Sanpower New Health Files IPO Prospectus Following $819M Acquisition of Provenge, the First FDA-Approved Prostate Cancer Cellular Immunotherapy
On January 9 (San Francisco time), China’s private enterprise Sanpower Group reached an equity acquisition agreement with Valeant, a renowned global biopharmaceutical company, to acquire 100% of the shares in Dendreon, Valeant’s U.S.-based biopharmaceutical subsidiary. This deal makes Sanpower the owner of Provenge, the world’s first cellular immunotherapy for prostate cancer, propelling it to the forefront of the global precision medicine industry.
It is reported that the acquisition deal was valued at $819 million, setting a new record for the largest acquisition of a U.S. pharmaceutical product by a Chinese company. Provenge generated approximately $120 million in profit in 2016, with a price-to-earnings ratio of around 8x, and holds significant application potential in China, Asia, and Europe in the future.
Sanpower Group Chairman Yuan Yafei and Valeant Chairman and CEO Joseph C. Papa Sign Equity Acquisition Agreement
According to VCBeat, Provenge holds epoch-making significance in the field of cancer immunotherapy. First proposed by Stanford University immunologist Edgar Engleman, it underwent nearly two decades of extensive research and three Phase III clinical trials before receiving U.S. FDA approval for market launch in April 2010, becoming the only commercially available prostate cancer cellular immunotherapy to date. This also marked the first systematic clinical validation worldwide that the immune system can effectively restrain tumor progression and extend survival, thereby opening the door to immunotherapy.
As the first cell-based immunotherapy approved by the FDA, Provenge’s acquisition by a Chinese enterprise marks a milestone for China’s cellular immunotherapy industry. Professor Xue Wei, Director of the Urology Department at Renji Hospital affiliated with Shanghai Jiao Tong University, believes that Provenge has demonstrated efficacy and safety in the treatment of prostate cancer through clinical practice. If successfully introduced into China, it could help domestic prostate cancer patients access optimal treatment and provide valuable reference and demonstration for Chinese regulatory authorities in establishing standards for immunotherapy, thereby serving both national interests and public welfare.
“Acquiring Provenge is also a crucial step in perfecting Sanpower’s new health industry chain, creating strong synergies with our other healthcare businesses,” said Yuan Yafei, Chairman of Sanpower Group. Currently, Ankangtong, the group’s elderly care subsidiary, serves 4 million senior users—a demographic that includes elderly men, who are at high risk for prostate cancer. Meanwhile, the group’s expanding umbilical cord blood banking business is projected to reach a storage capacity of 1 million units. Leveraging its strengths in elderly care, hospitals, and umbilical cord blood stem cell storage, Sanpower aims to drive development in the field of precision medicine, ultimately building a comprehensive new health industry platform that integrates medical and elderly care services within a closed-loop, full-industry-chain ecosystem.
According to an insider close to the deal, Sanpower Group began engaging with this project in the second half of 2016. After multiple rounds of negotiations and outcompeting several rivals, it secured the project, marking the first time a Chinese enterprise has acquired an original drug in the United States. The transaction value of $819 million also set a record for the largest pharmaceutical acquisition by a Chinese company in the U.S. Notably, Provenge generated $120 million in profit in 2016, implying a price-to-earnings (P/E) ratio of approximately 8x. This stands in stark contrast to the P/E ratios of biopharmaceutical companies listed on China’s A-share market, which often reach tens or even hundreds of times. This deal pioneered a path for Chinese private enterprises to acquire internationally leading biomedical technologies at advantageous valuations.
In Sanpower Group’s industrial planning, the healthcare sector is clearly delineated, with “healthy aging, biomedicine, and hospital management” forming a tripartite structure that constitutes Sanpower Group’s “Big Health” industrial layout.
On April 20, 2016, Sanpower Group announced that its subsidiary, Sanpower International Healthcare Management Co., Ltd., had jointly established the Sanpower Benyu Health Industry Fund with Shanghai Benyu Investment Management Co., Ltd. With a total size of RMB 10 billion, this marks the establishment of the third health-focused fund under Sanpower Group and represents the largest health industry fund raised by the group to date.
Three Health Funds Established by Sanpower Group
On June 15, 2015, Sanpower International Healthcare Management Co., Ltd. (hereinafter referred to as “Sanpower Healthcare”), a subsidiary of Sanpower Group, and Shanghai Yinlai Equity Investment Fund Management Co., Ltd. (hereinafter referred to as “Shanghai Yinlai”) formally signed a strategic cooperation agreement at the headquarters of Sanpower Group to jointly establish the Sanpower-Yinlai Healthcare Investment Fund.
Fund Name: Sanbao Yinlai Medical Investment Fund
Established: June 15, 2015
Fund Size: RMB 5 billion
Initiator: Sanpower International
Partner: Shanghai Yinlai
Investment Areas: Hospital investment, mobile internet healthcare, elderly care services, stem cell research and applications, medical aesthetics, and other health-related sectors.
