Recently, NASDAQ listed company I-Mab announced that it has signed a final agreement with Tianjing Biotechnology (Hangzhou) Co., Ltd. (hereinafter referred to as "Tianjing Hangzhou") to integrate and restructure all of I-Mab's Chinese business, team, and pipelines with Tianjing Hangzhou's existing pipelines and assets, and divest its assets and business operations in China.
According to the agreement, Tianjing Biotechnology will transfer 100% equity of Tianjing Biotechnology (Shanghai) Co., Ltd. (hereinafter referred to as "Tianjing Shanghai") to Tianjing Hangzhou in a cashless and debt free manner, with a total transaction consideration not exceeding 80 million US dollars. It is understood that Tianjing Hangzhou is an unconsolidated affiliated company of Tianjing Biotechnology, while Tianjing Shanghai is a wholly-owned subsidiary of Tianjing Biotechnology, responsible for its business operations in China.
The China Business Daily reporter noticed that although the transaction price does not exceed 80 million US dollars, the actual amount of funds that Tianjing Biotechnology can obtain is still unknown and depends on the future regulatory and sales milestones of Tianjing Hangzhou.
A person familiar with the situation told reporters that the so-called $80 million Chinese asset consideration, paid based on future milestones, is just a big cake and difficult to fulfill.
Moreover, Tianjing Biotechnology not only transferred multiple core assets through this transaction, but also stepped down from the board of directors on February 10, 2024 to lead Tianjing Hangzhou.
Regarding the reasons for Tianjing Biotechnology's divestment of Chinese assets and subsequent development issues, our reporter recently sent a letter to Tianjing Biotechnology for an interview, but as of the time of publication, we have not received a response from the company.
Core pipeline assets transferred
Public information shows that Tianjing Biotechnology was founded in 2015, focusing on discovering, developing, and potentially commercializing highly differentiated immunotherapies and biologics for the treatment of cancer. In 2020, it landed on NASDAQ in the United States, and currently, no products have entered the commercialization stage.
According to the official website of Tianjing Biotechnology, as of November 2023, the company has a total of 6 pharmaceutical assets. The CD73 humanized monoclonal antibody, uliledlimab, ranks first, and the indication for the fastest progress is the combination therapy with treprilimab for non-small cell lung cancer.
The fastest clinical progress is with itan growth hormone α The former is currently undergoing Phase III clinical trials in China and is in the stage of NDA. According to the original plan, it will be submitted for listing in China in 2024; The latter is in registered phase III clinical practice.
The CD47 monoclonal antibody (lemzoparimab), which had previously gained market attention due to its collaboration with Abbott, was also placed at the bottom of the official website after being returned. Currently, only one indication for myelodysplastic syndrome is under research.
In addition, Tianjing Biotechnology has two new molecules in Phase I clinical trials, namely Claudin 18.2 x 4-1BB dual antibody (givastomig) and TJ-L14B (PD-L1/4-1BB) dual antibody.
It is reported that the transaction between Tianjing Biotechnology and Tianjing Hangzhou has been approved by the board of directors and is expected to be completed by the end of March 2024.
After the completion of this transaction, Tianjing Hangzhou will acquire Tianjing Biotech's pharmaceutical assets in China, including Itan growth hormone α、 The Greater China rights of CD38 humanized monoclonal antibody Fizetocumab, CD73 humanized monoclonal antibody Urilimab, Claudin18.2 x 4-1BB dual antibody, and CD47 monoclonal antibody, while bearing all future development costs of these assets, and responsible for the operation of Tianjing Biotechnology Shanghai R&D center and Tianjing Hangzhou production facilities.
Tianjing Biotechnology will retain its cash on hand, retain non Chinese rights to all clinical stage assets including Claudin18.2 x 4-1BB dual antibody, CD73 monoclonal antibody, and PD-L1/4-1BB dual antibody, as well as retain priority negotiation rights outside of Greater China related to candidate new drugs, and continue to be listed on NASDAQ.
