Pfizer Strengthens Immuno-Oncology Portfolio with $200 Million Investment in Chinese Startup

By Ruchi Jhonsa, Ph.D.

Even though Pfizer holds a solid reputation in oncology, it lags in the immunotherapy sector with just one immune-oncology drug in the market. Bavencio, an anti-PD-1 checkpoint therapy that Pfizer jointly developed with Merck, entered the cancer market as Merkel cell carcinoma and bladder cancer therapy and got approved for kidney cancer and maintenance therapy for metastatic bladder cancer last year. Despite being approved for three different indications, the drug is jostling for market share with other contenders such as Merck’s Keytruda and BMS’s Opdivo that arrived earlier and established their hold on the checkpoint inhibitor market.

To gain a better hold on the immunotherapy sector, Pfizer is now developing Bavencio as combination therapy but is also simultaneously searching for other immune-checkpoint blockades in case the Bavencio combo bites the dust. In that vein, on 30th September, the company made a US$ 200 million equity investment through its subsidiary, Pfizer Hong Kong, in China-based CStone Pharmaceuticals for the development and commercialization of an anti-PD-L1 therapy, sugemalimab in China. Pfizer now holds a 9.9% stake in CStone.

Sugemalimab is an anti-PD-L1 antibody, which achieved an overall response rate of 43.3% and a one-year overall survival rate of 72.4% with a low risk of immunogenicity and potential toxicities in a study in China. It is currently being developed for high-incidence cancer indications in China, including gastric and esophageal cancer. The company also secured the USFDA’s blessings to begin the trial in the US last month.

With this deal, Pfizer will get exclusive commercialization rights to sugemalimab in Mainland China and also a chance to develop some of its or CStones’ oncology assets in the Asian market. While China is not new terrain for Pfizer, the deal certainly helps the company establish its strong foothold in the Chinese healthcare market that was worth US$1.1 trillion in 2019. Besides, the company gets an edge in dealings with domestic regulators and the Chinese government.

CStone, on the other hand, that was blessed with huge series A and B financing in the past and bagged HK$2.1 million ($266 million) when it went public on the Hong Kong Stock Exchange last year, will now be able to sell the drug across a vastly expanded number of markets in China as well as expand research and development of the drug in other indications, all thanks to Pfizer’s whopping investment and extensive infrastructure. In 2016, Pfizer set up a biotech center in China, which would “help support China’s aim to increase the complexity and value of its manufacturing sector by 2025.”

“Pfizer’s investment in CStone is a statement of its confidence in the potential of our anti-PD-L1 treatment and recognition of our research and development capabilities,” said Frank Jiang, M.D., Ph.D., Chairman and Chief Executive Officer of CStone. “By joining forces with Pfizer and leveraging its commercialization infrastructure, we will ensure that patients across a vastly expanded number of markets in China have quicker access to our highly differentiated PD-L1 treatment. In addition, we have advanced our transformation into a full-fledged biopharmaceutical company by forging a collaboration that will enable us to accelerate (the) development and commercialization of globally innovative therapies for Chinese patients.”

Besides showering CStone with this whopping investment, Pfizer could owe its new partner up to $280 million in milestone payments, plus royalties from sales if it reaches the market. The duo will also select late-stage cancer drugs that will be jointly developed for commercialization in China. Besides, they will pursue joint-in licensing arrangements for additional oncology assets for the Greater China market.

Pharmaceuticals have faced a hard time getting their drugs in the Chinese markets due to slow processing and regulatory roadblocks. Pfizer had to close its vaccine business in 2015 after a license for its top-selling vaccine Prevenar was not renewed. In this scenario, many pharma giants are looking for smart ways to tap into the world’s second-largest healthcare sector. Making collaborations with in-house companies is one of them. In July this year, Amgen poured out $2.7 billion to tap into BeiGene’s R&D expertise in China. At the same time, AbbVie signed a pact with Beijing based Jacobio pharmaceuticals for SHP2 inhibitors and three months later, entered in an agreement with I-Mab for CD47 inhibitor.

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