US PLUGS CHINESE PHARMA COLLABS

While several countries, including India and Japan, have faced prolonged trade frictions with the US over tariffs, the contest with China extends beyond tariffs into a second, more strategic front in the pharmaceutical sector. Here, the tussle is not only about trade tariffs but also about the deepening collaborations between US pharma giants and Chinese drugmakers. In recent years, several multinational companies have turned to China in search of the next wave of blockbuster drugs, drawn by the country’s rapid advances in R&D and its mature supply chain.

- Dr Milind Kokje

In July, GlaxoSmithKline (GSK) and China’s Hengrui Pharma announced a landmark deal under which GSK paid $500 million upfront, with the potential for nearly $12 billion in success-based milestone payments, royalties, and global sales. The agreement covers the option to co-develop up to 12 innovative drugs in areas such as respiratory diseases, oncology, immunology, and inflammation.

This was not an isolated case. Earlier, Pfizer struck a record deal with China’s 3SBio, paying $1.2 billion upfront—the largest such payment to date—along with commitments of up to $4.8 billion for China rights to a promising drug. Merck, too, entered the fray, approaching Hansoh Pharma to license a pre-clinical GLP-1 receptor candidate in a deal worth $1.9 billion. Even smaller Chinese firms have entered the fray. Akeso, a little-known decade old biotech firm, recently developed an innovative lung cancer drug. Even before that, Merck had approached China’s Hansoh Pharma to increase the investigational, pre-clinical oral small molecule GLP-1 receptor in a $1.9 billion worth deal.