The pharma giant entered an exclusive agreement with the Chinese biotech to gain rights to a cancer bispecific drug candidate.
Pfizer announced Monday that it will be partnering with Chinese biopharma 3SBIO in a licensing agreement, underscoring continued demand in the pharma industry for Chinese innovation amid trade tensions.
The move comes weeks after the Trump administration announced global tariffs, and is set to unveil additional tariffs which could impact Chinese pharmaceutical profit margins.
Pfizer will pay 3SBIO $1.25 billion upfront for the development, manufacturing and global commercialization of a bispecific antibody dubbed SSGJ-707, which targets PD-1 and VEGF. The drug is currently undergoing several clinical trials in China for non-small cell lung cancer, metastatic colorectal cancer and gynaecological tumors.
As part of the agreement, Pfizer will have an exclusive license for the commercialization of the drug globally excluding China; but also has the option of securing commercialization rights in China later.
In addition to the upfront payment, 3SBIO is set to receive up to $4.8 billion in milestone payments as well as tiered double-digit royalties if SSGJ-707 is approved.
Upon closing the deal, Pfizer said it will make a $100 million equity investment in 3SBIO based on a securities subscription agreement between the parties.
In a statement, Pfizer noted that the drug substance for SSGJ-707 will be manufactured in Sanford, North Carolina, and the drug product in McPherson, Kansas.
3SBIO said the drug has received clearance from the U.S. Food and Drug Administration for its Investigational New Drug application.
The news comes as potential threats of 25% tariffs on pharma are swaying drugmarkers to invest in manufacturing more products in the U.S.
The deal, however, also underscores the demand for Chinese innovation and products among global pharmaceutical companies as trade tensions between the U.S. and China continue to rise.
Pfizer currently has a strong base of 13 manufacturing sites across the country, and CEO Albert Bourla said at the TD Cowen’s 45th annual healthcare conference in March that the drugmaker may bring additional resources to the country if needed.
Last month, China announced that it would raise levies on imports on all U.S. goods to 125%, in response to the Trump administration’s decision to impose tariffs on the world’s second largest economy.
Pfizer itself has been operating in China for 36 years, and has a presence in over 300 cities across the country. It currently has one manufacturing center, three research and development sites and one innovation center in China.
Additionally, the Trump administration has launched an investigation into whether imports of pharmaceutical products threaten national security in the U.S.
Shares of 3SBIO surged 208% as of Monday afternoon on the U.S. market. Pfizer’s shares also slightly increased after the announcement.
