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Australia’s CSL to buy majority stake in Chinese plasma fractionator Wuhan Zhong Yuan Rui De Biologicals

CSL is set to acquire an 80 per cent stake in plasma-derived therapies manufacturer Wuhan Zhong Yuan Rui De Biologics in China for US$352 million 

By Team ABLE

Australia Stock Exchange-listed CSL Limited has agreed to acquire 80 percent equity of plasma-derived therapies manufacturer Wuhan Zhong Yuan Rui De Biological Products from Humanwell Healthcare Group for US $352 million. 

Humanwell is a fully integrated healthcare solution provider in China, with growing presence in Southeast Asia, North America and Africa. It is publically traded on the Shanghai Stock Exchange with revenues in excess of US$1.7 billion in 2016, and ranked in the top 30 pharmaceutical companies in China. It has a distribution network covering China with direct sales to 20,000 medical institutions and 30,000 pharmacies, and operates and manages multiple hospitals in China. 

This transaction will provide CSL with a strategic presence in the Chinese domestic plasma fractionation market and also complements the leadership position that its CSL Behring business has built over the past 20 years as a provider of imported albumin in China.

Ruide develops, manufactures and commercializes plasma-derived products for the Chinese domestic market. This includes albumin, immunoglobulin (Ig) for IV injection, as well as several hyperimmune Ig products.  The company also has an advanced pipeline of multiple coagulation factor products that it plans to launch in the coming years, including plasma-derived Factor VIII. In addition, Ruide owns four plasma collection centers and one manufacturing facility in Wuhan, Central China. Ruide\'s total revenues reached approximately US $30 million in 2016.

Under terms of the agreement between the parties, CSL will be responsible for operational control of Ruide. The agreement includes a milestone based performance and payment mechanism to enable CSL to increase its ownership in Ruide over time. Closing of the initial 80 per cent stake is expected to occur in the second half of calendar year 2017, subject to regulatory approval by relevant government authorities and Humanwell shareholders. The acquisition will be funded through CSL\'s existing debt facilities.