Chinese Biotechs Flex Financial Muscles With Continued Investments

China Investments

Chinese companies and investors continue to flex their financial muscles with a series of deals this week that highlight the continued growing impact that country is having on the global pharmaceutical and biotech landscape.

This morning Shanghai-based Alpha Biopharma Inc. secured $65 million in Series A funding that will be used to support a multi-center Phase II study of AZD3759, AlphaBio's lead product.

AZD3759 is a next-generation small molecule tyrosine kinase inhibitor (TKI). It is specifically designed to treat epidermal growth factor receptor (EGFR) mutation positive non-small cell lung cancer (NSCLC) patients with central nervous system (CNS) metastases.

In addition to advancing AZD3759, AlphaBio said the remaining proceeds from the Series A will be used to expand the company’s product pipeline. In its announcement, AlphaBio did not mention any particular acquisitions or licensing deals that could allow it to acquire a clinic-ready asset. Nor did the company mention taking any preclinical assets into the clinic.

In Phase I testing, orally administered AZD3759 demonstrated efficient penetration into the brain and cerebrospinal fluid, which could be beneficial in creating anti-tumor effects in EGFR mutation positive NSCLC patients with CNS metastases. AlphaBio said many tyrosine kinase inhibitors are not effective in targeting NSCLC patients with CNS metastases due to their poor ability to penetrate the blood-brain barrier. Because of that inability, metastatic tumor cells in the central nervous system are left unchecked and continue to proliferate.

AlphaBio’s Series A was supported by prominent Chinese venture capital firm Qiming Venture Partners, as well as TF Fund and the LYZZ Healthcare Venture Fund.

China has seen consistently strong growth in its pharma and biotech industries. China had a 2017 pharmaceutical market valued at $122.6 billion, according to data from health-care information company IQVIA (formerly QuintilesIMS). IQVIA data shows China’s pharmaceutical market is expected to grow to between $145 billion and $175 billion by 2022.

Not only is China seeing strong growth of its own biotech market, companies in China are also becoming strong investors in U.S. companies. This week Chinese investment firm Nan Fung Technology's Pivotal Beta helped lead a $100 million investment round in Boston-based Stealth Biotherapeutics, a company developing treatments for mitochondrial dysfunction.

The participation of Nan Fung Technology's Pivotal Beta highlights the growing importance of Chinese money in the U.S. market. Reenie McCarthy, chief executive officer of Stealth, noted the importance of the foreign investment and how that can potentially lead to opening up a market in China.  

“We particularly welcome our new investors' deep experience within the China healthcare market, which we view as an important frontier both for rare mitochondrial diseases under China's recent rare disease initiative, as well as for diseases of aging,” McCarthy said in a statement.

As a result of the investment, Chinese investor Vincent Cheung, the managing partner of Pivotal, will join the Stealth board of directors. Cheung said the Boston company’s mitochondrial therapeutic platform has the potential to “disrupt the current treatment paradigms for age-related indications.

Last week Shanghai-based WuXi AppTec became the lead strategic investor in Insilico Medicine, a Baltimore biotech startup that has developed a drug discovery process for pharmaceutical companies using artificial intelligence and deep learning.

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