By Sherry Qin

Chinese biotech company 3SBio's shares surged early Tuesday after its around US$6 billion licensing deal with Pfizer to develop, manufacture and commercialize a promising cancer drug.

Shares were up 36% in Hong Kong to 19.78 Hong Kong dollars, equivalent to US$2.53, and on track to close at their highest level since 2018.

Pfizer said late Monday that it had entered into an exclusive licensing agreement with Shenyang-based 3SBio to develop, manufacture and commercialize 3SBio's cancer drug SSGJ-707 outside of China.

The drug is currently undergoing clinical trials in China for non-small cell lung cancer, metastatic colorectal cancer, and gynecological tumors.

3SBio and its units will retain the development, manufacturing, commercialization, and other exploitation rights of the product within mainland China. Pfizer will also have the option of commercialization rights in China.

Under the agreement, 3SBio will receive an upfront payment of US$1.25 billion and potential milestone payments up to US$4.8 billion.

The deal is expected to close in the third quarter, subject to regulatory and 3SBio shareholders' approvals. Pfizer said it planned to make a US$100 million equity investment in 3SBio after the transaction closes.

The deal provides an opportunity to bring the drug to patients globally and is "in the best interests of the company and its shareholders," 3SBio said in an exchange filing Tuesday.

Citi analysts reckon the deal progress and transaction consideration were better than the market expected. "Global expansion is the key investment thesis for the innovative pharma/biotech names," Citi analysts said in a research note, adding that the out-licensing trend should be minimally affected by geopolitical risks.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

May 19, 2025 23:58 ET (03:58 GMT)

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