Li Ka-shing, a senior adviser to CK Hutchison, which controls Hutchison Healthcare.
Zhang Wei/China News Service/Visual China Group via Getty Images
Hutchmed, the biopharmaceutical company controlled by Hong Kong's richest man Li Ka-shing, is selling a 45% stake in a cardiovascular joint venture for about $608 million as it seeks to increase capital and focus on its core cancer business.
Hong Kong-based Hutchison Healthcare said on Wednesday it had agreed to sell a 35% stake in Shanghai Chi-Med Pharmaceuticals to Chinese private equity firm Gimpo Health Services Capital for about $473 million in cash, and to state-owned Shanghai Pharmaceuticals for about $473 million in cash. Holdings Ltd. sells its 10% stake. Shanghai Chi-Whampoa, a joint venture between Hutchison Whampoa and Shanghai Pharmaceuticals, develops cardiovascular disease drugs.
Upon completion of the transaction, Hutchmed expects to realize pre-tax gains of $477 million, according to a filing with the Hong Kong Stock Exchange. The company said it plans to use the proceeds to expand its core business of developing targeted therapies to treat cancer and immune diseases.
Documents show that after the transaction is completed, Hutchison Whampoa Pharmaceuticals will retain a 5% stake in Shanghai Hutchison Whampoa Pharmaceuticals. The transaction is expected to close by the end of the first quarter, subject to conditions including regulatory approvals.
The announcement pushed Hutchison Healthcare's Hong Kong-listed shares up more than 6% in early trading on Thursday.
Hutchison Healthcare is one of two health-focused subsidiaries of CK Hutchison Holdings, the flagship company of the business empire founded by Li Ka-shing, with operations in ports, retail, infrastructure and telecommunications in about 50 countries. Another health-focused unit is Hong Kong-listed biotech Cheung Kong Life Sciences, which focuses on developing cancer therapies as well as treatments for cancer-induced pain and cancer diagnosis.
Mr. Li, who serves as a senior advisor to CK Hutchison and property developer Cheung Kong Holdings, has been committed to the healthcare industry. The nonagenarian was named one of Forbes Asia's Heroes of Philanthropy this year for gifting two cutting-edge liver cancer treatment devices to two Hong Kong universities, among other donations.
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