On February 7th, Tianjing Biotechnology announced the divestment of its assets in China. Under the strategy of Tianjing Biotechnology's transformation into an American biotechnology company, Tianjing Biotechnology's Chinese subsidiary has reached an agreement with Tianjing Biotechnology (Hangzhou) Co., Ltd. (hereinafter referred to as "Tianjing (Hangzhou) Company") to transfer Tianjing Biotechnology's assets and operating rights in China, which will be managed by Tianjing (Hangzhou) Company in the future. Tianjing (Hangzhou) Company will be an unconsolidated subsidiary of Tianjing Biotechnology.
The Chinese subsidiary mentioned in the press release on the official website of Tianjing Biotechnology refers to Tianjing Biotechnology (Shanghai) Co., Ltd. (hereinafter referred to as Tianjing (Shanghai) Company), which is a wholly-owned subsidiary of Tianjing Biotechnology. Previously, the business operated by Tianjing Biotechnology in China was handled by Tianjing (Shanghai) Company.
Currently, as Tianjing (Shanghai) Company has agreed to transfer 100% of its equity to Tianjing (Hangzhou) Company, it has resulted in Tianjing Biotech divesting its assets in China.
Divestment of domestic assets
According to the news release on the official website of Tianjing Biotechnology, the total consideration for this equity transaction can reach up to 80 million US dollars, and the final amount will be determined by the milestone events that Shitianjing (Hangzhou) Company will achieve in the future; In addition, Tianjing Biotechnology will retain the priority negotiation right with three candidate drugs under research outside of Greater China.
On February 8th, regarding the changes between the aforementioned enterprises, Tianjing Biotechnology told Interface News that this strategic restructuring is not only the best strategic choice for the current development stage of the company, but also the best strategic choice in the context of the China US market environment; In the future, listed company I-Mab will develop according to the growth path of American biotech, while Hangzhou will develop according to the growth path of Chinese biotech. Both parties will achieve maximum value without restricting each other; At the same time, the investor structure is more aligned with their respective markets and better avoids investment risks in Chinese concept stocks, which is conducive to the valuation return of listed companies.
From the current trend of "relocation" among companies, there are a total of three companies involved in this incident - Tianjing Biotechnology, Tianjing (Shanghai) Company, and Tianjing (Hangzhou) Company. Among them, I-Mab. US is a NASDAQ listed company, which was listed on January 17, 2020. According to Tianyancha, Tianjing (Shanghai) Company and Tianjing (Hangzhou) Company were previously controlled by Tianjing Biotechnology Hong Kong Limited.
Also on February 7, the official official account of Haoyue Capital issued a document saying that Tianjing (Hangzhou) Company announced to complete C1 round of financing of more than 500 million yuan. This round of financing was jointly invested by Tailong Investment, Zhejiang "4+1" Big Health Fund, I-Mab, Hangzhou Qiantang Chengfa Technology Service Co., Ltd., Bruggemoon Limited, and Ningbo Kaitou Hanrun Capital.
Haoyue Capital is the exclusive financial advisor for this transaction. If we look at this matter from the perspective of Tianjing (Hangzhou) Company, the company has actually taken over Tianjing (Shanghai)'s business and pipelines, or carried out a strategic restructuring, surrounded by a group of capital.
According to Haoyue Capital, the integrated Tianjing (Hangzhou) company will have 10 clinical stage projects (including 2 products including Itan long-acting growth hormone that are about to be submitted for market application in China), as well as 7 innovative drug projects in the preclinical or clinical application stage. However, Haoyue Capital did not further introduce these product pipelines.
However, behind the press release and response, it is difficult to conceal the fact that the business progress of this former star innovative pharmaceutical company has been continuously hindered, its value has been declining, and it has ultimately had no choice but to sell its assets. Compared to many innovative pharmaceutical companies that lay off employees, cut pipelines, and sell products in order to survive, Tianjing Biotech's choice may be more radical.
Continuous setbacks in R&D and capital markets
In the past round of innovative drug capital dividend cycles, Tianjing Biotechnology was once one of the most closely watched companies in the industry.
Zang Jingwu founded the predecessor of Tianjing Biotechnology, Sanjing Biotechnology, in 2015. Subsequently, with the help of Kangqiao Capital, Sanjing Biotechnology merged with Tianshi Zhen to form Tianjing Biotechnology. Before launching its "A+H+N" IPO plan in 2021, Tianjing Biotechnology had already raised over $500 million in medical, health, and biotechnology capital from China and globally, equivalent to approximately RMB 3.23 billion at that time.
These investors include Kangqiao Capital, Tianshili Holdings Group, Hongyi Investment, Hillhouse, Houpu Capital, Dinghui Investment, Huiqiao Capital, and so on. Among them, Kangqiao Capital is the main organizer of Tianjing Biotechnology. In June 2018, Tianjing Biotechnology raised approximately $220 million in Series C financing, making it one of the largest Series C financing in the field of innovative drugs in China at that time.
