Chi-Med Announces US$100 Million Equity Investment by CPP Investments

The Canada Pension Plan Investment Board (CPPIB), one of the world’s largest pension funds, has agreed to invest $100 million in Hong Kong-based Hutchison China MediTech (Chi-Med), a Nasdaq-listed biopharmaceutical company.

Under the agreement, the $300 billion pension fund will acquire Chi-Med shares at a price of $30 per American Depositary Share (ADS) via a private placement.

“This placement aligns with CPP Investments’ focus on providing strategic, long-term capital to industry-leading companies where we can participate in the future success of the business and help create greater value through ongoing partnerships,” said Agus Tandiono, managing director and head of Fundamental Equities Asia at CPP Investments.

Chi-Med, which has a portfolio of nine cancer drug candidates currently in clinical studies around the world, said it will use the proceeds to fund ongoing research and clinical development and support its commercialisation capabilities in both China and globally.

Listed on the Nasdaq Global Select Market and the London Stock Exchange’s AIM market, Chi-Med focuses on the discovery and global development of targeted therapies and immunotherapies for the treatment of cancer and immunological diseases.

The company has also developed a commercial platform that manufactures, markets, and distributes prescription drugs and consumer health products in China.

Chi-Med CEO Christian Hogg considers CPPIB’s investments as important and timely as the Hong Kong-based company plans to launch both surufatinib and savolitinib drugs in China during the next six months.

“CPP Investments’ focus on building long-term value and its experience in healthcare investing makes it an important global strategic partner to Chi-Med,” Hogg said.

Last June, Chi-Med sold $100 million worth of shares to New York-based growth equity firm General Atlantic.

Its revenue stood at $204.9 million in 2019, down 4.30 per cent compared to $214.1 million in 2018. The net loss attributable to Chi-Med reached $106.0 million last year, up 41.71 per cent from $74.8 million in 2018, show its latest financial results.

CPPIB, meanwhile, said in September that it continues to see interesting opportunities in Asia, its second-biggest market, particularly in the technology and healthcare sectors.

In an exclusive interview with CNBC’s Martin Soong and Sri Jegarajah recently, CPPIB CEO and president Mark Machin said China and India are showing interesting opportunities across both the equity and credit side of the business.