3SBio Scraps $290 Million Canadian Pharma Purchase

Drugmaker 3SBio Inc. said it has scrapped a $290 million plan to buy the contract development and manufacturing (CDMO) business of Canada’s Therapure Biopharma Inc., killing a deal that was part of a budding wave of similar purchases by Chinese firms hungry for foreign know-how.

3SBio, a formerly New York-listed company that later privatized and relisted in Hong Kong, announced it was abandoning the joint bid that it made in September through a joint venture with CPE Funds, according to an announcement on its website. The original agreement had a closing deadline of April 30, which the two sides failed to meet, 3SBio said in a brief statement dated May 1.

3SBio envisioned Therapure as a platform for launching its products and licensing other technology in the North American market.

“The asset purchase agreement failed to meet certain conditions before (the deadline) and the buyer and seller didn’t extend the agreement,” the statement said. “The asset purchase agreement has expired, and the buyer has already notified the seller that the deal has been terminated as of May 1.”

3SBio did not elaborate on specific conditions that caused the deal to collapse, but said the development was unlikely to have any major impact on its own business or finances.

The company first announced its plan to buy Ontario-based Therapure’s CDMO business eight months ago, with Chinese private equity investor CPE as the other financial backer. CDMOs provide drug-development services to pharmaceutical companies on a contractual basis.

The deal had included plans for construction of a new commercial facility as part of a larger plan to expand the acquired business’s capacity. 3SBio had touted the deal as part of its global expansion plan, with the company initially aiming to quickly close the deal by the end of last year.

The deal would have become one of the larger ones in a young wave of similar acquisitions of foreign drugmakers by Chinese companies eager to boost their geographic and technical reach. One of the most aggressive from that group has been Shanghai Fosun Pharmaceutical Group Co. Ltd., the drug arm of one of China’s most successful private equity investors. Last year Fosun Pharma made one of its largest offshore purchases to date when it bought 74% of India’s Gland Pharma for about $1.1 billion.

As a major developer of biotech drugs, 3SBio is best known for its rheumatoid arthritis injection Yisaipu, also known as Etanercept, which dominated the domestic market with a share of 62.7% last year. In 2014, it bought Sirton, a contract-based pharmaceutical manufacturer in Italy. It has also secured the exclusive licensing rights for four AstraZeneca products in China.

The company has also made use of foreign capital markets, becoming the first Chinese firm from its category to be listed on the Nasdaq Stock Market in 2007. It delisted from New York six years later, and relisted in Hong Kong in 2015, raising HK$5.5 billion ($701 million).

Contact reporter Yang Ge (geyang@caixin.com)