Pfizer acquires the rights to the Chinese biotech 3Sbio for 1.25 billion

Pfizer is investing $1.25 billion in a Chinese biotech. The US group obtained the rights to 3SBio's oncology drug by awarding the eponymous company an initial payment of $1.25 billion and a further potential $4.8 billion depending on the results that will be achieved in the next phase of trials.

The agreement grants Pfizer exclusive rights to develop and market the experimental drug, which is currently in the clinical phase for several types of cancer. The amount paid for the early phase represents a record for an outbound licensing agreement from China, and 3SBio, a Shenyang-based company, will be able to collect up to 4.8 billion in performance milestone payments upon achievement of all clinical and regulatory milestones. 3SBio plans to launch its first late-stage study in China within the year. Although Pfizer has not yet disclosed its clinical programme, it has announced that production of the active ingredient will take place in the US.

In addition to licensing, Pfizer will make a $100 million equity investment in 3SBio, which is listed in Hong Kong and is active in the sale of therapies for oncology, autoimmune diseases, renal failure, dermatology and other segments.

The news led to buying on 3SBio stock surged as much as 52% in Hong Kong, the largest gain recorded in a single day, continuing for the third consecutive session in positive territory. It was up +32.28% at the close, bringing the balance since the start of the year to +221.27%. Pfizer's stock traded in positive territory by about 2% on Wall Street.

The deal then drove the healthcare sector: the prices of ApicHope Pharmaceutical Group and Zhejiang Huahai Pharmaceutical hit daily highs of 20% and 10% respectively on the Chinese onshore market. Within the Hang Seng Composite Index, the healthcare sub-index was the best performer, rising by up to 3.8%. On the Hong Kong Stock Exchange, CSPC Pharmaceutical Group and Innovent Biologics also closed up 9.6% and 8.9%, respectively.