Dive Brief:

• Pfizer has taken another step to broaden its presence in China, announcing Thursday a collaboration with LianBio, a Shanghai-based biotech launched by the hedge fund Perceptive Advisors this year.

• Under the deal, Pfizer will contribute as much as $70 million toward in-licensing and co-developing LianBio’s drugs. LianBio will pitch therapies for possible joint development, and Pfizer will get the first chance to negotiate commercial rights for partnered products.

• If the big pharma decides to take commercialization rights to products, the companies will come to new financial agreements that may include Pfizer working on marketing, development or regulatory submissions.

Dive Insight:

China, with its population of 1.4 billion, is an attractive target for drugmakers. That’s been especially true in the last couple of years, as the country enacted reforms to speed up pharmaceutical development and approval times, while also making it easier for foreign companies to win clearance for medicines already tested in other nations.

Pfizer’s latest deal is part of a larger plan to win over more of the world’s second-largest drug market. The big pharma was one of the investors in an oversubscribed, $310 million crossover financing that LianBio announced in October. A month earlier, Pfizer said it had invested $200 million in Hong Kong- based CStone Pharmaceuticals.

Perceptive Advisors started LianBio in August, after buying partial rights to multiple drugs for heart disease and cancer. At the time, Perceptive chief investment officer Adam Stone promised more deals for a company that might grow to more than 100 employees by next year.

The hedge fund intends for the company to buy rights to medicines in later stages of development, then sell them in China and seek to expand their use through more studies.

LianBio and Pfizer highlighted how their deal allows pairs the biotech’s reach in China with the larger company’s expertise developing and commercializing drugs.

Pfizer isn’t alone in recognizing the value of partnerships in China. Last year, Amgen took a 21% stake in Chinese oncology specialist BeiGene for $2.7 billion, and AstraZeneca started an investment fund with a Chinese investment bank that aims to raise $1 billion to support domestic and foreign companies trying to establish a foothold in the country.