Meanwhile, Zang Jingwu, the founder of Tianjing Biotechnology, is also a topic figure in the industry, but the focus on him is not glamorous. On June 11, 2013, the internationally renowned pharmaceutical company GlaxoSmithKline (GSK) issued a statement admitting that there had been data fraud in China's research and development centers.
According to the First Financial Daily, after GSK launched an investigation, the five Chinese scientists involved were taken relevant actions - "One of them has been dismissed, one has submitted a resignation report, and the other three are in an administrative resignation state, waiting for the final review result."
GSK explicitly stated in the statement that "Dr. Zang Jingwu is no longer working at GSK." At that time, Zang Jingwu was the head of GSK's China R&D center. After leaving GSK, Zang Jingwu went to Xiansheng Pharmaceutical and had entrepreneurial opportunities after being responsible for the innovative drug platform Baijiahui of Xiansheng Pharmaceutical.
After completing its listing, although Tianjing Biotechnology had a major deal with Abbott, it continued to suffer setbacks afterwards.
The product pipeline of Tianjing Biotechnology is mainly built in the fields of tumor immunity and autologous immunity, and there are no products on the market so far. As of November 2023, the core pipelines of Tianjing Biotechnology include: Ulerizumab (CD73 monoclonal antibody), Givastomig (Claudin 18.2 x 4-1BB dual antibody), TJ-L14B (PD-L1 x 4-1BB dual antibody), Itan Growth Hormone (long-acting growth hormone), Fizetocumab (CD38 monoclonal antibody), and Lezoritumab (CD47 monoclonal antibody).
But in September 2023, Tianjing Biotechnology's Lezumab was returned by Abbott, and as a potential partnership with cumulative revenue of up to 2.9 billion US dollars, Lezumab was one of the largest authorized external collaborations announced by a Chinese biotechnology company at that time.
Moreover, on July 8, 2022, MacroGenics announced on its official website the termination of the phase 2 clinical trial (CP-MGA271-06) of B7-H3 monoclonal antibody Ibrutuzumab. On July 11, 2019, Tianjing Biotechnology reached a partnership with Macro Genics for an exclusive clinical development and sales rights of Ibrutuzumab in the Greater China region, with a down payment of $15 million, potential development and registration milestone payments of no more than $135 million, and annual net sales revenue sharing, and participated in MacroGenic's global clinical research and development.
On July 13, 2022, Tianjing Biotechnology replied to the news reporter on the interface, stating that Tianjing Biotechnology is not the sponsor of the aforementioned clinical trial, and there are no Chinese patients participating in this trial. Nevertheless, the incident continued to ferment.
But the undeniable fact is that even though Tianjing Biotechnology once held multiple star targeted new drugs, to this day, it has not successfully pushed any of its innovative drugs to the market stage. Despite continuous R&D investment, Tianjing Biotechnology has fallen into a situation that innovative pharmaceutical companies are least willing to see, as it is unable to achieve commercial returns.
In the secondary market, in September 2020, the average stock price of Tianjing Biotechnology was approximately $38.4 per share. On June 30, 2021, Tianjing Biotechnology reached $85.4 per share during trading. Since then, the overall stock price of Tianjing Biotechnology has shown a downward trend. Currently, there is only $2 per share, with a market value of only $165 million remaining. At its peak, its market value exceeded 7 billion US dollars.
Previously, there have been multiple rumors that Tianjing Biotechnology plans to list on the Science and Technology Innovation Board and the Hong Kong Stock Exchange. For example, according to media reports such as IPO early knowledge, on July 29, 2021, Tianjing Biotechnology signed a listing guidance agreement with CICC and filed with the Shanghai Securities Regulatory Bureau to list on the Science and Technology Innovation Board. It was originally expected to be completed in 2022. At the same time, Jay Chou, then Chief Financial Officer (CFO) of Tianjing Biotechnology, stated on July 27, 2021 that Tianjing Biotechnology's plan to dual list on the Hong Kong Stock Exchange and Shanghai Stock Exchange is making substantial progress.
But there is no further news about these secondary listings.
After 2022, news of Tianjing Biotechnology seeking to be acquired has also been repeatedly circulated. An investment bank insider once revealed this to Interface News reporters, stating that Tianjing Biotechnology is "asking a very high price.". In contrast, the highest transaction price for Tianjing Biotechnology's divestment of domestic assets was only $80 million.
On April 24, 2022, industry media E Pharmaceutical Manager reported that Zang Jingwu, founder of Tianjing Biotechnology, responded, "This is a market speculation, and the company's consistent policy is not to comment on market speculation.".