Investment Group Just Paid $605 Million for This Bay Area Pharma

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June 8, 2017
By Mark Terry, Breaking News Staff

SciClone Pharmaceuticals , located in Foster City, Calif., agreed to be acquired for $605 million by a consortium of buyers. The consortium is made up of GL Capital Management CP, Bank of China Group Investment, CDH Investments, Ascendent Capital Partners and Boying.

SciClone is a specialty pharmaceutical company with significant commercial business in China. Its portfolio covers oncology, infectious diseases and cardiovascular disorders. Its lead product is Zadaxin (thymalfasin) for hepatitis B, hepatitis C and some cancers, and is approved in over 30 countries.

The Buyer Consortium that is acquiring the company will buy all the outstanding shares of SciClone for $11.18 per share in cash. It will be funded by the consortium via a combination of equity financing and debt financing. The $605 million figure is a premium of about 11 percent over its stock price on June 7, and a premium of more than 16 percent over its 10-day volume-weighted average closing stock price. The bid was first announced in November 2016.

“The Board has determined that a sale of the Company at this time is the best way to deliver meaningful value to SciClone’s stockholders,” said Jon Saxe, SciClone’s chairman of the board, in a statement. “While SciClone has executed well on its growth strategies to date, following continued review of its strategic alternatives, the Board has determined that the challenges of continuing to operate as an independent U.S.-based, publicly traded company in the complex, competitive and increasingly price-sensitive China pharmaceuticals market represents long-term risks to the Company’s ability to maintain a strong growth trajectory and to meet its financial objectives. This agreement enables SciClone stockholders to achieve substantial cash value and premium to the Company’s recent trading price in the near term and eliminates exposure to long-term risk and uncertainty.”

On May 10, the company reported its first-quarter financial results. It announced first-quarter revenues of $42.9 million, an 18 percent increase from $36.5 million from the same period the year before. First period Zadaxin revenues were $39.5 million, up 17 percent from $33.6 million in the first quarter of 2016.

“We delivered a strong first quarter performance, in line with our expectations, and reflecting the continued demand for, and growth potential of, Zadaxin and our core business,” said Friedhelm Blobel, SciClone’s chief executive officer, in a statement. “Zadaxin’s competitive position remains strong, with continued volume growth despite generic competition. Zadaxin’s double-digit volume growth rate continued this quarter, underscoring its strength as the leading branded thymalfasin, with a 17 percent volume share and more than a 40 percent value share. We do face continued pricing pressure, with tenders in two provinces recently announced at prices lower than the reference price with our distributor. We cannot determine at this time with certainty when these prices will take effect, or when they will impact prices in other provinces, but we are likely to experience some effect of those lower prices at some point during the next few quarters. We may also see some pressure on unit volumes in some areas as a result of reduced national-level reimbursement for thymalfasins.”

SciClone Pharmaceuticals is currently trading for $10.90.