(Yicai Global) July 21 -- Shares of Hisun Pharmaceutical jumped today after the more than 50-year-old Chinese drugmaker said that it will buy the remaining equity in its former joint venture with Pfizer to improve its profitability.

Hisun's stock price [SHE:600267] climbed by the daily limit of 10 percent to CNY17.18 (USD2.50) this morning, the highest since late April.

The drug ingredient maker will purchase the 49 percent stake in Hanhui Pharmaceutical, formerly known as Hisun-Pfizer Pharmaceuticals, for up to CNY4.5 billion (USD643.6 million), more than double the value from two years ago, from an entity under Hillhouse Capital, the Zhejiang province-based buyer said in a statement yesterday.

The purchase should help Hisun to integrate its upstream and downstream operations, the firm said, without further specifying the reasons behind the costly acquisition.
The two medical companies founded the USD295-million JV in May 2012 to produce generic drugs for global use. Hisun had 51 percent of the equity then.

But the union lasted less than six years. New York-headquartered Pfizer sold its stake in October 2017 for USD286.4 million to an investment fund under the Asian private equity firm as the Chinese partner didn't participate in bidding.

For the latest deal, Hisun will use a combination of cash, new shares, and convertible bonds. That should leave Hillhouse Capital with more than 5 percent of Hisun's shares, priced at CNY13.15 apiece.

Last year, Hisun made a net loss of CNY2.5 billion when excluding nonrecurring gains and losses.

Editor: Emmi Laine