(Yicai Global) July 18 -- Tasly Pharmaceutical Group will invest USD20 million in Mesoblast, an Australian stem cell technology research and development company, and introduce two Mesoblast-developed new drugs now in clinical trials for treating cardiovascular diseases to China.
Tasly signed corresponding agreements with the Melbourne-based leading global stem cell R&D company Mesoblast in recent days, the medicine developer and producer based in the northern Chinese city of Tianjin announced yesterday.
Tasly or its designated newly-built subsidiary will subscribe to 14,464,259 shares [NASDAQ: MESO; ASX: MSB] of the target, per the agreement, which did not state whether the shares are newly-issued or outstanding, or the post-transaction shareholding ratio.
Tasly will also pay for two stem cell products in phase III and phase II clinical testing by China's food and drug agency from Mesoblast and obtain the exclusive rights to develop, produce and commercialize them in mainland China, Hong Kong and Macao, per the announcement.
One of the new drugs is for the treatment of chronic heart failure and the other is for acute myocardial infarction, the announcement said.
After Tasly wins approval to market the two drugs from the State Food and Drug Administration of China, Mesoblast will receive milestone development payments worth USD25 million, milestone payment based on the actual annual net sales and double-digit percentage of dividends on net sales, said the announcement.
Through the cooperation, Tasly will introduce the world's leading stem cell treatment technology and experience, build stem cell R&D and production technology platform in China and expand its drug product line in treating cardio-cerebral vascular diseases so as to provide a more complete and effective treatment for Chinese patients, the announcement added.
The target is a world-leading biotechnology company developing stem cell-based regenerative therapy products that simultaneously listed in Australia and the US.
Affected by the news, Mesoblast's American Depositary Receipts -- dollar-denominated equities of foreign companies that can be bought and sold on a US exchange -- closed with a 16.67-percent rise yesterday.
Stem cells are biological units that can turn into other types of cells and divide to produce more of the same type, public information shows. They find frequent use in various medical therapies.
Editor: Ben Armour