Investment in Equity Securities, at Fair Value and Long-term Investments

9 Months Ended

Sep. 30, 2022

Investment in Equity Securities, at Fair Value and Long-term Investments

Investment in Equity Securities, at Fair Value and Long-term Investments

5.            Investment in Equity Securities, at Fair Value and Long-term Investments

Investment in Equity Securities, at Fair Value

The following table summarizes the Company’s investment in equity securities at fair value as of September 30, 2022 and December 31, 2021, respectively:

				Gross
(In thousands)				unrealized		Aggregate fair
September 30, 2022	Classification	Cost		gains /(losses)		value
MaxCyte - equity interest	Investment	$	—	$	2,453	$	2,453
BioInvent - equity interest	Investment	$	4,337	$	(481)	$	3,856
Total						$	6,309
				Gross
(In thousands)				unrealized		Aggregate fair
December 31, 2021	Classification	Cost		gains		value
MaxCyte - equity interest	Investment	$	—	$	3,866	$	3,866
BioInvent - equity interest	Investment	$	5,661	$	341	$	6,002
Total						$	9,868

In the second quarter of 2022, the Company sold 275,000 ordinary shares of BioInvent for $1.3 million. The Company recognized gains of $131,000 in consolidated statements of operations and comprehensive loss.

For the three and nine months ended September 30, 2022, the Company recognized unrealized gains of $0.6 million and unrealized losses $2.5 million, respectively, on the Company’s equity investments. For the three and nine months ended September 30, 2021, the Company recognized unrealized losses of $3.7 million and $0.3 million, respectively, on the Company’s equity investments. Unrealized gains (losses) on the Company’s equity investments are recognized as change in fair value of investment in the consolidated statements of operations and comprehensive loss.

Long-term Investments

Long-term investments as of September 30, 2022 and December 31, 2021 consisted of the following:

					Gross		Foreign
			Gross		unrealized		currency
September 30, 2022			unrealized		losses (including		translation		Aggregate
(In thousands)	Cost		gains		impairment)		adjustment		fair value
Available-for-sale debt securities:
Alesta Therapeutics B.V. - convertible loan	$	261	$	15	$	—	$	—	$	276
Securities measured at fair value:
BioInvent International AB - warrants		656		—		(194)		—		462
Cleave Therapeutics, Inc. - convertible loan		5,500		458		—		—		5,958
Equity securities without readily determinable fair value:
Alesta Therapeutics B.V. - equity interests		2,250		—		(865)		—		1,385
Juventas Biotechnology (Tianjin) Co., Ltd. - equity interests		23,500		6,958		—		(1,569)		28,889
Juventas Biotechnology (Tianjin) Co., Ltd. - put option		491		—		(521)		30		—
Prepayment for investment:
Precision Autoimmune Therapeutics Co., Ltd - equity interests		2,962		—		—		(152)		2,810
Total	$	35,620	$	7,431	$	(1,580)	$	(1,691)	$	39,780

					Gross		Foreign
			Gross		unrealized		currency
December 31, 2021			unrealized		losses (including		translation		Aggregate
(In thousands)	Cost		gains		impairment)		adjustment		fair value
Available-for-sale debt securities:
Alesta Therapeutics B.V. - convertible loan	$	261	$	7	$	—	$	—	$	268
Securities measured at fair value:
BioInvent International AB - warrants		656		—		(65)		—		591
Cleave Therapeutics, Inc. - convertible loan		5,500		76		—		—		5,576
Equity securities without readily determinable fair value:
Alesta Therapeutics B.V. - equity interests		2,250		—		(865)		—		1,385
Juventas Biotechnology (Tianjin) Co., Ltd. - equity interests		23,500		6,958		—		1,850		32,308
Juventas Biotechnology (Tianjin) Co., Ltd. - put option		491		—		(521)		30		—
Total	$	32,658	$	7,041	$	(1,451)	$	1,880	$	40,128

Investment in Precision Autoimmune Therapeutics Co., Ltd., (“PAT”)

In May 2022, CASI China entered into an agreement for the investment in PAT in the amount of RMB 20.0 million (approximately $3.0 million) in cash during PAT’s first equity financing. CASI China has paid all the consideration in June 2022. Upon consummation of such equity financing, CASI China will hold 15% equity interests of PAT and will hold one third of the board seats.

As of September 30, 2022, the transaction had not been consummated as the consideration from other investors has not been paid in full.

Sales of Investment in Juventas Biotechnology (Tianjin) Co., Ltd.

In September 2022, CASI Biopharmaceuticals entered into an equity transfer agreement (the “Equity Transfer Agreement”) with Shenzhen Jiadao Gongcheng Equity Investment Fund (Limited Partnership) (“Jiadao Gongcheng”), a third party limited partnership enterprise incorporated under the laws of China, pursuant to which CASI Biopharmaceuticals agreed to transfer to Jiadao Gongcheng all of its equity interest in Juventas in the amount of RMB 240.9 million (approximately $33.8 million). Pursuant to the Equity Transfer Agreement, CASI Biopharmaceuticals will transfer all of its rights and obligations to Jiadao Gongcheng, and Jiadao Gongcheng would make payment in two equal installments, with the first installment paid after signing the Equity Transfer Agreement and the second installment paid shortly after the completion of the registration with competent government authorities. As of September 30, 2022, CASI Biopharmaceuticals received the first installment of RMB 120.4 million (approximately $16.9 million) as advance. The transaction had not been consummated as the registration with competent governmental authorities of the transaction was still in process.