- Total deal value up to $12 billion
- Hengrui Pharma shares jump 24%
- Complements GSK’s existing pipeline
GSK (GSK) has entered into an agreement with China’s largest drugmaker, Hengrui Pharmaceuticals (1276:HKG), to develop a dozen new medicines including a potential ‘best in class’ treatment for COPD (chronic obstructive pulmonary disease).
The news sent shares in the Chinese drug maker up 24% in Asian trading while GSK added 18p or 1.3% to £14.10 in early dealings.
GSK believes the programmes will add ‘significant’ growth opportunities beyond 2031, by which time the company is aiming to deliver annual sales of more than £40 billion, compared with the £31.3 billion sales generated in 2024.
Tony Wood, GSK’s chief scientific officer, said: ‘This deal reflects our strategic investment in programmes that address validated targets, increasing the likelihood of success, and with the option to advance those assets with the greatest potential for patient impact.’
COMPLEMENTARY PROGRAMMES
The programmes were selected to complement GSK’s extensive Respiratory, Immunology & Inflammation, and Oncology pipeline. GSK will pay $500 million in upfront fees across the programmes.
The key COPD asset HRS-9821 has already demonstrated positive effects in clinical trials and gives GSK the opportunity for a convenient dry-powder inhaler formulation which strategically fits its established inhaler portfolio.
The agreements include a collaboration to generate a further 11 new medicines with Hengrui Pharma leading the development to phase 1 trials including patients outside China.
GSK will then have an exclusive option to undertake further development and commercialisation worldwide, excluding mainland China Hong Kong, Macau and Taiwan.
The potential value of the programmes should all of them be optioned and receive milestone payments is approximately $12 billion, said GSK. In addition, the Chinese company will be eligible to receive tiered royalties on global product net sales outside of the excluded regions.
Analysts at Citgroup led by John Yung observed that the potential deal value of $12 billion is the largest ever for a Chinese drug innovator.
In 2024 GSK paid $1 billion to acquire US biotechnology firm Aiolos Bio to obtain a potential asthma treatment that Aiolos had licensed from Hengrui Pharma.