Moreover, the agreement also stipulates that Tianjing Biotechnology (Hong Kong) Co., Ltd. (hereinafter referred to as "Tianjing Hong Kong"), a wholly-owned subsidiary of Tianjing Biotechnology, will transfer its equity in Tianjing Hangzhou to several participating shareholders of Tianjing Hangzhou in exchange for an existing repurchase obligation of approximately $183 million owed by Tianjing Hong Kong to such shareholders. According to business information, Tianjing Hong Kong holds a 3.1077% stake in Tianjing Hangzhou.
As the transfer of equity in Tianjing Hong Kong is expected to be completed by the end of March 2024, it is currently unknown to whom Tianjing Hong Kong will transfer its equity in Tianjing Hangzhou.
After the completion of the transaction, the total potential repurchase liability owed by Tianjing Hong Kong and Tianjing Biotechnology to non participating shareholders of Tianjing Hangzhou is expected to be $30-35 million, which includes actual or potential claims filed by non participating shareholders against Tianjing Hong Kong and Tianjing Biotechnology in legal proceedings related to the aforementioned transaction.
Who is the actual controller of the related party?
It is worth mentioning that in addition to divesting assets from the China region, Tianjing Biotechnology has also participated in the C1 round of financing for Tianjing Hangzhou.
On the same day that the above announcement of divestiture was released, the official official account of Haoyue Capital issued a document saying that Tianjing Hangzhou announced that it had completed the C1 round of financing of more than 500 million yuan, and Tianjing Biological subscribed for the equity of 19 million dollars in cash. After the completion of the transaction, Tianjing Biological would hold less than 10% of the shares of Tianjing Hangzhou directly or through Tianjing Hong Kong.
Other investors in this round of financing include Tai Long Investment, Zhejiang Province's "4+1" Health Fund, Hangzhou Qiantang Chengfa Technology Services Co., Ltd., Bruggemoon Limited, and Ningbo Kaitou Hanrun Capital.
According to Haoyue Capital, the integrated Tianjing Hangzhou will have 10 clinical stage projects (including two products, including Itan long-acting growth hormone, which will soon be submitted for market application in China), as well as 7 innovative drug projects in the preclinical or clinical application stage.
Not only that, Tianjing Biology also announced some management and personnel changes. Among them, Zang Jingwu will step down from the board of directors on February 10, 2024 and lead Tianjing Hangzhou.
It can be seen that after a series of operations, Tianjing Hangzhou has taken over Tianjing Biotechnology's business and pipelines in China, which is equivalent to a strategic restructuring.
As of now, Tianjing Biotechnology directly holds 5.6486% of the shares in Tianjing Hangzhou. According to business information, Tianjing Hangzhou was established in June 2019. In October 2020, the person in charge of the company (legal representative, person in charge, chief representative, executive of partnership affairs, etc.) was changed from Zhang Zheru to Zang Jingwu. Currently, Zang Jingwu remains the legal representative of Tianjing Hangzhou.
At present, there are more than 30 shareholders of Tianjing Hangzhou, among which Hangzhou Yijing Biotechnology Partnership (Limited Partnership) has become the largest shareholder of Tianjing Hangzhou with a shareholding ratio of 11.8918%. Hangzhou Yijing Biotechnology Partnership (Limited Partnership) is actually controlled by Qian Lili, who holds 50% of the company's equity.
Moreover, among the shareholders of Tianjing Hangzhou, Hangzhou Lanjing Biotechnology Partnership Enterprise (Limited Partnership), which ranks fifth in shareholding (5.9459%), is also actually controlled by Qian Lili, with a 95% stake of 9.975 million yuan in the company. This may mean that Qian Lili became the actual controller of Tianjing Hangzhou through indirect shareholding. The legal representatives of the two companies invested by Tianjing Hangzhou, Lanjing Biotechnology (Shanghai) Co., Ltd. and Yijing Biotechnology (Beijing) Co., Ltd., are also Qian Lili.