Date: 2013-05-13
Type of information: Joint-venture agreement
Compound: Kinnovata Pharmaceutical
Company: Vectura (UK) Tianjin KingYork Group (China) Zendex Bio Strategy
Therapeutic area: Respiratory diseases
Type agreement: joint-venture
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Disease:
Details: * On May 13, 2013, Vectura Group has announcec that it has established Tianjin Kinnovata Pharmaceutical Company Limited (\"Kinnovata\") in China with two partners; Tianjin KingYork Group Company Limited (\"KingYork\"), a leading Chinese pharmaceutical company and specialist manufacturer of corticosteroid based products, and Zendex Bio Strategy Inc (\"Zendex\"), a private equity investor based in Hong Kong.
Kinnovata will develop, manufacture and commercialise respiratory products for the rapidly growing domestic Chinese and other regional markets in Asia. This new Company will initially exploit Vectura\'s Clickhaler® and Duohaler® dry powder inhaler (DPI) technology platforms to address current unmet needs in the Asian asthma and chronic obstructive pulmonary disease (COPD) markets.
Kinnovata will be an independent company with its own development and manufacturing operations located in Tianjin. KingYork is expected to hold a 50% equity share; with Vectura holding 35% and Zendex and partners 15%. Vectura\'s holding is expected to have a nominal value of RMB 140 million (£14.6m) on close. Vectura will also receive royalties through to 2030 on certain products sold by Kinnovata. The equity stake and potential future royalty streams equate to the value attributed to the intangible and tangible assets relating to the Clickhaler® and Duohaler® devices. The assets include manufacturing equipment, formulation know-how and the regulatory dossiers for European approved products including salbutamol and budesonide delivered in Clickhaler.KingYork and Zendex are expected to contribute assets of RMB 260 million (£27.1m) including cash of £19.8m, certain technology assets, intellectual property and land at KingYork\'s pharmaceutical business park in Tianjin where Kinnovata will establish its manufacturing facility. Mr Chris Chan, previously an advisor to Zendex, has been appointed CEO of the Company.
Vectura has been working with KingYork and Zendex since late 2011 on the development of the product pipeline. Vectura is also providing training and other expertise to Kinnovata as the Company prepares to undertake its first Clickhaler®clinical studies in Chinese patients. An application for the import of Asmasal® Clickhaler® (salbutamol) has been filed with the Chinese State Food and Drug Administration (SFDA).
In addition, a separate R&D Cooperation Agreement has been established between Kinnovata and the Shanghai Institute of Pharmaceutical Industry to undertake the development of a number of DPI products on behalf of Kinnovata.
Completion of the transaction is subject to final Government clearances in China. Vectura expects to record an exceptional non-cash gain of approximately £13.5m in relation to the acquisition of the 35% shareholding in Kinnovata. Kinnovata will be accounted for as an associate, with Vectura recording 35% of the profits or losses of Kinnovata on its income statement as a non-cash item. Kinnovata is expected to be loss-making for at least 24 months following establishment.
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