(Yicai Global) Feb. 1 -- Luye Pharma Group’s shares soared after Hillhouse Capital, one of Asia’s biggest private equity firms, invested about HKD2.4 billion (USD309.6 million) in the Chinese biopharmaceutical products developer.

Luye Pharma [HKG: 2186] closed 52 percent higher today at HKD5.90 (76 US cents), after earlier surging as much as 80 percent.

Luye Pharma has signed a contract with Hillhouse NEV fund for HKD1.25 billion through a private placement, the Shandong province-based drugmaker said in a statement yesterday, adding that controlling shareholder Luye Investment will also sell shares worth HKD1.1 billion to Hillhouse NEV.

At HKD4.28 (55 US cents) a share, the sale price represented a 10 percent premium on Luye Pharma’s closing price of HKD3.89 on Jan. 29.

Biopharmaceutical companies have become an important target for Hillhouse Capital, with any investment generally buoying the shares of listed targets.

Hillhouse NEV has acquired stakes in more than 200 firms in biomedicine, medical instruments, healthcare services, and healthcare and drug retailing, spending a total of CNY150 billion (USD23.2 billion), according to Hillhouse Capital data released in November. Over 100 of these were Chinese firms.

Internet titan Tencent Holdings, lifestyle platform Meituan, e-commerce giant JD.Com, online ride hailer Didi Chuxing and new energy vehicle startup Nio all received early-stage investment from Hillhouse Capital.

Hillhouse Capital will own 15.6 percent of Luye Pharma after their deal is completed, with Luye Investment’s stake falling to 35.5 percent from 46.7 percent, but remaining the biggest shareholder.

Luye Pharma researches, develops, makes and sales innovative treatments for tumors, cardiovascular and metabolism diseases as well as other types of illness.
Last month, its German unit won approval to use its Alzheimer’s Disease treatment in hospitals and pharmacies across nearly 50 Chinese cities.

Editor: Tom Litting