Catalyst to sell Therapure CDMO business to 3SBio and CITICPE for US $290M

3SBio Inc. (HKSE: 1530) and CPE Funds, investment funds advised by CITICPE, through a newly established joint venture (JV), have agreed to acquire Therapure Biopharma Inc.’s contract development and manufacturing (CDMO) business and certain rights to plasma products and technology for the Chinese market for US $290 million.

The CDMO business will continue to operate under the Therapure brand and be led by Therapure’s CEO Nick Green and the current senior management team at its manufacturing facilities located in Mississauga, Ontario.

The Catalyst Capital Group Inc. will retain ownership of, and will support future investments in, Therapure’s plasma protein and therapeutic products business under a separate entity (ProductsCo). The 3SBio and CITICPE JV will contribute at least an additional CDN $20-25 million to ProductsCo under the terms of the agreement to be used for the construction of a new commercial facility.

Mississauga, Ontario based Therapure Biopharma Inc. operates through two divisions: Therapure Biomanufacturing and its product division comprised of Therapure Biologics (plasma derived product) and Therapure Innovations (drug discovery and product development).

Therapure Biopharma was formed July 6, 2007 following the acquisition of substantially all the assets of bankrupted Hemosol Corp. by Catalyst Fund Limited Partnership II.

On November 23, 2015, Therapure Biopharma filed for a $130 million proposed initial public offering (IPO) and secondary offering at a proposed price ranging between $11-13 per share. The offering would had valued the company between $970 million to $1.132 billion. Therapure Biopharma withdrew its IPO on May 30, 2016. Catalyst reportedly held $113.67 million secured loan in Therapure at the time of filing.

“This transaction is exciting for the future of Therapure and for the Canadian biopharma industry,” said Nick Green, President and Chief Executive Officer of Therapure. “It will be a powerful enabler for further growth and expansion of both 3SBio and Therapure in high growth areas of the market through our combined capabilities. This will put us in a stronger position to lead, innovate and grow, and further support our current and future clients.”

“Therapure is a business that we started from scratch and through a focused corporate strategy and discipline we have built the leading Canadian biomanufacturing operator and established a great product pipeline that is entering a new value creation stage as an independent company,” said Gabriel de Alba, Chairman of Therapure and Managing Director and Partner at Catalyst. “We are very excited about the ongoing business and investment relationship with 3SBio and CITICPE and look forward to product commercialization in China and to jointly expanding manufacturing capabilities in Canada and globally with 3SBio and CITICPE as new partners. For the products business, which we believe is also a high growth opportunity, we are focused on the next stage of value creation through strategic alternatives that, among other options, may include an initial public offering.”

Dr. Jing Lou, Chairman of 3SBio, commented on the acquisition: “This is a key milestone of the global expansion strategy of our biologics manufacturing business, adding a high quality asset and leadership team in Canada that will serve as a platform for growth. Over 340 biologics professionals in North America focusing on operations and management, market development, R&D and manufacturing are expected to join 3SBio, which is a big step forward in our strategy to expand our talent pool and establish global presence. The acquisition effectively integrates our mammalian cell culture capabilities and Therapure’s downstream purification and plasma source technologies. The combination of Sunshine Guojian’s 38,000-liter production capacity, Sirton’s production and service capabilities and Therapure’s competitive advantages will deliver enormous synergies in both operations and profitability. 3SBio’s global expansion strategy is now on fast track. We intend to accelerate the development and commercialization of innovative products toward our ultimate goal of benefiting patients around the world.”

Following 3SBio shareholders’ approval, the acquisition is expected to be completed by the end of this year.

Wells Fargo Securities served as exclusive financial advisor to Therapure Biopharma.

photo credit: Therapure Biopharma

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.