Pfizer Inc. Strikes Major $6 Billion Deal With China’s 3sbio For Cancer Drug Development
$PFE
Pfizer Inc. (NYSE:PFE) has recently announced a significant licensing agreement with 3SBio Inc., a biopharmaceutical company based in China. The deal, valued at approximately $6 billion, focuses on the development, production and commercialization of a promising cancer treatment.
The agreement centers around the drug candidate SSGJ-707, which is currently undergoing multiple clinical trials in China. This drug is being tested for its efficacy against non-small cell lung cancer, metastatic colorectal cancer and gynecological tumors. 3SBio is set to initiate the first Phase III trial in China later this year, which is a critical step towards the commercialization of the drug.
Under the terms of the agreement, 3SBio will receive an upfront payment of $1.25 billion from Pfizer. Additionally, 3SBio could earn up to $4.8 billion more in milestone-based payments, which are contingent upon various development, regulatory and commercial achievements. If the drug receives market approval, 3SBio will also receive tiered double-digit royalties on sales.
Pfizer’s investment doesn’t stop at the licensing agreement. The company will also invest $100 million in 3SBio through an equity purchase, further cementing the strategic nature of this partnership. This move is part of a broader trend among major pharmaceutical companies to collaborate with Chinese firms, aiming to leverage local expertise and potentially speed up the development and commercialization processes.
In the fiscal year 2024, Pfizer’s oncology segment reported revenues exceeding $4 billion, marking a 27% increase year-over-year. This new partnership with 3SBio is expected to further bolster Pfizer’s position in the oncology market, potentially leading to increased revenue streams from new cancer therapies.
The announcement of this deal had an immediate positive impact on 3SBio’s market performance, with shares surging by as much as 52% in Hong Kong. This record gain underscores the market’s optimistic view of the partnership’s potential. The company continues to invest in promising oncology treatments, this partnership could play a pivotal role in Pfizer’s growth strategy in the coming years.
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