Viva Biotech sells 24% stake in CRO business Viva Shanghai for $150m

Viva Biotech Holdings Group has announced the fundraising of nearly $150 million by transferring about 24% of its equity interest in Viva Shanghai, its chief entity for contract research organization (CRO) business, to Temasek, HighLight Capital (HLC), and True Light.

The transaction has additionally resulted in a profit of around $60 million for the publicly listed entity of Viva Biotech. These moves highlight the company’s strategy to spin off its CRO business for independent listing in the A-share market.

HLC stated: “Based on a thorough analysis of the development features of the biopharmaceutical industry, the operation rules of the capital market, and the unique attributes of Viva Biotech, upon our in-depth and sincere discussion and research with Viva Biotech’s management team, the investment in Viva Biotech is a transaction for the enhancement of overall development and realization of value of the Company, as well as an improvement plan on corporate governance system.

Viva Biotech has made significant strides in its CRO drug discovery and development sector, following its Structure-Based Drug Discovery (SBDD) strategy. The company’s advancements in protein structural analysis have bolstered its status as a global leader in the biopharmaceutical industry.

Since listing, Viva Biotech has achieved successful mergers and acquisitions with SYNthesis and Langhua Pharmaceutical, resulting in a synergistic integrated platform for the research, development, and manufacturing of CRO and Contract Development and Manufacturing Organization (CDMO) products.

From 2019 to 2022, Viva Biotech’s revenue has seen an unprecedented surge from approximately RMB 323 million to nearly RMB 2.38 billion, demonstrating a compound annual growth rate of about 94.57%. The company’s gross profit also rose from roughly RMB 156 million to around RMB 816 million in 2022, exhibiting a compound annual growth rate of nearly 73.61%.

This financing operation will facilitate the introduction of strategic investors and support Viva Biotech’s plans to list in the A-share market. The move underscores the successful fusion of Viva Biotech’s inherent strengths and capital empowerment, reflecting the company’s foresight and ambitious goals.

Dr Cheney Mao — Viva Biotech Chairman and CEO said: “Despite the recession in investment and financing, we are able to secure investment from established institutions, by virtue of our pioneering spirit and continuous innovation in the past. This demonstrates the market’s recognition of our business foundation and confidence in our development prospect.”