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Novartis is buying the rights to potential cardiovascular medicines from a Chinese biotech in a deal worth up to $5.2bn, as big pharmaceutical companies become increasingly reliant on Chinese innovation to replenish their drug pipelines.
The Swiss drugmaker has agreed its second collaboration deal with Shanghai-based Argo Biopharma, adding to the record total the sector has spent this year on drugs developed by Chinese biotechs.
Argo specialises in developing drugs using a method called small interfering RNA, or siRNA, to silence genes and stop them producing proteins that create disease.
Dr Shaun Coughlin, global head of cardiovascular and metabolism at Novartis biomedical research, said the technique is “an important paradigm shift in prevention and treatment of cardiovascular diseases”.
“Novartis is committed to advancing innovative treatments for patients with cardiovascular conditions, and our collaboration with Argo further strengthens our efforts to advance potential new therapies that address unmet medical needs,” he said.
Big pharma groups have flocked to China to buy up the rights to develop and commercialise early stage potential medicines outside China, excited by the scientific advances in the country, despite political tensions with their largest market, the US.
In July, the investment bank Jefferies said a record 18 per cent of licensing deals globally this year were for Chinese assets, with a record third of the deal value coming from China.
Argo will receive an upfront payment of $160mn, with the rest of the money dependent on reaching milestones in the development process and royalties if the drugs are approved and sold. It comes on top of a previous agreement worth up to $4bn.
Under this agreement, Novartis will acquire the rights to commercialise outside of China two early stage molecules that are designed to treat conditions caused by abnormal levels of lipids and fats in the blood that raise the risk of heart disease. It will also have the right of first negotiation to another drug in phase 2 trials in the US and China.
Novartis also said it had a “nonbinding intention” to participate in the biotech’s next round of equity financing, subject to due diligence.
Argo’s chief executive Dongxu Shu said the collaboration would help its ambition to become a global biotech.
