Heidelberg Pharma and Huadong Announce Strategic Partnership, Including Equity Investmen

Heidelberg Pharma and Huadong Medicine have entered into a strategic partnership with the signing of an exclusive licensing agreement as well as an investment agreement.

The agreements were concluded with wholly owned subsidiaries of Huadong in China with a focus on oncology and ADC research, development and commercialization, Heidelberg Pharma said.

Heidelberg Pharma said that it has granted Huadong exclusive development and commercialization rights for HDP-101 (BCMA-ATAC) and HDP-103 (PSMA-ATAC) for Asia and is eligible to receive an upfront payment of USD 20 million (EUR 17.5 million) and milestone payments of up to USD 449 million (EUR 400 million), as well as tiered royalties ranging from single to low double digit percentages for each candidate.
Also, Heidelberg Pharma has granted Huadong an exclusive option for the pre-IND research candidates HDP-102 (CD37-ATAC) and HDP-104 (undisclosed target) in Asia with a total deal value of up to USD 461 million (EUR 410 million), plus tiered royalties ranging from single to low double digit percentages for each candidate.
Huadong also has right of first negotiation to license the next two ATAC candidates for Asia.
Huadong becomes the strategic partner in Asia for Heidelberg Pharma’s product development.

Huadong intends to make an equity investment in Heidelberg Pharma totaling EUR 105 million, representing 35% of total shares outstanding after the transaction, consisting of a rights issue and a share transfer as outlined below, has taken place, the company said.
Heidelberg Pharma said that it is planning a capital increase in the form of a rights issue of up to EUR 80 million, issuing up to 12,408,649 shares at EUR 6.44 per share, the price of the last funding round in April 2021. The rights issue will be based on a prospectus and use authorized capital. The approval of the prospectus for the rights offering by BaFin will be published in connection with the granting of all other necessary regulatory approvals. Further details of the capital increase will be published in due time.
Huadong said that it plans to acquire up to 26% of Heidelberg Pharma shares outstanding in the context of the rights issue. To achieve this percentage, the main shareholder dievini and related entities have agreed to transfer their subscription rights to Huadong, and Huadong will assume any unsubscribed shares in the rights issue. Huadong will purchase the necessary number of existing shares from dievini to reach 35% of total shares outstanding following the capital increase.
The acquisition of shares by Huadong is subject to certain closing conditions, such as foreign trade clearance, Huadong’s exemption from the obligation to make a mandatory offer by BaFin, as well as foreign direct investment (ODI) approval required under Chinese law, the company said.

Dr. Jan Schmidt-Brand, CEO and CFO of Heidelberg Pharma, commented: “We are excited to enter this major partnership with Huadong. Through this strategic collaboration, we will gain another valuable and reliable long-term investor who fully supports our strategy to become a global ADC player, and we will be able to speed up our product development and broaden our pipeline. We are convinced that our partner’s strong development and commercialization expertise and knowledge of Asia will both shorten the time to market and maximize the commercial opportunity for our ATAC® products in this important territory.”

Mr. Liang Lu, Chairman of the Board and CEO of Huadong Medicine, added: “Heidelberg Pharma is an emerging leader in the ADC space. We are pleased to partner with Heidelberg Pharma and bring the best ADC products to the cancer patients in Asia. The collaboration further strengthens Huadong’s ADC portfolio and expands our ADC R&D capabilities. Huadong will contribute Asian patients to global clinical trials to help accelerate products development. We are also committed to supporting Heidelberg Pharma to become a world ADC leader, by the substantial equity investment and access to Huadong’s ADC ecosystem.”

Prof. Dr. Christof Hettich, Chairman of the Supervisory Board of Heidelberg Pharma and Managing Partner of dievini, said: “I am delighted that the Heidelberg Pharma team has entered into this strategic partnership with a strong Asian partner and new shareholder who shares the Company’s vision. We have been supporting Heidelberg Pharma since 2004 and are happy to see that their legacy assets have been developing nicely through partnerships and the new ATAC® projects have been generating high interest from pharma companies. The dievini team is looking forward to the clinical development of the pipeline with the goal of bringing new, much-needed treatment options to cancer patients.”