(Yicai) Feb. 8 -- I-Mab, a Nasdaq-listed biotech firm that discovers and develops immunotherapies and biologics for cancer treatment, said it has penned an agreement to divest its assets and operations in China so as to focus on its business in the United States.

I-Mab will sell the entirety of its Shanghai-based unit I-Mab Biopharma, which runs its business in China, to "unconsolidated affiliate" I-Mab Biopharma Hangzhou for as much as USD80 million, it announced yesterday.

The reorganization is the best strategy for I-Mab at this stage and in the current China-US market environment, the firm told Yicai. it will develop according to the growth path of US biotech firms, while I-Mab Biopharma Hangzhou will follow the growth trajectory of its Chinese peers, it added.

“This agreement to divest our operations in China marks an important milestone for I-Mab in bringing a greater focus on the US and ex-China markets,” said Chief Executive Officer Raj Kannan. 

“This transaction allows us to reduce significant operational costs and enables us to reallocate our capital on current key priorities and new potential opportunities in further strengthening our portfolio while maintaining a strong balance sheet,” he said.

I-Mab Biopharma Hangzhou will acquire I-Mab's drug assets in China, bearing all of their future development costs, and operate the research and development center of I-Mab Shanghai and the Hangzhou company's manufacturing facility, I-Mab noted.

I-Mab will own less than 10 percent of I-Mab Biopharma Hangzhou via I-Mab Biopharma Hong Kong, it said. It will also remain listed on the Nasdaq markte and keep the rights to drugs in the clinical human trials stage outside China, it added.

In addition, I-Mab said it had appointed Joseph Skelton as chief financial officer, effective Feb. 5, while founder Jingwu Zang will oversee I-Mab Biopharma Hangzhou and step down from his post on the board of directors on Feb. 10.

In pre-market trading in New York today, I-Mab’s shares [NASDAQ: IMAB] were down 4.5 percent at USD1.91 apiece as of 6.19 a.m. local time, after closing 0.5 percent lower yesterday.

Editor: Martin Kadiev