CASI Pharmaceuticals Announces Receipt of An Updated Non-Binding Proposal to Acquire Entire China Business of the Company

Rhea-AI Summary

CASI Pharmaceuticals (NASDAQ:CASI) has received an updated non-binding proposal from CEO Dr. Wei-Wu He to acquire its entire China business operations and Asian rights (excluding Japan) for specific pipeline products. The proposed transaction, valued at $20.0 million, includes:

- Assumption of approximately $20.0 million in company debt
- Rights to pipeline products BI-1206, CID-103, and Thiotepa in Asia (excluding Japan)

This proposal updates the previous letter submitted on June 21, 2024, with adjustments to the scope and considerations for the pipeline products. A Special Committee of the board continues to evaluate this proposal and potential alternative strategic options. The company emphasizes that no decisions have been made, and there's no guarantee of a definitive agreement or transaction completion.

Positive

• Clear valuation of $20.0 million for the China business and Asian rights
• Potential debt relief through assumption of $20.0 million in company indebtedness

Negative

• Proposed sale would result in loss of entire China operations and Asian rights to key pipeline products
• Transaction value appears to primarily cover debt assumption with additional value
• Potential conflict of interest with CEO being the buyer

Insights

Financial Analyst

This proposal represents a significant restructuring of CASI's business with potentially concerning implications. The updated non-binding offer from CEO Dr. Wei-Wu He to acquire CASI's entire China operations and Asian rights (excluding Japan) to key pipeline products reveals troubling valuation dynamics. The proposed $20 million purchase price that includes assumption of $20 million in debt effectively values the equity of these operations at zero.

For context, CASI's current market capitalization is approximately $32.5 million, making this a transaction involving a substantial portion of the company's operations. The proposed structure raises serious questions about the underlying value and performance of CASI's China business segment. Particularly concerning is that the company's own CEO is the bidder, suggesting possible insider recognition of challenges not fully reflected in market valuations.

The board's formation of a Special Committee indicates proper governance procedures, but investors should closely scrutinize why CASI would potentially divest these operations without receiving new capital. Notably, the pipeline products included in this transaction (BI-1206, CID-103, and Thiotepa) represent significant potential future revenue streams if successfully developed. Their inclusion in this zero-equity-value transaction suggests possible development barriers or commercialization challenges not previously disclosed to investors.

Pharmaceutical Industry Expert

This proposed transaction dramatically reshapes CASI's strategic focus by potentially divesting its entire China business and Asian rights to three key pipeline candidates. BI-1206 (an anti-CD32B antibody), CID-103 (anti-CD47 antibody), and Thiotepa (a chemotherapy agent) represent important components of CASI's development portfolio, particularly in oncology applications.

The restructuring would fundamentally alter CASI's geographic footprint and pipeline asset distribution. By divesting these assets to the CEO, the company appears to be signaling significant challenges in either the Chinese pharmaceutical market landscape or with these specific development programs. For a small biopharmaceutical company, losing territorial rights to multiple pipeline assets substantially impacts future revenue potential and strategic optionality.

Most concerning is the implied valuation of these assets. The structure suggests either regulatory hurdles in China, development setbacks, or commercialization difficulties that haven't been fully communicated. The transaction's evolving nature, indicated by this being an updated proposal with adjustments to "the scope of, and considerations for" the pipeline products involved, hints at ongoing negotiations concerning product potential. Investors should question how CASI plans to maintain growth and development momentum without these China operations and pipeline rights in the Asia region.

BEIJING, CN / ACCESS Newswire / April 3, 2025 / CASI Pharmaceuticals, Inc. (Nasdaq:CASI, "CASI"), a Cayman incorporated biopharmaceutical company focused on developing and commercializing innovative therapeutics and pharmaceutical products, announced that its special committee of the board of directors (the "Special Committee") has received an updated preliminary non-binding proposal letter (the "Proposal Letter"), dated April 2, 2025, from Dr. Wei-Wu He, Chairman of the board of directors and CEO of the Company, to acquire the entire business operations of the Company in China and all license-in, distribution and related rights in Asia (excluding Japan) related to certain pipeline products of the Company, including BI-1206, CID-103 and Thiotepa, for an aggregate purchase price of $20.0 million, which shall include assumption of approximately $20.0 million of indebtedness of the Company (the "Proposed Transaction").

The Proposal Letter updates the preliminary non-binding proposal letter submitted by Dr. He to the Company on June 21, 2024. The Proposal Letter conveys Dr. He's intent to make certain adjustment to the scope of, and considerations for, the pipeline products involved in the Proposed Transaction based on latest information disclosed by the Company.

As previously announced, the board of directors of the Company had formed the Special Committee to evaluate the Proposed Transaction, or any alternative strategic option that the Company may pursue. The Special Committee will continue to evaluate the Proposed Transaction in light of the latest development.

