(Yicai) Aug. 13 -- Shares in CANbridge Pharmaceuticals surged as much as 37.7 percent today after the Chinese rare-disease drug developer said pharmaceutical distributor Qingdao Baheal Medical will inject HKD100 million (USD12.7 million) into the company, potentially improving the firm’s commercialization prospects.

CANbridge’s share price [HKG:1228] closed up 25.7 percent at HKD2.10 (USD0.25). Earlier in the day it hit HKD2.30.

Baheal, which is a pharmaceutical distribution company with brand operations as its core business, will ultimately own approximately 14.99 percent of CANbridge and become its largest shareholder, said CANbridge, citing the share purchase agreement.

Whether Qingdao-based Baheal’s investment can help CANbridge overcome its commercialization hurdles is the key question that investors are asking. CANbridge mainly develops therapies for rare diseases such as hemophilia A, metabolic disorders and neuromuscular conditions. However, rare-disease drugs are expensive to develop and serve a relatively small market. As a result they often come at a high price and are difficult to commercialize.

Baheal’s extensive network and strong commercial capabilities will help CANbridge expand its market reach and accelerate penetration of its already-approved products, said Xue Qun, founder, chairman and chief executive officer of CANbridge.

The two companies have also signed an exclusive commercial-services agreement to deepen strategic cooperation. As part of this deal, a Baheal subsidiary will act as the exclusive distributor for certain CANbridge products in mainland China, Hong Kong and Macau.

Editor: Kim Taylor