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Prometic, Shenzhen to set up JV for 3 drugs in China

ProMetic Life Sciences Inc. and Shenzhen Royal Asset Management Co. Ltd. seek to establish a joint venture to develop, manufacture and commercialize three drugs in China, excluding Hong Kong, Taiwan and Macau.

Prometic will license the rights for investigational drugs PBI-4050, PBI-4547 and PBI-4425 for the Chinese market with an initial focus on diabetic kidney disease, lung and liver fibrosis to a newly formed unit, to be named Prometic ChinaCo.

Shenzhen will provide C$23 million in 2017 — C$13 million up front and C$10 million in the second half of this year — to secure an initial 17% ownership of the new unit. It will also have the right to increase ownership up to 25%, with an additional C$10 million investment related to milestones expected in 2018.

Prometic will use the funds from Shenzhen to support and further the clinical development of the drugs outside China, which also contributes to de-risking the clinical and regulatory approval process for China.

The companies expect Prometic ChinaCo to enter into additional partnering and licensing transactions to further leverage the value of the product portfolio in China and provide additional funding.

Prometic ChinaCo will control bulk manufacturing of the active pharmaceutical ingredient of the three drug candidates in China to supply to sublicensees. As a result, its revenue stream will include sales of the bulk active pharmaceutical ingredient to sublicensees as well as royalties on sales of the three drugs in China.