The board of directors cautions the Company's shareholders and others considering trading the Company's securities that no decisions have been made with respect to the Proposal Letter, the Proposed Transaction, or any alternative strategic option that the Company may pursue. There can be no assurance that any definitive agreement relating to the Proposal Letter will be entered into between the Company and Dr. He, or that the Proposed Transaction or any other similar transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to the Proposed Transaction or any other transaction, except as required under applicable law.

About CASI Pharmaceuticals

CASI Pharmaceuticals, Inc. is a biopharmaceutical company focused on developing and commercializing innovative therapeutics and pharmaceutical products in China, the United States, and throughout the world. The Company is focused on acquiring, developing, and commercializing products that augment its focus on hematology oncology therapeutics and therapeutics for organ transplant rejection and autoimmune disease, as well as other areas of unmet medical need. The Company intends to execute its plan to become a leader by launching medicines in the Greater China market, leveraging the Company's China-based regulatory and commercial competencies and its global drug development expertise. The Company's operations in China are conducted through its wholly owned subsidiary, CASI Pharmaceuticals (China) Co., Ltd., located in Beijing, China. More information on CASI is available at www.casipharmaceuticals.com.

CASI Forward-Looking Statements

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as the Company's strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the "SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: uncertainties related to the non-binding proposal to acquire the Company's certain business operations in China; our recurring operating losses have raised substantial doubt regarding our ability to continue as a going concern; the possibility that we may be delisted from trading on The Nasdaq Capital Market if we fail to satisfy applicable continued listing standards; the volatility in the market price of our ordinary shares; the risk of substantial dilution of existing shareholders in future share issuances; the difficulty of executing our business strategy on a global basis including China; our inability to enter into strategic partnerships for the development, commercialization, manufacturing and distribution of our proposed product candidates or future candidates; legal or regulatory developments in China that adversely affect our ability to operate in China; our lack of experience in manufacturing products and uncertainty about our resources and capabilities to do so on a clinical or commercial scale; risks relating to the commercialization, if any, of our products and proposed products (such as marketing, safety, regulatory, patent, product liability, supply, competition and other risks); our inability to predict when or if our product candidates will be approved for marketing by the U.S. Food and Drug Administration, European Medicines Agency, PRC National Medical Products Administration, or other regulatory authorities; our inability to receive approval for renewal of license of our existing products; the risks relating to the need for additional capital and the uncertainty of securing additional funding on favorable terms; the risks associated with our product candidates, and the risks associated with our other early-stage products under development; the risk that result in preclinical and clinical models are not necessarily indicative of clinical results; uncertainties relating to preclinical and clinical trials, including delays to the commencement of such trials; our ability to protect our intellectual property rights; the lack of success in the clinical development of any of our products; and our dependence on third parties; the risks related to our dependence on Juventas to conduct the clinical development of CNCT19 and to partner with us to co-market CNCT19; risks related to our dependence on Juventas to ensure the patent protection and prosecution for CNCT19; the risk related to the Company's ongoing development of and regulatory application for CID-103 with respect to the treatment of antibody-mediated rejection for organ transplant and the license arrangements of CID-103; risks relating to interests of our largest shareholder and our Chairman and CEO that differ from our other shareholders; risks related to the development of a new manufacturing facility by CASI Pharmaceuticals (Wuxi) Co., Ltd. and risks related to our disagreement with Acrotech with respect to the termination of agreements regarding EVOMELA^®. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided herein is as of the date of this announcement, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law. We caution readers not to place undue reliance on any forward-looking statements contained herein.

EVOMELA^® is proprietary to Acrotech Biopharma Inc. and its affiliates. FOLOTYN^®is proprietary to Acrotech Biopharma Inc and its affiliates. The Company is currently involved in disputes and legal proceedings related to certain pipeline products, including EVOMELA^® and CNCT-19.Please refer to the Company's earlier SEC filing for further information.

COMPANY CONTACT:

Rui Zhang
CASI Pharmaceuticals, Inc.
240.864.2643
ir@casipharmaceuticals.com

SOURCE: CASI Pharmaceuticals

View the original press release on ACCESS Newswire

FAQ

What is the value of CASI Pharmaceuticals' proposed China business acquisition?

The proposed acquisition is valued at $20.0 million, which includes the assumption of approximately $20.0 million in company debt.

Which pipeline products are included in CASI's proposed transaction?

The transaction includes Asian rights (excluding Japan) for pipeline products BI-1206, CID-103, and Thiotepa.

Who proposed to acquire CASI Pharmaceuticals' China operations?

Dr. Wei-Wu He, CASI's Chairman and CEO, submitted the non-binding proposal to acquire the company's China operations.

How does the April 2025 CASI proposal differ from the June 2024 proposal?

The new proposal includes adjustments to the scope and considerations for the pipeline products based on the company's latest disclosures.