Key Takeaways:
GHO and CBC's merger creates a $21 billion healthcare investor built to arbitrage innovation across Asia, Europe and North America.
Global Healthcare Opportunities and CBC Group are discussing a new global fund after their merger, betting that Asia's rise as a drug-development hub will reshape cross-border healthcare dealmaking.
"In this sector, one of the biggest synergies is to arbitrage between different regions," Fu Wei, chief executive and founder of CBC Group and co-CEO of the combined firm, said in an interview. "You need to source the cheapest supply chain globally, research-and-development globally and then you are able to market the products to every patient in the world."
The London-based and Singapore firms last month struck a merger to form a global healthcare investor with more than $21 billion in assets under management. GHO closed its fourth fund in October at more than 2.5 billion euros ($2.87 billion), while CBC's Royalty Private Credit Fund II closed at $500 million last year.
The tie-up positions the combined group to help Western life-science companies access Asian customers and drugmakers from China, South Korea and other markets expand globally — a strategy that could accelerate as Chinese biotech companies sign multibillion-dollar licensing deals with Pfizer, GSK and AstraZeneca.
For now, the firms will continue managing their existing funds separately, and their investment strategies won't change, Mortimer and Fu said. But a future global fund is under discussion.
"We'll look to some sort of mechanism or fund that might have a global remit, but that will be dictated and determined by market conditions," Mike Mortimer, GHO managing partner and co-founder and co-CEO of the combined firm, said. "Over time we'll come together with a more joined-up, unified approach."
GHO is about to close the sale of lab-equipment supplier Biocare Medical to Agilent Technologies for $950 million, alongside partner Excellere Partners, Mortimer said. The firm has a couple of other exits in the works that should play out over the next six to eight months. GHO's biggest acquisition to date was the buyout, together with Vistria Group, of U.S. contract drug manufacturer Alcami at a valuation of about $2 billion, including debt.
CBC's biggest investments include Chinese biotech company Everest Medicines and South Korean medical-aesthetics group Hugel. Both firms share a hands-on approach to investment and work closely with portfolio-company management teams, Mortimer and Fu said.
China, long a supplier of pharmaceutical ingredients and lower-cost generic drugs, is emerging as a major player in medical research. The country's biotechnology industry is producing new drug candidates, and it hosts a growing number of clinical trials, cementing Asia's role in global healthcare value chains. Major Western drugmakers including Pfizer, GSK and AstraZeneca have recently struck deals to source promising medicines for cancer, obesity and other diseases from China, with price tags that could rise to multiple billions of dollars if targets are met.
To Asian healthcare companies looking to expand into the West and Western businesses trying to open new markets in Asia, an investor that combines a global outlook with local expertise is compelling, Mortimer said. "That classic 'think global, act local' is really what we're trying to leverage here."
This article is for informational purposes only and does not constitute investment advice.
