Leidi.com Lei Jianping June 4th
Sichuan Kelun Botai Bio-Pharmaceutical Co., Ltd. (referred to as "Kelun Botai") recently passed the hearing and is preparing to be listed on the Hong Kong Stock Exchange.
Annual loss of 600 million
Kelun Botai Bio is an innovative biopharmaceutical company and a global ADC developer. The so-called ADC refers to the abbreviation of antibody-drug conjugate (antibody-drug conjugate), which is formed by linking a monoclonal antibody targeting a specific antigen and a small molecule cytotoxic drug through a linker.
ADCs consist of three main parts: antibodies responsible for selectively recognizing surface antigens on cancer cells, drug payloads responsible for killing cancer cells, and linkers that connect antibodies and payloads. The recognition of the antigen by the ADC leads to the entry of the ADC into the cell through the endocytic pathway, and after degradation by the lysosome, the payload is released in a biologically active form and exerts its effect, resulting in the death of cancer cells.
Due to the powerful killing effect of traditional small molecule chemotherapy and the tumor targeting of antibody drugs, ADC has become one of the fastest-growing cancer treatments in recent years. However, due to the highly complex technology required to design and produce balanced drugs, ADCs pose a major scientific challenge to researchers. From the approval of the first ADC (Mylotarg) in 2000, the development accelerated in 2019. So far, a total of 12 ADCs have been approved by the FDA Approved for the treatment of solid tumors, including Enhertu in 2019, Padcev in 2019 and Trodelvy in 2020, etc.
On December 22, 2022, Kelun Biotech and Merck signed a cooperation agreement. Kelun Biotech will grant seven different preclinical ADC candidates in its pipeline to Merck in the form of a global exclusive license or an exclusive license option. Research, development, manufacturing and commercialization within or outside mainland China, Hong Kong and Macau.
The total amount of cooperation between Kelun Botai and MSD is nearly 11.8 billion US dollars, involving 9 innovative drugs.
Kelun Botai's revenue in 2021 and 2022 will be 32.32 million yuan and 804 million yuan respectively; gross profit will be 11.797 million yuan and 527 million yuan respectively; operating losses will be 777 million yuan and 419 million yuan respectively; attributable to equity shareholders The losses during the year were 890 million yuan and 616 million yuan respectively.
The reason for the large loss of Kelun Botai is the high research and development expenses. Among them, Kelun Botai's research and development expenses in 2021 and 2022 are 728 million yuan and 846 million yuan respectively.
As of December 31, 2022, Kelun Botai held cash and cash equivalents of 92.96 million yuan.
Post-investment valuation of 10 billion
Liu Gexin, chairman of the board of directors and non-executive director of Kelun Botai Biotech, and Dr. Ge Junyou and Dr. Wang Jingyi as executive directors; Liu Sichuan, Feng Hao, Zeng Xuebo, and Li Dongfang as non-executive directors; Dr. Zheng Qiang, Dr. Zheng Qiang, and Dr. Tu Wenwei, Dr. Jin Jinping, Dr. Li Yuedong.
Among them, Liu Sichuan is the son of Liu Gexin.
In May 2021, Kelun Botai Biotech completed its Series A financing of RMB 512 million. Investors included Wealthy Linkage, Advanced Manufacturing Industry Investment Fund Phase II, LAV Kecheng, Suzhou Likang and Hillhouse Liangheng; among them, Wealthy Linkage subscribed for US$35 million.
On January 3, 2023, Kelun Biotech, Kelun Pharmaceutical and other shareholders of the company at that time entered into a share subscription and debt-for-equity swap agreement, pursuant to which Kelun Pharmaceutical agreed to further subscribe for a total of 51,255,685 shares at a total subscription price of 2.65 billion yuan, of which 2.5 billion yuan will be settled in the form of debt-to-equity swaps, and 150 million yuan will be settled in cash on January 16, 2023.
Kelun Botai Biological B round investors include Merck, Wealthy Linkage, Advanced Manufacturing Industry Investment Fund Phase II, Leyue Capital, Kexinlunda, Cinda Capital, Gygnus Real, Shangyingxingling, Emerging Industry Fund, Wutong Juke, Anling Weijian, Zhou Youcai and Longyi Technology.
On January 3, 2023, Kelun Botai Biology, Kelun Pharmaceutical, Employee Incentive Platform, Dr. Wang Jingyi, Liu Gexin (in his capacity as the actual controller of the company), Ningbo Daoyi, investors in the A round and B round investors Round investors entered into a series of share subscription agreements. According to the B-round share subscription agreement, B-round investors agreed to subscribe for a total of 26,076,205 shares (B-round financing) at a total subscription price of 1.348 billion yuan.
The B-round financing of Kelun Botai Biotech was 1.348 billion yuan, of which, Merck Sharp & Dohme LLC (Merck Sharp & Dohme LLC) subscribed for 100 million US dollars, and the second phase of the advanced manufacturing industry investment fund subscribed for 100 million yuan.
In June 2020, Kelun Botai Biotech’s cost per share in the Pre-A round of financing was 3 yuan, and after a while it was 313 million yuan; in May 2021, the cost per share in the A round was 43.19 yuan, and the post-investment valuation was 5 billion In February 2023, when the B round of financing was completed, the cost per share was 51.7 yuan, and the valuation was 10 billion yuan.
Merck and IDG Capital are shareholders
As of the Latest Practicable Date, Kelun Pharmaceutical directly owns approximately 59.75% of the equity interest in the Company.
Kelun is a highly specialized and innovative pharmaceutical group with an annual sales revenue of more than 40 billion yuan. Kelun KAZ Pharmaceutical Co., Ltd. (Kelun, Kazakhstan), Sichuan Kelun Pharmaceutical Trade Group Co., Ltd. and more than 100 enterprises at home and abroad.
Sichuan Kelun Pharmaceutical Co., Ltd. was listed on the Shenzhen Stock Exchange in June 2010. Immediately, it launched a 10 billion industrial investment plan and began to implement the development strategy of "three developments, innovation and growth".
The first engine is to maintain Kelun’s leading position in the field of infusion through continuous industrial upgrading and product structure adjustment; the second engine is to build intermediates, raw materials to preparations through innovative development and utilization of high-quality natural resources The antibiotic competitive advantage; the third engine is to accumulate the ultimate driving force for the everlasting enterprise through the construction of research and development system and diversified technological innovation.
The employee incentive platforms of Kelun Botai Bio, namely Kelun Huicai, Kelun Huineng, Kelun Huizhi and Kelun Huide directly own approximately 15.52% of the total issued share capital of the Company. Kelun Jingchuan (a wholly-owned subsidiary of Kelun Pharmaceutical) is the general partner of the respective employee incentive platforms of Kelun Botai Biotech.
Therefore, Kelun Pharmaceutical has the right to exercise the voting rights attached to the shares held by Kelun Botai Biological Employee Incentive Platform. Therefore, Kelun Pharmaceutical can exercise approximately 75.27% of the voting rights attached to the company's shares.
In addition, Dr. Jingyi holds 2.95% of the shares, Merck holds 6.95%, Wealthy Linkage holds 3.76%, and Leyue Capital holds 1.04%. Wealthy Linkage and Leyue Capital are companies managed by IDG Capital.
Advanced Manufacturing Industry Investment Fund Phase II holds 3.69% of the shares, Ningbo Daoyi holds 2.17%, Kexin Lunda holds 1.20%, Cinda Capital, Suzhou Likang, and Zhou Youcai hold 0.2% respectively, and LAV kecheng holds 0.2% 0.4%, Zhuhai Liangheng holds 0.12%, and Wutong Juke holds 0.32%.
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