Pfizer and CStone to collaborate for oncology therapies in China

CStone Pharmaceuticals, Pfizer Investment and Pfizer Hong Kong announced the formation of a strategic collaboration that encompasses a $200 million equity investment by Pfizer Hong Kong in CStone, a collaboration between CStone and Pfizer Investment for the development and commercialisation of CStone’s sugemalimab (CS1001, PD-L1 antibody) in mainland China, and a framework between CStone and Pfizer Investment to bring additional oncology assets to the Greater China market.

This collaboration provides financing to support CStone’s development of sugemalimab, a potential best-in-class PD-L1 antibody that is being developed for high-incidence cancer indications in China, including lung, gastric and esophageal cancers, among others. Pfizer will in-license and exclusively lead commercialisation of sugemalimab in China.

Key components and financial terms of the collaboration

• Pfizer obtains exclusive commercialisation rights to sugemalimab in mainland China, while CStone continues to lead clinical development and regulatory strategy for five selected indications.
• CStone is entitled to receive up to $280 million in milestone payments for sugemalimab and additional tiered royalties.
• CStone retains all development and commercialization rights to sugemalimab outside mainland China.
• Pfizer will invest $200 million, consisting of 115,928,803 CStone shares at a price of $1.725 per share (approximately HK$13.37 per share). As a result of its equity investment, Pfizer will hold a 9.90 per cent stake in CStone.
• CStone and Pfizer will together select late-stage (post-proof-of-concept) oncology assets for co-development in the Greater China market. These assets may come either from Pfizer’s pipeline or through joint in-licensing.
• CStone and Pfizer may pursue on a selected basis joint in-licensing arrangements for additional oncology assets for the Greater China market.

The transaction has received the necessary internal approvals of both companies. Closing is not subject to approval by CStone’s shareholders.

Goldman Sachs & Co. LLC is acting as financial advisor to CStone, and Cooley LLP served as legal advisor. Clifford Chance LLP served as Pfizer’s legal advisor.