3SBio snaps up Therapure CDMO for $290M
- 3SBio, via a joint venture with Chinese asset management firm CITPE, has signed an asset purchase agreement with Therapure Biopharma to buy the contract development and manufacturing business Therapure Biomanufacturing. The joint venture will also gain certain rights to plasma products and technology for the Chinese market.
- The CDMO will retain the Therapure brand and will be led by Therapure’s CEO Nick Green and the current senior management team at its manufacturing facilities located in Ontario. The plasma protein and therapeutic products business will become a separate company, under the ownership of the Catalyst Capital Group, and will get at least CAD $20-25 million ($16.2 to $20.2 million) from the joint venture to construct a new commercial facility.
- The acquisition is worth 30 times Therapure's CDMO price-earnings ratio in the financial year 2016, and will be paid for in cash and $100 million debt financing. It has boosted the Chinese company's stock value by 5%. Transaction closure is expected to be at least eight weeks from signing the contract.
Therapure Biomanufacturing's client based is largely in Europe and North America, focusing largely on small and medium pharma companies that lack manufacturing capabilities, CEO Nick Green said on a conference call. Acquiring Therapure's CDMO assets, including its Canadian facilities for cGMP manufacturing both upstream and downstream, moves the Chinese company into the North American biopharma sector, and is part of 3SBio's move to accessing patients worldwide.
"This is a key milestone of the global expansion strategy of our biologics manufacturing business, adding a high quality asset and leadership team in Canada that will serve as a platform for growth. Over 340 biologics professionals in North America focusing on operations and management, market development, R&D and manufacturing are expected to join 3SBio, which is a big step forward in our strategy to expand our talent pool and establish global presence," said Jing Lou, chair of 3SBio.
According to Lou, the deal will integrate 3SBio's mammalian cell culture capabilities, and Therapure's downstream purification and plasma source technologies, along with the monoclonal antibody production and contract manufacturing at 3SBio's subsidiaries Sunshine Guojian and Sirton.
Jefferies analyst Eugene Huang remained a little skeptical, suggesting that while the deal might lift 3SBio's valuation, he sees a lack of synergy. "We are concerned for an uncertain EPS accretion given the CB dilution, a lack of synergy between 3SBio's existing drug manufacturing and Therapure's CMO line, and a disadvantage as compared to Wuxi due to a lack of CRO capability," the analyst wrote in a note to clients.
Also on the call, 3SBio management predicted a launch of its long-acting erythropoietin in three to four years, and decisions over resubmission of its Herceptin biosimilar by the end of 2017.
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