On September 16, 2015, Nanjing Xinjiekou Department Store Co., Ltd. (Nanjing Xinbai) issued an announcement stating its intention to establish a private equity fund management company in partnership with Shanghai Innovation Investment Co., Ltd. and Shanghai Kangcheng Hospital Management Consulting Co., Ltd. The target company would serve as the general partner to initiate a limited partnership equity investment fund focused on investments in the big health sector, tentatively named the “Xinbai Innovation Health Investment Fund,” with a fund size of RMB 5 billion.
Fund Name: Xinbai Innovation Health Investment Fund
Establishment Date: September 16, 2015
Fund Size: RMB 5 billion
Initiator: Nanjing Xinjiekou Department Store (Sanpower Holdings)
Partners: Shanghai Innovation, Shanghai Kangcheng
Investment Areas: Mobile Internet Healthcare, Hospital Investment, Elderly Care Services, Stem Cell Research and Applications, Medical Aesthetics, Precision Cell Therapy, Regenerative Medicine, Genetic Testing and Therapy, Healthcare Informatics, Diagnostic O2O (Online-to-Offline), Medical E-commerce, Chronic Disease Management, Rehabilitation Management, Physical Examinations, Emergency Rescue, Smart Medical and Rehabilitation Devices, and Other Health-Related Fields.
On April 20, 2016, Sanpower International and Shanghai Benyu jointly established the Sanpower Benyu Health Industry Fund.
Fund Name: Sanbao Benyu Health Industry Fund
Date of Establishment: April 21, 2016
Fund Size: RMB 10 billion
Initiator: Sanpower International
Partner: Shanghai Benyu
Investment Areas: Including medical services, pharmaceutical products, healthcare supplies, nutritional foods, medical devices, wellness equipment, leisure and fitness, health management, and health consulting. The key investment regions are first- and second-tier cities in China, as well as areas with unique resource advantages.
From 2015 to 2016, Sanpower Group established three health-focused funds with a total capital size of approximately RMB 20 billion, covering more than 26 subsectors in the healthcare industry.
Prior to the acquisition of Provenge, Sanpower had already acquired more than seven well-known enterprises and institutions both domestically and internationally in recent years, with each investment involving a substantial amount.
2012–2017: Sanpower Group’s Investment Trends in the Health Industry
In 2012, Sanpower Group acquired Ankangtong, a leading provider of home-based elderly care services in China, successfully entering the home care service sector.
In April 2014, Sanpower Group acquired MecoX, an omnichannel e-commerce platform for health and beauty products and services, for $39 million;
In April 2014, Sanpower Group acquired an 80% controlling stake in Xuzhou People's Hospital.
In December 2014, Sanpower Group acquired Natali Seculife Holding Ltd., Israel’s largest home healthcare service provider, for $70 million, introducing advanced business models and management expertise to China to enhance its competitiveness in elderly care.
In January 2015, Sanpower Group signed a strategic cooperation agreement with Jiangsu Province People’s Hospital. The two parties will engage in strategic collaboration in the fields of healthcare, elderly care, and health management under Sanpower Group, focusing on operational cooperation, technical support, and resource sharing.
In November 2015, Nanjing Xinjiekou Department Store, under the Sanpower Group, spent RMB 11 billion to acquire CO Group, China’s largest cord blood storage enterprise, and the Shandong Cord Blood Bank, thereby becoming the world’s largest cord blood bank operator.
In February 2016, Sanpower International Healthcare Management Co., Ltd., a subsidiary of the Sanpower Group, signed a tripartite framework cooperation agreement with Jiangsu Province People’s Hospital and Shanghai Benyu Health Management Consulting Co., Ltd., to jointly enter the big health industry.
In April 2016, Miao Jiankang, the mobile health management platform under Sanpower Group, completed its RMB 100 million Series A financing round, led by Ronghui Capital, a subsidiary of Sunshine Insurance Group.
In January 2017, Sanpower Group acquired a 100% equity stake in Dendreon, a U.S. biopharmaceutical company under Valeant Pharmaceuticals, thereby becoming the global owner of Provenge, the world’s first cellular immunotherapy for prostate cancer.
Based on the current classification of Sanpower Group’s investment projects: Natali, Natali (China), Ankaotong, Miao Health, and Mecox Lane belong to the health and elderly care sector; Provenge and China Cord Blood Corporation, acquired by its subsidiary Nanjing Xinjiekou Department Store, fall under the biomedical sector; while Xuzhou People’s Hospital and Xuzhou North District Joint-Stock Hospital are part of the hospital operations sector.
“Acquiring Provenge is a significant step and a benchmark achievement for Sanpower New Healthcare in the field of precision medicine,” revealed an insider from Sanpower Group. Gene big data derived from umbilical cord blood storage serves as the foundation of precision medicine. With its abundant resources in umbilical cord blood banks, Sanpower New Healthcare holds a distinct advantage in developing precision medicine. The acquisition of Provenge has enabled Sanpower New Healthcare to extend from basic umbilical cord blood storage to practical applications, marking a strategic leap forward in its further deployment within the precision medicine sector.