UPDATE 2-Biotech firm I-Mab to divest China operations, shift focus to US
(Adds analyst comments in paragraphs 3-4, details on new CFO and treatments in paragraphs 6-8)
Feb 7 (Reuters) - I-Mab said on Wednesday it has agreed to divest its operations and assets in China as part of its strategy to become a U.S.-focused biotech firm, sending the company's shares up nearly 11% in premarket trading.
The company will sell its China unit, I-Mab Shanghai, to affiliate Hangzhou Co for up to $80 million, subject to certain regulatory and sales-based milestones.
The move makes strategic sense, Cantor Fitzgerald analyst Louise Chen said, adding that the development came as a surprise.
Investors have shown reluctance to invest in China-based biotech companies mainly due to geopolitical concerns, according to Chen.
Chinese markets have been under pressure in recent years, hurt first by a trade spat with U.S. and then by the collapse of property giant China Evergrande.
I-Mab, which also named Joseph Skelton as its new chief financial officer, will continue to be listed on the Nasdaq and retain outside-China rights for all of its experimental treatments being tested in human trials.
These include the company's cancer drug uliledlimab, being tested in a mid-stage study to treat non-small cell lung cancer, as well as its early-stage cancer treatments givastomig and TJ-L14B.
Hangzhou Co will acquire rights to I-Mab's experimental treatments in China, including Greater China rights for its pediatric growth hormone deficiency therapy eftansomatropin alfa and four experimental cancer treatments.
Following the completion of the divestiture, I-Mab will own a less than 10% stake in Hangzhou Co. (Reporting by Bhanvi Satija in Bengaluru; Editing by Varun H K and Shounak Dasgupta)
