On February 10, 2020 OncoSec Medical Incorporated (NASDAQ:ONCS) (the "Company" or "OncoSec"), a company developing late-stage intratumoral cancer immunotherapies, reported that, following shareholder approval, the proposed strategic investment by and partnership (the "CGP/Sirtex Transaction") with Grand Decade Developments Limited, a wholly owned subsidiary of China Grand Pharmaceutical and Healthcare Holdings Limited ("CGP"), and its U.S. affiliate, Sirtex Medical US Holdings, Inc. ("Sirtex") has closed (Press release, OncoSec Medical, FEB 10, 2020, View Source [SID1234554102]).
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The CGP/Sirtex Transaction brings significant benefits to OncoSec, including:
Immediate Capital
An immediate $30 million cash infusion at $2.50 per share, an approximate 25% premium to the average share price over the 20 days prior to the signing of the deal on October 9, 2019. The capital received today will significantly help fund OncoSec’s ongoing KEYNOTE clinical trials of its lead product candidate, TAVO (plasmid-based interleukin-12), in combination with Merck’s KEYTRUDA to completion.
CGP Partnership Provides Access to Chinese Market
China is the second largest market in the world after the U.S., but historically has been challenging for U.S. biopharma companies to enter due to regulatory barriers.
As a public company listed on the Hong Kong stock exchange (with a market capitalization of approximately $1.8 billion), CGP is an active and established pharmaceutical leader in China. CGP currently develops, manufactures and distributes its products in China to approximately 6,000 hospitals and 30,000 pharmacies and has a sales team of more than 2,000 employees. It also has significant experience dealing with regulatory bodies, research and development and product commercialization in China.
OncoSec plans to leverage its strategic alliance with CGP to develop and introduce TAVO to the important Chinese market. Under the license agreement with CGP, OncoSec has granted an exclusive license to develop, manufacture and commercialize OncoSec’s current and future products in greater China and other Asian markets. CGP will pay for all development costs and will also pay OncoSec up to 20% royalties on the net sales of such products in the region, less development costs.
Sirtex Partnership Provides Access to Top-Notch Commercial Talent and Resources
Sirtex will support and assist OncoSec with pre-marketing activities for TAVO and its visceral lesion applicator (VLA) in exchange for low single-digit royalties on those products.
Sirtex is a global life-sciences company that has an approved medical device product for targeted radiation therapy for liver cancer. They have a highly experienced and dedicated oncology sales force and have supplied product to more than 1,300 medical centers in more than 45 countries.
"At a time when our peer companies are engaging in highly dilutive financings that often include discounts and the issuance of warrants, we are grateful that OncoSec’s progress to date enabled us to secure a premium investment by two first-rate healthcare companies," said Daniel J. O’Connor, President and Chief Executive Officer of OncoSec. "The license granted to CGP in greater China has significant value to OncoSec shareholders because it enables us to access the greater China market decades earlier than we ever would have been able to and with CGP bearing the development and commercialization costs. We will also now have the ability to access China for clinical data. Likewise, the services agreement with Sirtex is also very valuable for OncoSec as Sirtex, a company with significant sales and marketing capabilities, will conduct the requisite sales and marketing preparatory activities, which needs to begin now in order to be prepared to launch TAVO, should it gain regulatory approval. Both of these agreements bring significant economic value to our shareholders and we are excited to begin our partnership with CGP and Sirtex."
About CGP
CGP is a public company listed on the Hong Kong stock exchange with a market capitalization of approximately $2.1 billion USD. CGP develops, manufactures and distributes pharmaceutical products and medical devices to retailers and medical organizations. CGP currently distributes its products to approximately 6,000 hospitals and approximately 30,000 pharmacies and has a sales team of more than 2,000 employees. CGP also has significant experience in R&D and product commercialization in China. Such experience dealing with the relevant Chinese regulatory bodies makes CGP an ideal strategic partner for OncoSec as it looks to gain regulatory approval to introduce TAVO to the Chinese market. For more information, visit www.chinagrandpharm.com.
About Sirtex
Sirtex is a global healthcare business company with offices in the U.S., Australia, Europe and Asia, working to improve outcomes in people with cancer. Sirtex’s current lead product is a targeted radiation therapy for liver cancer called SIR-Spheres Y-90 resin microspheres. More than 100,000 doses have been supplied to treat patients with liver cancer at more than 1,300 medical centers in over 45 countries. Sirtex’s global focus on drug development makes it a natural partner for the Company as it looks to develop and introduce TAVO into markets around the world. For more information, visit www.sirtex.com. SIR-Spheres is a registered trademark of Sirtex SIR-Spheres Pty Ltd.