Playing a surprisingly hot hand, BeyondSpring nails a $200M China deal in wake of a pivotal success
BeyondSpring has been on a roll lately.
Just a few weeks ago, the New York-based biotech shocked investors and analysts with how effective the company’s molecule, plinabulin, was on cancer patients’ longevity. Now, the biotech has forged a deal with a major player in the Asian market for the drug.
BeyondSpring announced this morning a commercialization and co-development agreement between its Chinese subsidiary Wanchunbulin and China’s Jiangsu Hengrui Pharmaceuticals.
Jiangsu Hengrui will have exclusive commercial and co-development rights for plinabulin in China and nearby regions, which include Hong Kong, Macau and Taiwan. BeyondSpring will retain 100% of the global rights for plinabulin outside of those regions.
Plinabulin, in combination with G-CSF, is currently getting a priority review by the FDA and is under review by the China National Medical Products Administration for the prevention of chemotherapy-induced neutropenia. BeyondSpring announced positive Phase III results earlier this month from its study of plinabulin in combination with chemotherapy drug docetaxel for the treatment of 2nd and 3rd line non-small cell lung cancer (NSCLC), specifically EGFR wild type.
That study revealed that just over 10% of patients on plinabulin survived 4 years on the drug, compared to none who received the placebo. BeyondSpring’s stock price has skyrocketed after the company’s announcement – from $9.63 on Aug. 3 to $29.35 as of this morning.
Today’s new deal only reinforces BeyondSpring’s belief in the potential of their seemingly blockbuster molecule.
“We are thrilled to continue executing on our global commercialization plans by entering into this partnership with Hengrui,” said Lan Huang, co-founder, chair and CEO of BeyondSpring. “We believe there are significant synergies in this partnership and believe it positions plinabulin to be developed for additional indications and to accelerate and increase peak sales in China.”
Lianshan Zhang, president of global R&D and member of the board of directors for Hengrui, commented that “[t]reatment and prevention of chemotherapy-induced hematological toxicities still represent a huge unmet medical need. We look forward to working with BeyondSpring to prepare the NDA filing for the NSCLC indication in China and to explore additional anti-cancer indications to benefit cancer patients in need.”
Wanchunbulin will retain the manufacturing rights of plinabulin and will book all plinabulin revenue in China, Hong Kong, Macau and Taiwan. Hengrui will receive a pre-determined percentage of the net sales each quarter.
As compensation, Wanchunbulin will receive an upfront payment of 200M RMB, or just over $30 million USD. An additional amount of up to 1.1 B RMB, or around $170 million USD, will be given, pending reaching regulatory and sales milestones. Hengrui will be responsible for all costs associated with commercialization of plinabulin in those specific Asian markets.
Wanchunbulin will take responsibility for 100% of the clinical and regulatory costs for the first two indications for plinabulin: prevention of CIN and 2nd/3rd line treatment of NSCLC (EGFR wild type). Hengrui will fund 50% of the clinical development costs for additional indications for plinabulin. Wanchunbulin will also continue leading protocol design and development for additional indications.
In connection with the signing of the collaboration, Hengrui will make an equity investment at 100M RMB, approximately $15 million USD, into the Wanchunbulin subsidiary at a pre-money valuation of 3.6B RMB, or $556 million USD.