Beigene Inks $2.2 Billion Deal with Novartis

Shares of Beigene soared on Tuesday after scoring a cancer drug development deal with Novartis.

The deal, announced at the annual J.P. Morgan Healthcare Conference, is worth up to $2.2 billion.

Novartis will pay Beigene $650 million up front and make milestone payments to develop and sell its cancer drug, tislelizumab.

Beigene will receive up to $1.3 billion in regulatory milestone payments and $250 million after tislelizumab hits certain sales milestones. The biotech company will additionally receive royalties on future sales of the drug.

Beigene will also be responsible for ongoing clinical studies of tislelizumab. Novartis has agreed to funding new registrational, bridging or post-marketing studies in the territories where it’s responsible for the cancer drug.

Beigene previously partnered with Celgene to distribute the drug before Celgene’s acquisition by Bristol Myers Squibb.

“Novartis has a bold ambition to reimagine medicine and find new cures for cancer and blood disorders. This agreement expands on our strategy as the only company pursuing four different approaches to treating cancer: targeted therapy, radioligand therapy, cell and gene therapy, and immunotherapy. No other company has this range of therapeutic approaches, and the opportunity to combine them to offer the best outcomes for each patient,” said Susanne Schaffert, PhD, President, Novartis Oncology.

“We are excited about collaborating with BeiGene, a leading global biotechnology company with roots in China, to bring tislelizumab to patients around the world, and pair it with our extensive portfolio and pipeline to develop transformative combination therapies for patients.”

According to a press release, tislelizumab is approved by the China National Medical Products Administration (NMPA) as a treatment for certain patients with classical Hodgkin’s lymphoma and metastatic urothelial carcinoma.

BeiGene has filed three supplemental new drug applications for tislelizumab in China for first-line treatment of patients with advanced squamous NSCLC in combination with chemotherapy, first-line treatment of patients with advanced non-squamous NSCLC in combination with chemotherapy, and previously treated unresectable HCC.

SVB Leerink analyst Andrew Berens, who has an “outperform” rating on Beigene stock has said, “We view this deal as a win-win for both companies. Beigene will be able to leverage Novartis’ significant global infrastructure to commercialize tislelizumab, upon approval, outside China, while Novartis gains a near-term approvable anti-PD-1 agent with positive overall survival data from the non-small cell lung cancer global Phase 3 (study).”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.