Recent deals from Pfizer and Bristol Myers Squibb hint at Big Pharma’s more collaborative approach to partnering with Chinese companies.
Two recent deals across biopharma point to an emerging pattern of partnerships between Big Pharma and Chinese biotechs—one that puts a heavy emphasis on collaboration and allows the advancement of broad drug pipelines.
Last month, Bristol Myers Squibb put more than $15 billion on the line to advance a 13-asset drug pipeline with Hengrui Pharma. A couple of weeks later, fellow industry giant Pfizer also took a trip to China, offering up to $10.5 billion to assemble a 12-molecule pipeline with Innovent Biologics.
Aside from the immediately apparent—that these partnerships are much broader than usual, involving a larger number of candidates—these two deals also involve a greater degree of input from the pharma companies. Instead of just investing money, both Pfizer and BMS put assets of their own into the mix, resulting in a collaborative lineup of drug candidates.
The Pfizer partnership, in particular, is a “creative effort” to build out the pharma’s pipeline, Leerink Partners said in a May 29 note to investors. “The partnership includes eight Innovent-originated early-stage programs and four Pfizer-proposed discovery programs,” the analysts explained.
Notably, Pfizer has agreed to a cost- and profit-sharing model across the U.S. and Europe for its four assets and surrendered Greater China rights to Innovent.
Innovent, meanwhile, has conceded the full exclusive global rights of four assets to Pfizer—even in Greater China territories, across which Chinese companies typically opt to retain rights to these home-grown molecules. Pfizer’s ownership to the four other Innovent-originated molecules will apply only outside Greater China.
BMS and Hengrui forged a similarly collaborative partnership last month, with each contributing four assets across the hematology, oncology and immunology spaces. The remaining five assets under the partnership will be “jointly discovered and developed” by the companies, according to a news release at the time.
Unlike the Pfizer deal, however, licensing terms of the BMS-Hengrui agreement are much more clearly defined along geographical lines. BMS will own Hengrui’s molecules outside mainland China, Hong Kong and Macau, while the Chinese biotech will have rights to the pharma’s candidates inside these territories.
It is yet unclear how BMS and Hengrui intend to handle commercial rights to the five assets that they will jointly advance.
“In sharing the inherent risks and lower [probability of success] associated with early-stage candidate development, today’s deal slightly derisks outcomes for BMS,” BMO Capital Markets told investors in a May 12 note, pointing in particular to “accelerated clinical timelines in China,” which could “limit potential downside.”
