Securities Times｜$1.25 Billion Upfront Payment: SSE STAR Market Pharma Company Sets New Record in Global Expansion

Translated from Securities Times, Zhang Shuxian

On May 20, the announcement of the innovative pharmaceutical company Sunshine Guojian Pharmaceutical (Shanghai) Co., Ltd. (688336) on the SSE STAR Market revealed that the company and its affiliates 3SBio Group and Shenyang Sunshine Pharmaceuticals Co., Ltd. jointly granted the exclusive development, production, and commercialization rights of SSGJ-707, a bispecific antibody targeting PD-1/VEGF, to Pfizer around the world (excluding the Chinese mainland). Under the agreement, Pfizer shall pay a non-refundable and non-deductible upfront payment of 1.25 billion US dollars, up to 4.8 billion US dollars in development, regulatory approval, and sales milestone payments, and a two-digit percentage tiered sales share calculated based on product sales in authorized regions.

The "upfront payment of 1.25 billion US dollars" of this licensing transaction once again set a new record for the upfront payment of domestic innovative drugs going global and reached another milestone for domestic pharmaceutical companies to enter the global market.

SSGJ-707 is a bispecific antibody targeting PD-1/VEGF. Phase II clinical analysis data showed that SSGJ-707 achieved an excellent objective response rate and disease control rate in the treatment of patients with non-small cell lung cancer, enjoying the potential to be best-in-class. In April this year, SSGJ-707 was recognized as a breakthrough therapy drug by the National Medical Products Administration. At present, SSGJ-707 monotherapy as the first-line treatment for non-small cell lung cancer is during Phase III clinical trials, while the combination chemotherapy as the first-line treatment for non-small cell lung cancer, the metastatic colorectal cancer indication, and the advanced gynecological tumor indication are during Phase II clinical trials.

In recent years, thanks to the support of domestic pharmaceutical policies and capital market financing policies for innovative drug R&D, domestic innovative pharmaceutical companies have achieved leapfrog development. According to statistics, biopharmaceutical companies on the SSE STAR Market have promoted 27 domestic Class 1 innovative drugs to be approved for marketing, and 32 indications of 16 products have been included in breakthrough treatment varieties, filling domestic gaps and changing the global medical landscape in key treatment areas such as tumors, cardiovascular and cerebrovascular diseases, and rare diseases.

Meanwhile, domestic innovative drugs are gaining increasingly wide recognition in the international market. The license-out business has become a new channel for innovative pharmaceutical companies to expand their profit sources and an inevitable way for Chinese pharmaceutical companies to go global and become world-leading players. According to incomplete statistics, a total of 11 innovative pharmaceutical companies on the SSE STAR Market have granted overseas rights and interests of innovative drugs to overseas enterprises through the license-out model.

Sichuan Biokin Pharmaceutical Co., Ltd. (688506) licensed a patent for an ADC to BMS, a multinational pharmaceutical company. The upfront payment of 800 million US dollars was fully received in 2024, which not only supported the company's turnaround from losses to profits in the second year after listing but also set a new record for the transaction amount of China's new ADCs "going global". Bio-Thera Solutions, Ltd. (688177), as a leading enterprise of domestic biosimilars going global, has realized about 14 license-out cooperation projects worldwide regarding 5 varieties: Bevacizumab, Tocilizumab, Ustekinumab, Golimumab, and Mepolizumab. The partners include well-known overseas pharmaceutical companies such as Sandoz, Biogen, and Hikma. Furthermore, the company has successfully promoted the marketing of Bevacizumab and Tocilizumab developed by it in China, the United States, and Europe. It is expected to accelerate the establishment of a foothold in the global market with Chinese innovation under the empowerment of high-quality partners.

The above information is provided for reference purposes only and does not constitute investment advice.