TIDMHCM
RNS Number : 3694T
Hutchison China Meditech Limited
24 March 2021
HUTCHMED Enters Agreement to Divest Non-Core OTC Joint Venture
for US$169 Million
- Allows focus on China and global clinical development and
market launches of
key Oncology/Immunology assets -
Hong Kong, Shanghai & Florham Park, NJ -- Wednesday, March
24, 2021: Hutchison China MediTech Limited ("HUTCHMED")
(Nasdaq/AIM: HCM) today announces that it has reached an agreement
with GL Mountrose Investment Two Limited, a company control led and
managed by GL Capital Group ("GL Capital"), to sell its entire
indirect interest in Hutchison Whampoa Guangzhou Baiyunshan Chinese
Medicine Company Limited ("HBYS"), a non-core and non-consolidated
over-the-counter ("OTC") drug joint venture business.
"HUTCHMED's focus is the discovery and development of novel
therapies in oncology and immunology. Over the past 20 years, we
have invested in establishing one of the leading innovation-driven,
global biopharmaceutical companies based in China," said Simon To,
Chairman of HUTCHMED. "The sale of our shares in HBYS, and exit
from the OTC drug arena, will allow us to focus our organization
and resources on our primary aim of accelerating investment in our
Oncology/Immunology assets in China and beyond."
Jeffrey Li, Founder and Chief Executive Officer of GL Capital,
said, "As a long-term shareholder and supporter of HUTCHMED, GL is
pleased to acquire its share in one of the best-known OTC
businesses in China. This transaction is in-line with GL's strategy
of building a leadership position in the OTC drug area to serve
patients' needs for self-medication and cost containment of their
overall healthcare budget."
The aggregate amount to be received by HUTCHMED of approximately
$169 million in cash represents about 22 times HBYS' adjusted net
profit attributable to HUTCHMED equity holders of $7.7 million in
2020[1]. Of the proceeds, approximately $127 million is related to
its shareholding in HBYS with the approximately $42 million balance
related to distributions of the previously announced land
compensation and prior year undistributed profits.
A deposit of $15.9 million is payable by GL Capital immediately
following signing of the agreement which will be credited against
the proceeds due on closing of the transaction. The transaction is
subject to regulatory approval in China and is expected to close in
mid-2021.
About HUTCHMED
HUTCHMED (Nasdaq/AIM: HCM) is an innovative, commercial-stage,
biopharmaceutical company committed, over the past twenty years, to
the discovery and global development of targeted therapies and
immunotherapies for the treatment of cancer and immunological
diseases. It has advanced ten cancer drug candidates from discovery
into clinical studies around the world and has an extensive
commercial infrastructure in its home market of China. For more
information, please visit: www.hutch-med.com.
About HBYS
HBYS was established in 2005 and focuses primarily on the
manufacture, marketing and distribution of proprietary OTC
pharmaceutical products. HBYS is HUTCHMED's non-consolidated joint
venture with Guangzhou Baiyunshan Pharmaceutical Holdings Company
Limited. HUTCHMED has a 50% interest in HBYS through a holding
company in which HUTCHMED has an 80% interest.
About GL Capital
GL Capital is a leading investment firm specializing in buyout
and growth opportunities in China's healthcare industry. The firm
has over US$2 billion under management across both public and
private equity, through USD and RMB-denominated funds.
Founded in 2010, GL Capital strives to be the partner-of-choice
for leading healthcare companies, generate superior investment
returns, and contribute to the sustainable development of China's
healthcare industry. For more information, please visit
www.gl-investment.com.
Forward-Looking Statements
This announcement contains forward-looking statements within the
meaning of the "safe harbor" provisions of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements reflect HUTCHMED's current expectations regarding future
events, including its expectations as to the anticipated amount of
proceeds, the intended use of proceeds and the anticipated closing
date of the proposed transaction. Forward-looking statements
involve risks and uncertainties. Such risks and uncertainties
include, among other things, assumptions regarding the amount and
timely receipt of the final land compensation, satisfaction of the
conditions precedent to the consummation of the proposed
transaction (including the ability of the parties to secure
regulatory approvals on the terms expected, at all or in a timely
manner), the ability of the parties to complete the proposed
transaction and the impact of the COVID-19 pandemic on general
economic, regulatory and political conditions. Existing and
prospective investors are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. For further discussion of these and other risks, see
HUTCHMED's filings with the U.S. Securities and Exchange Commission
and on AIM. HUTCHMED undertakes no obligation to update or revise
the information contained in this announcement, whether as a result
of new information, future events or circumstances or
otherwise.
Inside Information
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014.
CONTACTS
Investor Enquiries
Mark Lee, Senior Vice President +852 2121 8200
Annie Cheng, Vice President +1 (973) 567 3786
Media Enquiries
Americas - Brad Miles, Solebury Trout +1 (917) 570 7340 (Mobile)
bmiles@troutgroup.com
Europe - Ben Atwell / Alex Shaw, FTI Consulting +44 20 3727 1030 / +44 7771 913 902 (Mobile) / +44 7779
545 055 (Mobile)
HUTCHMED@fticonsulting.com
Asia - Joseph Chi Lo / Zhou Yi, Brunswick +852 9850 5033 (Mobile) / +852 97 83 6894 (Mobile)
HUTCHMED@brunswickgroup.com
Nominated Advisor
Freddy Crossley / Atholl Tweedie, Panmure Gordon (UK)
Limited +44 (20) 7886 2500
[1] HBYS' adjusted net profit attributable to HUTCHMED equity
holders (after 20% non-controlling interest) in 2020 of $7.7
million is a non-GAAP measure which is 40% of HBYS' 2020 net profit
of $91.3 million less $72.0 million gain on land compensation, net
of tax.
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