CSL Limited To Acquire Majority Stake In Chinese Plasma Fractionator Wuhan Zhong Yuan Rui De Biologicals Products
Published: Jun 13, 2017
MELBOURNE, Australia, June 12, 2017 /PRNewswire/ -- CSL Limited (ASX:CSL; USOTC:CSLLY) announced today that it has agreed to acquire 80 per cent equity of plasma-derived therapies manufacturer Wuhan Zhong Yuan Rui De Biological Products Co. Ltd. ("Ruide") from Humanwell Healthcare Group Co. Ltd. ("Humanwell"; Shanghai exchange: 600079) for US$352 million. The transaction will provide CSL with a strategic presence in the Chinese domestic plasma fractionation market and complements the leadership position that its CSL Behring business has built over the past 20 years as a provider of imported albumin in China.
Ruide develops, manufactures and commercialises plasma-derived products for the Chinese domestic market. This includes albumin, immunoglobulin (Ig) for IV injection, as well as several hyperimmune Ig products. The company also has an advanced pipeline of multiple coagulation factor products that it plans to launch in the coming years, including plasma-derived Factor VIII. In addition, Ruide owns four plasma collection centres and one manufacturing facility in Wuhan, Central China. Ruide's total revenues reached approximately US$30 million in 2016.
CSL Managing Director and Chief Executive Officer, Mr. Paul Perreault, said, "Humanwell is a leading Chinese healthcare company with strong capabilities in pharmaceutical manufacturing, sales and distribution, as well as healthcare services."
"CSL is driven by our promise to save lives and protect the health of people around the world. This expansion of our footprint in China through an investment in Ruide supports the delivery of this promise."
"We will contribute our extensive plasma manufacturing expertise with a goal to expand and grow plasma collection capabilities and introduce new products into this high-growth market. In co-operation with Humanwell, we intend to work closely with local regulators and the sector to help improve plasma safety and quality, as well as enhance the plasma donor experience. We will also continue to find ways to extend our partnership with Humanwell in areas of mutual interest."
Humanwell's Chairman, Dr Wang Xuehai, said, "We are excited to establish a long-term collaboration with CSL, a global leader in biopharmaceuticals, particularly in the plasma sector. Combining CSL's advanced technical capabilities with Ruide's established presence in the Chinese plasma sector will enable the partners to improve access to innovative therapies for patients that need them."
A strong foundation to expand CSL's therapeutic offering in China
China's plasma products market exceeded $3.3 billion in 2016, with a 15 per cent growth rate for the past five years1.China is also the fastest growing immunoglobulin (Ig) market in the world, and in volume, second only to the United States. Improved physician awareness and recent changes to reimbursement coverage for plasma-derived products such as Ig will continue to drive strong demand.
CSL has a long history of delivering plasma-derived medicines for the treatment of rare and serious diseases. Within the Ruide joint venture, CSL will have an opportunity to contribute capabilities across the full range of plasma products currently produced by CSL in markets outside China.
Transaction & Closing
Under terms of the agreement between the parties, CSL will be responsible for operational control of Ruide. The agreement includes a milestone based performance and payment mechanism to enable CSL to increase its ownership in Ruide over time. Closing of the initial 80 per cent stake is expected to occur in the second half of calendar year 2017, subject to regulatory approval by relevant government authorities and Humanwell shareholders.
The acquisition will be funded through CSL's existing debt facilities. The current share buy-back program announced at CSL's Annual General Meeting in October 2016 will not be impacted.
Humanwell is a fully integrated healthcare solution provider in China, with growing presence in Southeast Asia, North America and Africa. It is publically traded on the Shanghai Stock Exchange with revenues in excess of US$1.7 billion in 2016, and ranked in the top 30 pharmaceutical companies in China. It has a distribution network covering China with direct sales to 20,000 medical institutions and 30,000 pharmacies, and operates and manages multiple hospitals in China.
CSL (ASX:CSL; USOTC:CSLLY) is a leading global biotechnology company with a dynamic portfolio of life-saving medicines, including those that treat haemophilia and immune deficiencies, as well as vaccines to prevent influenza. Since our start in 1916, we have been driven by our promise to save lives using the latest technologies. Today, CSL - including our two businesses, CSL Behring and Seqirus - provides life-saving products to more than 60 countries and employs nearly 20,000 people. Our unique combination of commercial strength, R&D focus and operational excellence enables us to identify, develop and deliver innovations so our patients can live life to the fullest.
Media and analyst briefings
CSL's Chief Executive Officer, Mr Paul Perreault will host the following briefings today:
[9.00pm EDT] Analyst & media conference call
1800 908 299
Conference ID No:
NB: Media are invited to attend the analyst conference call for background detail on a 'listen only' basis. Questions will be taken at the Media Conference Call directly following the Analyst call.
[10.00pm EDT] Media conference call for Q&A with Paul Perreault
1800 908 299
+612 9007 8048
Conference ID No:
A copy of the investor presentation slides relating to the announcement will be lodged with the Australian Securities Exchange and is also available at www.csl.com.au in the 'investor' section.
1. Goldman Sachs Equity Research Report 'Building China's Blood Bank' May 30, 2017.
® Trademarks of CSL Limited or its affiliates.
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