HUTCHMED, a commercial-stage biopharmaceutical company, announced that it is divesting a 45% equity interest stake in Shanghai Hutchison Pharmaceuticals Limited (SHPL) for about $608 million (RMB 4,478 million) in cash to GP Health Service Capital Co. and Shanghai Pharmaceuticals Holding.
Shanghai Hutchison Pharmaceuticals is a joint venture formed by HUTCHMED and Shanghai Pharmaceuticals to create treatments for cardiovascular diseases.
These deals would enable HUTCHMED to focus on its core business of discovering, developing, and commercializing novel therapies for treating cancers and immunological diseases, such as advancing its next-generation antibody-targeted therapy conjugate programs.
SHPL primarily focuses on manufacturing and distributing its own-brand prescription medicines in China, predominantly for cardiovascular diseases. And SHPL is a 50:50 joint venture established between HUTCHMED and Shanghai Pharma in 2001. In 2023, the consolidated net income attributable to HUTCHMED from SHPL was $47.4 million. HUTCHMED does not consolidate revenue from SHPL.
HUTCHMED plans to invest the proceeds from these transactions to develop its internal pipeline further and drive its core business strategy forward. And this pipeline and strategy include its next-generation antibody-drug conjugate (ADC) platform, building on HUTCHMED’s extensive knowledge from pursuing oncological pathways and proven expertise in small molecule targeted therapeutics.
By combining antibodies with targeted therapeutics instead of cytotoxins, these antibody-targeted therapy conjugates (ATTCs) provide dual mechanisms for addressing a target. Pre-clinical research has shown that anti-tumor activity with a durable response following a single administration and stronger anti-tumor activity compared to administration with the individual antibody and targeted therapy components improve the tolerability associated with targeted therapy. And HUTCHMED plans to move the first ATTCs into clinical trials in the second half of 2025.
HUTCHMED is one of two health-focused companies within CK Hutchison Holdings, headed by Hong Kong-based billionaire Li Ka-Shing. The other one is the biotech company CK Life Sciences, which focuses on creating cancer therapies.
HUTCHMED expects to record a gain of about US$477 million before taxation. And the actual gain to be recorded is subject to review and audit.
KEY QUOTES:
“This transaction to divest most of our holding in SHPL is another example of HUTCHMED delivering on the strategy outlined in 2022, accelerating our path to profitability and focusing on core operations. SHPL is a well-established business, having delivered over US$370 million in dividends to HUTCHMED throughout the years, and we are confident that it continues to have promising future growth prospects. We are focused on capitalizing on our two decades of deep research into oncogenic drivers of disease and discovering and developing highly optimized therapies, through our unique ATTC platform.”
- Dr. Dan Eldar, Chairman and Non-executive Director of HUTCHMED
“We continue to invest in our prolific in-house R&D platform, including our new ATTC programs that we believe have significant potential impact on the treatment of cancers. This divestment brings us additional resources and further focus.”
“Our continual approach to engineer our own innovative, highly selective drug candidates has delivered several medicines with enhanced selectivity and limited off-target activity, allowing sustained target inhibition and flexibility for use as part of combination therapies. We also gained substantial knowledge of these oncogenic pathways, and the issues involved in addressing them. In contrast to traditional cytotoxin-based ADCs, we believe that our antibody-targeted therapy synergistic approach may also be combinable with immunotherapy- or chemotherapy-based frontline standards of care, could overcome chemotherapy resistance, and could avoid cytotoxin-related toxicities that limit long-term administration. This platform also maximizes on our long history of addressing patients with genetic drivers, who benefit less from traditional ADC therapies.”
- Dr. Weiguo Su, Chief Executive Officer and Chief Scientific Officer of HUTCHMED
