(Reuters) -Britain’s GSK and China’s Jiangsu Hengrui Pharmaceuticals have agreed on a $500 million deal to develop up to a dozen new medicines, including a promising candidate for a chronic lung condition, the drugmakers said on Monday.
The deal comes as GSK focuses on growing its pipeline to offset declining revenues from top drugs and vaccines amid slowing demand and rising competition. It is hoping to reach annual sales of over 40 billion pounds ($53.7 billion) by 2031.
Under the deal, GSK will gain an exclusive licence to Hengrui’s HRS-9821, which is being studied as a treatment for chronic obstructive pulmonary disease, with an option for 11 other treatments once they have cleared early-stage trials.
Hengrui said it could earn up to $12 billion in milestone payments if all options are exercised and targets are met under the GSK deal, which would cover therapy areas such as oncology, immunology, and inflammation.
GSK will pay the Chinese firm $500 million upfront.
“This deal reflects our strategic investment in programmes that address validated targets, increasing the likelihood of success, and with the option to advance those assets with the greatest potential for patient impact,” GSK Chief Scientific Officer Tony Wood said.
Access to HRS-9821 would support GSK’s ambition to treat patients across the widest spectrum of chronic obstructive pulmonary disease, the company said, adding that the drug provides an opportunity for a formulation in the form of a convenient, dry-powder inhaler.
GSK’s existing therapies for COPD include antibody treatment Nucala and the Trelegy Ellipta inhaler.
Shanghai-listed shares of Jiangsu Hengrui climbed 6.6% and its Hong Kong-listed stock jumped 8.5%, outperforming the blue-chip CSI 300 Index’s 0.1% fall and the Hang Seng Index’s 0.3% gain.
GSK shares were up 1.5% in London by 0830 GMT, against the 0.2% gain in the wider, blue-chip FTSE 100 index.
($1 = 0.7455 pounds)
(Reporting by Pushkala Aripaka in Bengaluru and Hong Kong newsroom; Editing by Sumana Nandy and Mrigank Dhaniwala)
