The biopharmaceutical company Hutchmed, which is backed by Hong Kong billionaire Li Ka-shing, recently announced plans to divest shares in a partnership designed to promote the development of cancer treatments. Following this announcement, the company’s shares rose 12 percent on global markets.
Specifics of the Deal
Hutchmed will sell off a 45 percent interest in Shanghai Hutchinson Pharmaceuticals Ltd. to Chinese entities GPT Health Service Capital Company and Shanghai Pharmaceuticals Holding Company. Shanghai Pharma, as it is known, already holds 50 percent of the target company’s shares and will own 60 percent once this arrangement is formalized. As part of the transaction, Hutchmed will be required to compensate buyers if the target company fails to achieve specific profit targets.
Reasons Behind the Venture
Hutchmed has expressed the desire to spread its investment capital around to increase its profit in 2025. The corporation discovered three medications marketed in China. One such drug is Fruzaqla, a cancer therapy also used in international markets such as the United States, Europe, and Japan thanks to the entity’s partnership with Japanese drug company Takeda Pharmaceuticals. Fruzaqla is used to remediate colorectal cancer and turned more than $200 million in net sales during the first three quarters of 2024.
Shanghai Hutchinson Pharmaceuticals began in 2001 for the purpose of making and selling prescription drugs, particularly those that treat cardiovascular ailments.
Hutchmed estimates that the deal will earn more than $477 million before taxes. In a written statement, the company stressed its intentions to reinvest these funds in the development of drugs geared toward fighting cancer and immune system disorders.
In addition, Hutchmed is in the process of producing powerful cancer-eliminating preparations known as antibody conjugates and plans to begin clinical trials of the first of its antibody-targeted therapies during the latter half of this year.
Who is Li Ka-shing?
Despite its size, Hutchmed is a mere cog in the Li Ka-shing empire. The tycoon is affectionately known as the Warren Buffet of Asia. His vast wealth makes him the second wealthiest man in Hong Kong. Widely praised for his financial wizardry, Li’s network includes holdings in industries such as real estate, retail, shipping, and telecommunications.
Inspired by Early Struggle and Tragedy
The nearly century-old corporate headman was originally from China and relocated to Hong Kong in the 1940s. Following the death of his beloved father, the 14-year-old Li took up work as a factory apprentice to support his family.
“The burden of poverty and this bitter taste of helplessness and isolation sort of branded on my heart forever the question that still drives me,” Li said in a 2010 interview. “Is it possible to reshape one’s destiny?”
The Ascension
In 1950, he opened a plastic flower-producing factory. Li used the profits that he turned from this venture for real estate investments. By the end of the 1970s, Li stood out as a major real estate magnate who eventually oversaw an international operation covering 50 nations and employing more than 300,000 people. Since then, the multi-billionaire has started or acquired other corporations that service hundreds of millions of customers worldwide.
Humbleness and Philanthropy
Despite his immense wealth and power, Li lives a notably humble, quiet, and simple life. For decades, he wore a basic $50 Seiko watch. Additionally, he is respected for his philanthropy. In 1980, the Li Ka-shing Foundation was founded and has awarded money to fund healthcare, educational opportunities, and offer humanitarian efforts to those in need. He also founded Shantou University, a privately funded educational institution in China. In total, Li has donated almost $4 billion to charitable endeavors.
“Li Ka-shing’s philanthropic work is an inspiration to all of us,” said Anne Liu, co-chair of the Hong Kong Ballet Guild. “His support for cornerstones of our society such as education and healthcare helps to develop positive and sustainable change.”
Li has pledged to eventually donate one-third of his entire fortune to various philanthropic causes.
