3SBIO (01530.HK) shares skyrocketed 14.90% in pre-market trading on Tuesday, following the announcement of a major licensing agreement with pharmaceutical giant Pfizer for its promising cancer drug SSGJ-707. The deal, potentially worth up to $6 billion, marks a significant milestone for the Chinese biopharmaceutical company and has sparked investor enthusiasm.

Under the terms of the agreement, 3SBIO will receive an upfront payment of $1.25 billion from Pfizer, with the potential for additional milestone payments of up to $4.8 billion. Pfizer will also make a $100 million equity investment in 3SBIO, further solidifying the partnership. The licensing deal grants Pfizer exclusive global rights to develop, manufacture, and commercialize SSGJ-707, a bispecific antibody targeting PD-1 and VEGF, which is currently undergoing clinical trials for various types of cancer.

This landmark deal not only provides 3SBIO with substantial immediate cash flow but also validates the potential of its drug pipeline. Investors are likely encouraged by the prospect of future royalties on sales of SSGJ-707, if approved, as well as the vote of confidence from a major player like Pfizer. The agreement is expected to close in the third quarter, subject to customary conditions and approvals, potentially setting the stage for continued positive momentum for 3SBIO's stock.