Share prices of Chinese biopharmaceutical company CStone Pharmaceuticals surged by as much as 40 percent after it announced that it was partnering with American pharmaceutical giant Pfizer. The company, which mainly develops and commercializes immune-oncology and precision treatments, will be receiving an investment from Pfizer estimated to be worth around $480 million.
The deal is a huge boon for the Chinese firm and its plans to commercialize its leading antibody lung cancer drug candidate. The treatment, called sugemalimab, is set to undergo clinical trials to test its efficacy on other types of cancers. CStone is aiming to acquire marketing approval for the blockbuster drug by the end of the year.
"The fact that Pfizer comes in and put a lot of money on the table ... says a lot about our PD-L1 [sugemalimab]. We are pleased to have a big brother who has strong [financial] muscle to make sure it will reach the patients in need," CStone's chairman, Frank Jiang Ningjun, mentioned in an interview.
Under the deal, Pfizer has agreed to purchase a 9.9 percent stake in CStone for $200 million. In a filing submitted to the Hong Kong Stock Exchange on Wednesday, Pfizer had agreed to pay HK$13.37 per CStone share. This represents a 43.8 percent premium to the company's closing price on Tuesday.
Apart from the stake acquisition, Pfizer will also be gaining exclusive commercialization rights to CStone's leading cancer drug for mainland China. CStone has agreed to accelerate its clinical development and regulatory processing for the approval of sugemalimab.
The particular drug is currently undergoing phase three clinical trials for gastric and esophageal cancers. It is also under phase two clinical trials for the treatment of lymphoma. Pfizer had agreed to give CStone up to $280 million in additional funding if it reaches certain development milestones for the drug. CStone will still retain all intellectual rights to the treatment for sales made outside of China.
Foreign drug companies have recently been taking an increasing interest in the future of innovative treatments made by Chinese firms. In July, Pfizer had reached an agreement with CanSino Biologics for the promotion of its Menhycia meningitis vaccine in China. Last year, California-based Amgen bought a 20.5 percent stake in Beijing-based BeiGene. The deal also included a collaborative contract for 20 of BeiGene's oncology drugs.
