Securities code: Betta Pharmaceuticals Co.Ltd(300558) securities abbreviation: Betta Pharmaceuticals Co.Ltd(300558) Announcement No.: 2022023
Betta Pharmaceuticals Co.Ltd(300558)
Supplementary announcement on investment in Wuhan Heyuan Biotechnology Co., Ltd. and related party transactions
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
Betta Pharmaceuticals Co.Ltd(300558) (hereinafter referred to as ” Betta Pharmaceuticals Co.Ltd(300558) ” or “the company”) held the 29th meeting of the third board of directors on March 4 to consider and adopt the proposal on investment in Wuhan Heyuan Biotechnology Co., Ltd. and related party transactions, The company plans to subscribe 20010395 ordinary shares of pre IPO series newly issued by Wuhan Heyuan Biotechnology Co., Ltd. (hereinafter referred to as “Heyuan biology” or “target company”) with its own capital of RMB 385 million at the price of RMB 19.24 per share (hereinafter referred to as “this investment”). Meanwhile, Hangzhou Beiming equity investment fund partnership (limited partnership), an affiliate of the company, plans to invest 80 million yuan to subscribe for 4158004 ordinary shares in the new pre IPO round of Heyuan biology at the same price. The transaction matters jointly invested by the company and its related parties have been announced and disclosed on the same day. For details, see http://www.cninfo.com.cn（ http://www.cn.info.com.cn. ）Announcement on investment in Wuhan Heyuan Biotechnology Co., Ltd. and related party transactions (Announcement No.: 2022019). In order to facilitate the majority of investors to further understand the relevant information, the supplementary explanations on this transaction are as follows:
Heyuan biology is a national high-tech enterprise specializing in the research and product development of plant derived recombinant protein expression technology. It focuses on the research and development of a class of innovative drugs. It is an unprofitable R & D biomedical enterprise. At present, a series of plant-derived innovative drug product pipelines represented by plant-derived recombinant human serum albumin injection (hy1001) have been developed. Three new drugs under development have entered the clinical trial stage, of which hy1001 has entered the phase II clinical trial stage. Dr. Yang Daichang, founder of Heyuan biology, has been deeply engaged in the field of rice endosperm expression system with remarkable scientific research achievements. He is an academic leader of many national scientific and technological research plans. Heyuan biological company has a clear positioning, specializing in the research and product development of rice derived recombinant protein expression technology. It has the core rice endosperm cell protein expression platform (oryzhiexp) and protein purification platform (oryzpur), and has formed recombinant proteins and recombinant cell growth factors and other products that can be used in different fields. Heyuan biology has successfully expressed recombinant protein drugs in three clinical stages and multiple preclinical stages, including recombinant human serum albumin. The innovative value of the expression system in drug research and development has been fully verified. In particular, Heyuan biology is the only company in the world that can use plant expression system to make recombinant human serum albumin into pharmaceutical injection grade (therapeutic biological products). Human serum albumin has a wide range of indications and a large clinical demand. According to the analysis of frost Sullivan, the batch issuance of human serum albumin in China increased steadily from 333.3 tons in 2015 to 619.9 tons in 2020; In 2020, the market scale of albumin therapeutic drugs in China will reach 25.8 billion yuan, and it is expected to reach 42.5 billion yuan in 2025, with a compound annual growth rate of 10.5%. However, at present, human serum albumin is only extracted from plasma, and the Chinese market is heavily dependent on imports. Imported human serum albumin accounts for about 60% of the Chinese market.
Therefore, the market demand for recombinant human serum albumin injection (hy1001), the core product of Heyuan biology, is clear. At present, the completed phase I clinical trials and some phase II clinical trials have preliminarily verified its effectiveness and safety. Hy1001 has lower cost than blood derived human serum albumin and strong market competitiveness. It is expected to gradually replace blood derived human serum albumin products after listing. The market space is enough to accommodate many competitors, and the commercialization prospect is expected.
In addition, the target company’s recombinant human lactoferrin lysozyme oral liquid (hy1002) is suitable for the treatment of infectious diarrhea in children caused by rotavirus and has anti diarrhea caused by bacterial infection. It is the first class I biological innovative drug for the treatment of infectious diarrhea.
Recombinant human for injection α 1-antitrypsin (botanical origin) (hy1003) obtained the FDA orphan drug design (odd) on February 19, 2020, and was approved by the FDA to enter the phase I clinical study on January 12, 2022.
The above products have clear clinical needs and good development potential.
The investment is priced according to the R & D characteristics and stage characteristics of innovative drugs in the pharmaceutical industry. In July 2021, Heyuan biology and 13 investors including Gongqingcheng Chengjing Heyi investment partnership (limited partnership) agreed to issue 27875943 RMB ordinary shares at an issue price of 12.78 yuan / share (the post investment valuation of the target company is 3.056 billion yuan). All the above investors have paid in and the target company has completed industrial and commercial changes. Combined with the current clinical progress of new drugs being developed by Heyuan biology, as well as the technical advantages and market potential of the product pipeline, and with reference to the previous round of financing valuation of unprofitable biomedical companies (see Table 1), the price of Heyuan biology’s current round of capital increase of 19.24 yuan per share (the pre investment valuation of the target company is 4.6 billion yuan) was jointly determined through friendly negotiation between all parties involved in the capital increase.
Table 1: summary of the valuation and R & D pipeline of the previous round of financing of the reference company before listing
Securities code company (abbreviated as main business financing) R & D pipeline during valuation financing
2162. HK konoya focuses on independent discovery and 781 million class I new drugs enter phase II clinical practice;
Development of innovative biotherapy $1 class I new drug into phase I clinical practice
Clover has developed new vaccines and 930 million class I new drugs to enter phase I clinical practice;
2197. HK biotherapy candidate product USD 1 vaccine enters phase II / III clinic;
One biological analogue entered phase III clinical trial
6.054 billion class I new drugs for therapeutic biological products have entered phase II clinical practice;
688062.sh Maiwei biological R & D, production and sales of RMB 1 class I new drug into phase I clinical practice;
Two biological analogues entered phase III clinical trial
Note: the above information comes from the disclosure of the prospectus and the query of Yaodu database, and only the independent R & D pipelines entering the clinical trial stage are counted.
To sum up, Heyuan biology has the independent core technology of plant derived recombinant protein expression technology research and product development, and has formed a relatively rich product pipeline. Among them, one class I new drug has entered phase II clinic, which has a broad market to replace imported drugs; Two class I new drugs have entered phase I clinic, and the market demand is clear. The valuation of the current trading target company is reasonable. The company’s participation in this investment can expand the company’s new drug innovation technology platform and speed up the company’s strategic layout in the field of disease treatment.
This investment in Heyuan biology is a joint investment between the company and related parties, and does not constitute a direct transaction of equity, assets and other assets between the company and related parties. The transaction follows the general commercialization principles of fairness, voluntariness and rationality. After the completion of this investment, Betta Pharmaceuticals Co.Ltd(300558) is expected to hold 7.60% of the minority equity of Heyuan biology, and has no control, joint control or significant impact on Heyuan biology. For the subsequent major progress of this transaction, the company will timely perform the obligation of information disclosure in accordance with relevant laws and regulations.
It is hereby announced.
Betta Pharmaceuticals Co.Ltd(300558) board of directors March 13, 2022
