HUTCHMED China Secures USD$ 608 Million in Strategic 45% Shanghai Operations Divestment

HUTCHMED (China) Limited has signed agreements to sell its 45% equity stake in Shanghai Hutchison Pharmaceuticals Limited (SHPL) for approximately USD$ 608 million in cash to GP Health Service Capital Co., Ltd and Shanghai Pharmaceuticals Holding Co., Ltd. (Shanghai Pharma). The divestment follows HUTCHMED’s strategic evaluation of options to monetize its non-core, non-consolidated joint venture in SHPL. This decision is expected to support HUTCHMED’s focus on its primary business of developing and commercializing innovative therapies for cancer and immunological diseases, including advancing its next-generation antibody-drug conjugate programs.

EGM to Determine Approval and Conditions for Strengthening ADC Platform and Initiating ATTC Trials in 2025

HUTCHMED plans to hold an Extraordinary General Meeting (EGM) for its shareholders to review and approve the transactions. The company expects the transactions to close by the end of the first quarter of 2025, pending the fulfillment of specific conditions, including shareholder approval and regulatory clearances. Both transactions must close simultaneously to complete the deal.

“This transaction to divest most of our holding in SHPL is another example of HUTCHMED delivering on the strategy outlined in 2022, accelerating our path to profitability and focusing on core operations. SHPL is a well-established business, having delivered over US$370 million in dividends to HUTCHMED throughout the years, and we are confident that it continues to have promising future growth prospects,” said Dr Dan Eldar, Chairman and Non-executive Director of HUTCHMED. “We are focused on capitalizing on our two decades of deep research into oncogenic drivers of disease and discovering and developing highly optimized therapies, through our unique ATTC platform.”

The company hopes to use the proceeds from the SHPL stake sale to advance its internal pipeline and strengthen its core business strategy. A key focus is its next-generation antibody-drug conjugate (ADC) platform, which leverages its expertise in oncological pathways and small-molecule targeted therapies. Unlike traditional ADCs, HUTCHMED’s antibody-targeted therapy conjugates (ATTCs) combine antibodies with targeted therapies instead of cytotoxins, enabling dual mechanisms of action. Preclinical studies have demonstrated strong anti-tumor effects with durable responses from a single dose and improved tolerability compared to using the individual components separately. The company aims to begin clinical trials for its first ATTC in the second half of 2025.

HUTCHMED Anticipates US$477 Million Profit With 5% Stake Retention in SHPL

HUTCHMED has reached agreements to sell a portion of its stake in SHPL. Under the new deals, GP Health Service Capital will acquire 35% of SHPL for USD $473 million in cash. Meanwhile, Shanghai Pharma will purchase 10% for USD $135 million, increasing its ownership to 60%. Additionally, GP Health Service Capital retains the option to allow a third-party investment fund to acquire up to 10% of SHPL’s equity. After the transaction, HUTCHMED will retain a 5% stake in SHPL.

HUTCHMED expects to generate USD $477 million in profit from the sale, though withholding taxes may adjust this figure. They will determine the final amount before completing the deal. As part of the transaction, a three-year transition period will follow. During this time, HUTCHMED will continue to propose the General Manager for SHPL and ensure the company’s net profit grows by at least 5% annually. In return, HUTCHMED will receive up to USD $95 million over three years.

Author

Denisse Sandoval