RCS - Hutchmed China Ltd - Closure of Non-Core OTC Joint Venture Divestment

HUTCHMED (China)Announcement

29/09/2021 07:00

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RNS Number : 2771N  Hutchmed (China) Limited  29 September 2021

Press Release

 

HUTCHMED Announces Closing of Divestment of Non-Core OTC Joint Venture

 

 

Hong Kong, Shanghai & Florham Park, NJ -- Wednesday, September 29, 2021:
HUTCHMED (China) Limited ("HUTCHMED (https://www.hutch-med.com/) ")
(Nasdaq/AIM: HCM; HKEX:13) today announces that, further to its announcement
(https://www.hutch-med.com/hutchmed-enters-agreement-to-divest-hbys/) in March
2021 and following receipt of regulatory approval, it has completed the sale
of its entire indirect interest in Hutchison Whampoa Guangzhou Baiyunshan
Chinese Medicine Company Limited ("HBYS"), a non-core and non-consolidated
over-the-counter ("OTC") drug joint venture business, to GL Mountrose
Investment Two Limited, a company controlled and managed by GL Capital Group
("GL Capital").

 

The aggregate amount which will be received by HUTCHMED is approximately
US$169 million in cash, representing about 22 times HBYS' adjusted net profit
attributable to HUTCHMED equity holders of US$7.7 million in 2020 1  (#_edn1)
. Of the proceeds, approximately US$127 million related to its shareholding in
HBYS has been received. The balance of approximately US$42 million is related
to expected upcoming distributions of declared dividends related to previously
announced land compensation and prior year undistributed profits.

 

The transaction will allow HUTCHMED to focus the organization and resources on
its primary aim of accelerating investment in the Oncology/Immunology assets
in China and beyond.

 

About HUTCHMED

 

HUTCHMED (Nasdaq/AIM: HCM; HKEX:13) is an innovative, commercial-stage,
biopharmaceutical company. It is committed to the discovery and global
development and commercialization of targeted therapies and immunotherapies
for the treatment of cancer and immunological diseases. A dedicated
organization of over 1,400 personnel has advanced eleven cancer drug
candidates from in-house discovery into clinical studies around the world,
with its first three oncology drugs now approved and marketed. For more
information, please visit: www.hutch-med.com (https://www.hutch-med.com/) or
follow us on LinkedIn (https://www.linkedin.com/company/hutchmed/) .

 

About HBYS

 

HBYS was established in 2005 and focuses primarily on the manufacture,
marketing and distribution of proprietary OTC pharmaceutical products. HBYS
was HUTCHMED's non-consolidated joint venture with Guangzhou Baiyunshan
Pharmaceutical Holdings Company Limited. HUTCHMED had a 50% interest in HBYS
through a holding company in which HUTCHMED had an 80% interest.

 

About GL Capital

 

GL Capital is a leading investment firm specializing in buyout and growth
opportunities in China's healthcare industry. The firm has over US$2 billion
under management across both public and private equity, through USD and
RMB-denominated funds.

 

Founded in 2010, GL Capital strives to be the partner-of-choice for leading
healthcare companies, generate superior investment returns, and contribute to
the sustainable development of China's healthcare industry. For more
information, please visit www.gl-investment.com
(https://www.gl-investment.com/) .

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of
the "safe harbor" provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These forward-looking statements reflect HUTCHMED's current
expectations regarding future events, including its expectations as to the
anticipated amount of proceeds, the intended use of proceeds and the
anticipated closing date of the proposed transaction. Forward-looking
statements involve risks and uncertainties. Such risks and uncertainties
include, among other things, assumptions regarding the amount and timely
receipt of the final land compensation, satisfaction of the conditions
precedent to the consummation of the proposed transaction (including the
ability of the parties to secure regulatory approvals on the terms expected,
at all or in a timely manner), the ability of the parties to complete the
proposed transaction and the impact of the COVID-19 pandemic on general
economic, regulatory and political conditions. Existing and prospective
investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. For further discussion of
these and other risks, see HUTCHMED's filings with the U.S. Securities and
Exchange Commission, on AIM and with The Stock Exchange of Hong Kong Limited.
HUTCHMED undertakes no obligation to update or revise the information
contained in this press release, whether as a result of new information,
future events or circumstances or otherwise.

 

CONTACTS

 

 Investor Enquiries
 Mark Lee, Senior Vice President    +852 2121 8200
 Annie Cheng, Vice President        +1 (973) 567 3786

 Media Enquiries
 Americas - Brad Miles,             +1 (917) 570 7340 (Mobile)

Solebury Trout                    bmiles@troutgroup.com (mailto:bmiles@troutgroup.com)
 Europe - Ben Atwell / Alex Shaw,   +44 20 3727 1030 / +44 7771 913 902 (Mobile) /

FTI Consulting                    +44 7779 545 055 (Mobile)
                                    HUTCHMED@fticonsulting.com (mailto:HUTCHMED@fticonsulting.com)
 Asia - Zhou Yi,                    +852 9783 6894 (Mobile)

Brunswick

                                    HUTCHMED@brunswickgroup.com (mailto:HUTCHMED@brunswickgroup.com)

 Nominated Advisor
 Atholl Tweedie / Freddy Crossley,  +44 (20) 7886 2500

Panmure Gordon (UK) Limited

 

 1  (#_ednref1)   HBYS' adjusted net profit attributable to HUTCHMED equity
holders (after 20% non-controlling interest) in 2020 of US$7.7 million is a
non-GAAP measure which is 40% of HBYS' 2020 net profit of US$91.3 million less
US$72.0 million gain on land compensation, net of tax.

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