Shares of cancer drugs developer CStone Pharmaceuticals shot up as much as 40 per cent after it unveiled a collaboration deal worth up to US$480 million with American drugs giant Pfizer.
The deal is a shot in the arm for Shanghai-based CStone, giving it the much-needed funds to commercialise its lead antibody lung cancer drug candidate sugemalimab and conduct clinical trials for other cancers. It is hoping to seek marketing approval for the drug by the year-end.
“The fact that Pfizer comes in and put a lot of money on the table … says a lot about our PD-L1 [sugemalimab],” chairman Frank Jiang Ningjun told the Post. “We are pleased to have a big brother who has strong [financial] muscle to make sure it will reach the patients in need.”
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Pfizer has agreed to pay US$200 million for a 9.9 per cent stake, CStone said in a filing to Hong Kong’s bourse on Wednesday. The US giant paid HK$13.37 a share, a 43.8 per cent premium to Tuesday’s closing price of HK$9.3, it added.
After opening 39.6 per cent higher, the stock shed most of the gains and closed the morning session 12.3 per cent higher at HK$10.44.
As part of the deal, Pfizer obtained exclusive commercialisation rights to sugemalimab in mainland China, while CStone will undertake clinical development and regulatory approval work on the drug candidate on five types of cancers.
CStone is currently conducting phase three clinical trials in China on sugemalimab for gastric and esophageal cancers and a phase two study for lymphoma.
In return, CStone is entitled to receive up to US$280 million if it reaches certain drug development milestones, and royalties related to drug sales. CStone retains all rights to sugemalimab outside mainland China.
In addition, CStone and Pfizer will together select late-stage oncology assets for co-development targeting the mainland China, Hong Kong, Macau and Taiwan markets. They may come either from Pfizer’s pipeline or through joint in-licensing from other drug developers.
“This reminds me a little of when Amgen bought into BeiGene,” said Brad Loncar, chief executive of Kansas-based investment firm Loncar Investments and compiler of the Loncar China BioPharma Index. “Multinationals see that China has a bright future for innovative medicines.”
New York-based Pfizer has a big marketing presence but limited exposure to new drugs development in China, Loncar noted. In July, the firm agreed to promote Menhycia, CanSino Biologics’ meningitis vaccine candidate in China.
California-based Amgen last year paid US$2.7 billion for a 20.5 per cent stake in Beijing-based BeiGene. The pair agreed to collaborate on 20 oncology drugs candidates from Amgen’s innovative pipeline in China and globally.
CStone’s sugemalimab treatment was largely effective in the phase three clinical trial and could become the first drug of its kind in China to be to approved for non-small cell lung cancer, Jiang told the Post in an interview last month.
The study, involving 480 stage-four lung cancer patients, showed it was able to reduce the risk of disease progression or death by half, compared to those receiving standard therapies, according to Jiang.
China recorded some 774,000 new lung cancer cases in 2018, almost one-fifth of all cancer cases in the nation, followed by colon, stomach, liver and breast cancers.
More from South China Morning Post:
- Chinese biotech CStone on course to launch lung cancer drug after successful clinical trial
- Fierce competition in China’s nascent immuno-therapy cancer drugs market could compromise safety, say analysts
- BeiGene, once a target for short sellers, attracts jumbo deal from Amgen, hedge fund eyeing China’s red-hot pharmaceutical sector
This article Chinese cancer drugs developer CStone’s shares surge on US$480 million deal with US pharma giant Pfizer first appeared on South China Morning Post