Healthcare fund manager ORI Capital has announced the first closing of a healthcare fund with a targeted size of $400 million. The new fund was unveiled just as ORI and its partners entered an agreement to sell their investment in British clinical-stage biopharmaceutical company Kymab in a deal worth up to $1.45 billion with French drugmaker Sanofi.
ORI, together with other exiting shareholders, will receive $1.1 billion in an upfront payment from Sanofi, and an additional amount of up to $350 million on achievement of certain milestones.
ORI Healthcare Fund, or ORI Fund I, and Hong Kong- and Shenzhen-listed Shenzhen Hepalink Pharmaceutical Group had in November 2016 led Kymab’s Series C preferred shares financing. ORI Fund I also made follow-on investments in Kymab in 2019 and 2020, ORI said in a statement.
ORI had launched ORI Fund I with a fund size of $200 million in January 2016. Kymab was the largest investment of ORI Fund I. Its new fund, called the ORI Healthcare Fund II, is targeted at double that size.
“This successful divestment is an important milestone for ORI Fund I, with an exit multiple achieved of 2.88x,” Simone Song, founder and senior partner of ORI Capital, said in the statement without disclosing the exact amount ORI will receive as its share from the sale of its stake in Kymab.
“With our investors’ support of ORI Fund II, we believe we can continue to deliver strong financial returns to our investors whilst making a meaningful social impact,” she added.
In a separate statement this week to the Hong Kong stock exchange, Hepalink, which holds about 8.66% of Kymab, said it will receive a cash payment of $117 million as upfront payment and up to $30.3 million upon achievement of certain milestones. Hepalink said the unaudited fair value of its investment in Kymab was about RMB284 mln ($44 million) as of Sept. 30.
ORI, which was established in 2015 and holds a Hong Kong Securities and Futures Commission asset management license, said in the statement ORI Fund II will continue to invest in innovative healthcare companies globally, focusing on “therapeutics, drug delivery and diagnostics areas that address major diseases or diseases with high mortality rates.”
The deal gives Sanofi full rights to Kymab’s KY1005, an antibody therapy candidate with potential to treat a range of inflammatory disorders and immune-related diseases, as well as KY1044, a cancer treatment that is currently undergoing Phase I/II clinical development.
Sanofi, in its own statement, described KY1005 as a “promising antibody for inflammatory disorders.” The French company said it expects to complete Kymab’s acquisition in the first half of 2021.