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Temasek unit pares stakes in S Korean pharma firms for as much as S$1.36b


TEMASEK Holdings' unit Ion Investments on Wednesday said it is paring its stakes in two South Korean pharmaceutical companies but will remain a substantial shareholder in both.

Earlier on Tuesday, IFR reported that Ion is selling part of its stakes in Celltrion Inc, and the distributor of its products Celltrion Healthcare.

Citing a term sheet, IFR said that Ion, in a block deal worth up to 1.1 trillion won (S$1.36 billion), plans to sell up to 2.24 million shares in Celltrion for 336,700 to 347,800 won each, and up to 2.29 million shares in Celltrion Healthcare for 108,654 to 112,236 won each.

The pricing represents a discount of 6 to 9 per cent to their pre-deal close, said IFR, a Thomson Reuters publication.

Temasek's head, life sciences, Fidah Alsagoff, told The Business Times: "We have been invested in Celltrion and Celltrion Healthcare since 2010 and 2011, respectively, and have been very pleased with their progress during our investment. Within life sciences, biosimilars has been an area of focus for us, and Celltrion has clearly established itself as one of the global leaders in this field.

"As a long-term investor, Temasek reshapes and rebalances its portfolio from time to time, recycling capital for future investments. While we have entered into an agreement for a partial divestment, we are pleased to maintain our position as one of the largest financial investors in Celltrion and Celltrion Healthcare."

Celltrion develops and manufactures biosimilars, which are lower-cost laboratory-generated clones of higher-priced biological medicines. The company makes Remsima, used in the treatment of autoimmune diseases like Crohn's disease and rheumatoid arthritis, and Truxima to treat non-Hodgkin's lymphoma.

In Jan 30 this year, a Celltrion plant in Incheon, South Korea, that produces Inflectra, a biosimilar drug also used to treat autoimmune diseases, received a warning letter from the US Food and Drug Administration that cited significant violations of good manufacturing practice regulations.

In a statement on its website, dated Feb 1, Celltrion said it was making progress addressing the FDA's concerns and was committed to working with the agency "to fully resolve all outstanding issues with highest priority".

It added in the statement that the warning letter did not affect Celltrion's ability to manufacture and supply Inflectra products from its Incheon site and that the company did not currently anticipate any impact on the supply of the drug based on the warning letter. Celltrion also said it remained confident in the safety and efficacy of its products manufactured at the site.

Inflectra had worldwide sales of US$420 million last year, US$118 million of which was in the US where it competes against Johnson & Johnson's Remicade, according to industry news website FiercePharma.