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Heidelberg Pharma and Huadong Announce Strategic Partnership, Including Equity Investment

  • Heidelberg Pharma grants Huadong exclusive license to develop and commercialize HDP-101 and HDP-103 in Asia (excluding Japan), plus exclusive opt-in rights for two more pipeline candidates, with a total deal value of up to USD 930 million (EUR 825 million)

  • Huadong will also participate in a rights issue and acquire a percentage of current shareholdings from existing shareholders including dievini, totaling EUR 105 million

  • Huadong to become second largest shareholder; dievini remains largest shareholder

  • Heidelberg Pharma plans rights issue of up to EUR 80 million at EUR 6.44 per share

  • Conference call on Monday, 28th February 2022 at 01:00 pm CET

Ladenburg, Germany, 28 February 2022 – Heidelberg Pharma AG (FSE: HPHA) and Huadong Medicine Co., Ltd., Hangzhou, China, (SZ000963; Huadong) today announced that the companies have entered into a strategic partnership with the signing of an exclusive licensing agreement as well as an investment agreement. The agreements were concluded with wholly owned subsidiaries of Huadong, one of the leading pharmaceutical companies in China with a focus on oncology and ADC research, development and commercialization.

Dr. Jan Schmidt-Brand, CEO and CFO of Heidelberg Pharma, commented:“We are excited to enter this major partnership with Huadong. Through this strategic collaboration, we will gain another valuable and reliable long-term investor who fully supports our strategy to become a global ADC player, and we will be able to speed up our product development and broaden our pipeline. We are convinced that our partner’s strong development and commercialization expertise and knowledge of Asia will both shorten the time to market and maximize the commercial opportunity for our ATAC® products in this important territory.”

Mr. Liang Lu, Chairman of the Board and CEO of Huadong Medicine, added: “Heidelberg Pharma is an emerging leader in the ADC space. We are pleased to partner with Heidelberg Pharma and bring the best ADC products to the cancer patients in Asia. The collaboration further strengthens Huadong’s ADC portfolio and expands our ADC R&D capabilities. Huadong will contribute Asian patients to global clinical trials to help accelerate products development. We are also committed to supporting Heidelberg Pharma to become a world ADC leader, by the substantial equity investment and access to Huadong’s ADC ecosystem.”

Prof. Dr. Christof Hettich, Chairman of the Supervisory Board of Heidelberg Pharma and Managing Partner of dievini, said: “I am delighted that the Heidelberg Pharma team has entered into this strategic partnership with a strong Asian partner and new shareholder who shares the Company’s vision. We have been supporting Heidelberg Pharma since 2004 and are happy to see that their legacy assets have been developing nicely through partnerships and the new ATAC® projects have been generating high interest from pharma companies. The dievini team is looking forward to the clinical development of the pipeline with the goal of bringing new, much-needed treatment options to cancer patients.”

The strategic partnership includes the following agreements:

ATAC® licensing agreement

  • Heidelberg Pharma has granted Huadong exclusive development and commercialization rights for HDP-101(BCMA-ATAC) and HDP-103 (PSMA-ATAC) for Asia and is eligible to receive an up front payment of USD 20 million (EUR 17.5 million) and milestone payments of up to USD 449 million (EUR 400 million), as well as tiered royalties ranging from single to low double digit percentages for each candidate.

  • Heidelberg Pharma has granted Huadong an exclusive option for the pre-IND research candidates HDP-102 (CD37-ATAC) and HDP-104 (undisclosed target) in Asia with a total deal value of up to USD 461 million (EUR 410 million), plus tiered royalties ranging from single to low double digit percentages for each candidate.

  • Huadong also has right of first negotiation to license the next two ATAC® candidates for Asia.

  • Huadong becomes the strategic partner in Asia for Heidelberg Pharma’s product development.

Investment agreement

  • Huadong intends to make an equity investment in Heidelberg Pharma totaling EUR 105 million, representing 35% of total shares outstanding after the transaction, consisting of a rights issue and a share transfer as outlined below, has taken place.

  • Heidelberg Pharma is planning a capital increase in the form of a rights issue of up to EUR 80 million, issuing up to 12,408,649 shares at EUR 6.44 per share, the price of the last funding round in April 2021.The rights issue will be based on a prospectus and use authorized capital. The approval of the prospectus for the rights offering by Bundesanstalt für Finanzdienstleistungsaufsicht (Federal Financial Supervisory Authority) will be published in connection with the granting of all other necessary regulatory approvals. Further details of the capital increase will be published in due time.

  • Huadong plans to acquire up to 26 % of Heidelberg Pharma shares outstanding in the context of the rights issue. To achieve this percentage, the main shareholder dievini and related entities have agreed to transfer their subscription rights to Huadong, and Huadong will assume any unsubscribed shares in the rights issue. Huadong will purchase the necessary number of existing shares from dievini to reach 35 % of total shares outstanding following the capital increase.

  • The acquisition of shares by Huadong is subject to certain closing conditions, such as foreign trade clearance, Huadong's exemption from the obligation to make a mandatory offer by BaFin, as well as foreign direct investment (ODI) approval required under Chinese law.

  • The closing conditions must generally be satisfied until 27th August 2022 (Long Stop Date). If the necessary public approvals have not been granted by 27th July 2022, Huadong is entitled to extend the Long Stop Date until 27th October 2022, provided that Huadong grants a 12-month loan to the Company in the amount of EUR 10 million at the prevailing market interest rate. dievini would also grant a loan to the Company with the same terms as the loan from Huadong,under the framework of the financing commitment by dievini announced on 17th February 2022.

  • If the approvals are not granted by the Long Stop Date, then no shares will be issued to or acquired by Huadong. However, dievini might consider participating in the rights issue and exercise a part of its subscription rights to fulfil partly or in full its financing commitment announced on 17th February 2022.


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