licensed a drug candidate

from Genexine for $504M

TIANJIN

BEIJING

Shenyang

LIAONING

SHANGHAI

JIANGSU

SHANDONG

Dalian

Nanjing

ZHEJIANG

Hangzhou

Suzhou

GUANGDONG

HONG KONGShenzhen

SHAANXI

Xi’an

Jinan

Qingdao

SICHUAN

Chengdu

CHONGQINGHUBEI

Wuhan

Taizhou

ShijiazhuangHEBEI

Guangzhou




ChinaBio® – Company Overview

ChinaBio® is focused exclusively on helping life science

companies and investors achieve success in China

© Copyright 2017 ChinaBio LLC26 © Copyright 2018 ChinaBio LLC

ChinaBio® Group

Your trusted partner in China life science™

ChinaBio® has helped companies raise over $500M in China

and identify over 1000 partnering opportunities


ChinaBio® Partnering Forum: 10th Anniversary!Largest int’l partnering conference in China…

What to Expect in 2018

Returning to Suzhou

− 1000+ attendees

− 1600+ 1-1 meetings

− 450+ companies

− 25+ countries

− 50+ presenting companies

− Suzhou BioBay, fastest

growing park in China

− Over 450 companies

www.ChinaBio2018.com


Thank you! 谢谢你！

Contact information:

Greg Scott, Founder

ChinaBio® Group

Shanghai | San Diego | Silicon Valley | Basel

China Tel: +86 21 5137 0751

US Tel: +1 858 859 1960

Email: [email protected]

Web: www.ChinaBio.com

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