The move is part of HUTCHMED’s strategy to concentrate on its core business of developing new therapies for immunological diseases and cancers. Credit: THICHA SATAPITANON/Shutterstock.

HUTCHMED (China) has agreed to sell a 45% equity interest in the non-core, non-consolidated joint venture (JV) Shanghai Hutchison Pharmaceuticals (SHPL) for $608m to GP Health Service Capital and Shanghai Pharmaceuticals Holding.

The move is part of HUTCHMED’s strategy to concentrate on its core business of developing new therapies for immunological diseases and cancers, particularly its antibody-drug conjugate platform.

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SHPL was established in 2001 with Shanghai Pharma. SHPL’s consolidated net income attributable to HUTCHMED was $47.4m in 2023.

The proceeds from the sale will be invested in advancing HUTCHMED’s core business strategy, which includes a focus on antibody-targeted therapy conjugates (ATTCs). The ATTCs, which combine antibodies with targeted therapeutics, will enter clinical trials in the second half of 2025.

GP Health Service Capital will gain a 35% equity interest from HUTCHMED for $473m, while Shanghai Pharma will increase its stake by 10% for $135m, resulting in a 60% ownership post-transaction. HUTCHMED will retain a 5% equity interest in SHPL.

A three-year transition period will follow, during which HUTCHMED will propose the general manager for SHPL and guarantee a minimum net profit growth of 5% annually to GP Health Service Capital, with compensation capped at $95m.

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HUTCHMED anticipates a gain of $477m before taxation from the disposal. The transactions are subject to regulatory approvals and shareholder consent, with an Extraordinary General Meeting (EGM) to be convened for approval.

The completion of the sale is expected by the end of the first quarter of 2025.

HUTCHMED CEO and chief scientific officer Dr Weiguo Su stated: “We continue to invest in our prolific in-house research and development platform, including our new ATTC programmes that we believe have significant potential impact on the treatment of cancers. This divestment brings us additional resources and further focus.

“Our continual approach to engineering our own innovative, highly selective drug candidates has delivered several medicines with enhanced selectivity and limited off-target activity, allowing sustained target inhibition and flexibility for use as part of combination therapies.”

In January 2023, Takeda entered into an exclusive licence agreement with HUTCHMED (China) and its subsidiary Hutchmed for the development and marketing of fruquintinib.