Fosun Pharma Gains Full Control of Fosun Kite as Gilead Exits; New Entity to Be Renamed Fosun Careway

Sep 24, 2024 16:27 CST Updated 16:27

Fosun Pharmaceutical

Healthcare Industry Group

Fosun Kairos

Developer of Tumor Immune Cell Therapy Technologies and Products

On September 13, 2024, Fosun Pharmaceutical announced that its holding subsidiary, Fosun Pharmaceutical Industry, plans to acquire a 50% stake in Fosun Kite from Kite Pharma for a cash payment of US$27 million. After the transfer is completed, Fosun Pharmaceutical will hold 100% of the shares, and Fosun Kite will be renamed. The new company name is proposed to be Fosun Kite Biotechnology Co., Ltd.

On the same day of signing the "Equity Transfer Agreement," Fosun Kite and Kite revised the original licensing agreement. According to the revised content, Fosun Kite obtained a license from Kite for the licensed territory.(Mainland China, Hong Kong, and Macao)And Fields(Cancer Treatment Field)Exclusively developed, produced, and commercialized Yikaida and Brexu-Cel in China(Fosun Kite's R&D project FKC889)The right.

Kite will receive tiered royalties of 7% to 13% on drug sales. Additionally, for Fosun Kite's pipeline assets, Kite is entitled to royalties of 2% to 4% on sales.

In addition, apart from the $27 million equity transfer, Fosun Pharmaceutical will also inject an additional $10 million to strengthen Fosun Kite's layout in the biopharmaceutical field. It is reported that,IncludingIncluding Axicabtagene Ciloleucel Injection, four CAR-T therapies in totalIn the upcoming 2024 National Medical Insurance NegotiationDeliverSubmitted the application information.

Kite, Fosun Pharmaceutical, Gilead

2017 marked the first year of CAR-T therapy. In July of that year, Novartis' CAR-T therapy product, tisagenlecleucel, received unanimous recommendation from all 10 members of the ODAC expert advisory committee. One month later, on August 30, 2017, the product was officially approved by the FDA for marketing to treat patients under 25 years old with refractory/second-time/later relapsed B-cell precursor acute lymphoblastic leukemia, under the trade name Kymriah. This is reported to be the first CAR-T therapy approved by the FDA.

Kite is one of the leading companies in the CAR-T research and development field. At the end of 2016, Kite announced its CAR-T therapy, Axicabtagene Ciloleucel Injection.（axicabtagene ciloleucel，KTE-C19）The BLA application was accepted by the FDA, with a PDUFA date of November 29, 2017, and it is expected to become the first CAR-T therapy approved by the FDA for the treatment of non-Hodgkin lymphoma.

At the beginning of 2017, Fosun Pharmaceutical established a joint venture, Fosun Kite, with Kite through its wholly-owned subsidiary. Fosun Pharmaceutical contributed $20 million in cash, while Kite contributed product and exclusive proprietary technology rights valued at $20 million. Both parties held 50% equity in the joint venture. According to the agreement terms at that time, Fosun Pharmaceutical would pay an additional $40 million to the joint venture for patent and technology fees. The joint venture would also pay Kite $35 million in milestone payments based on R&D progress and market conditions, as well as sales royalties for the Axicabtagene Ciloleucel Injection. In other words, in this cooperation at that time, Fosun Pharmaceutical committed to a maximum amount of $95 million.

Gilead's acquisition of Kite also took place in 2017. On August 28, 2017, Gilead and Kite jointly announced that Gilead would acquire Kite for $118 per share in cash.(Total value approximately 11.9 billion USD)Acquisition of Kite. The acquisition was related to the difficulties Gilead faced at the time, with shrinking sales of its hepatitis C products, challenges in its HIV business, and insufficient pipeline product reserves. However, according to Gilead's H1 financial report at the time, it had ample cash on hand, approximately $36 billion. Therefore, the acquisition was actually the most direct method for Gilead to address its challenges at that time.

Successive Launches in China and Overseas

Gilead announced the acquisition of KiteTwo months later, on October 18, 2017, the FDA approved the listing of Axicabtagene Ciloleucel Injection, trade name Yescarta.

Currently, Gilead's cell therapy segment has two marketed CAR-T products, Yescarta and Tecartus, both of which originated from Kite. Tecartus was first approved by the FDA in 2020. According to Gilead’s financial report for the first half of 2024, the two CAR-T products generated a total revenue of $1.001 billion in the past six months, with Yescarta contributing the majority at approximately $794 million.

Yescarta is one of the few products in the global market among all commercially available CAR-T therapies to achieve annual revenue exceeding $1 billion.

Since Fosun Pharmaceutical introduced this product into China through a joint venture, it has been approved for marketing by the NMPA on June 22, 2021, under the trade name Yikaida. It is China's first approved CAR-T therapy for treating adult patients with relapsed or refractory large B-cell lymphoma who have received second-line or higher systemic therapy. On June 26, 2023, Axicabtagene Ciloleucel Injection was again approved by the NMPA for the treatment of adult large B-cell lymphoma at second-line recurrence.

It is reported that Yikaita has currently treated over 600 patients with relapsed/refractory large B-cell lymphoma.

According to the official news from Fosun Pharmaceutical, after gaining full ownership, they will further enhance the accessibility of the product. In addition, the clinical trial application for the third indication of Axicabtagene Ciloleucel Injection has been approved in China, targeting adult patients with relapsed/refractory indolent non-Hodgkin lymphoma. Currently, this indication is in the bridging clinical trial phase in China.

Summary

Recently, apart from Kite, several other companies have spun off their China operations, leaving the rights with local pharmaceutical manufacturers. These include:

On August 31, 2024, Beijing Tiantan Biological Products Co., Ltd. released the "Announcement on Chengdu Rongsheng's Acquisition of 100% Equity in Wuhan Zhongyuan Ruide Biological Products Co., Ltd.", announcing that its holding subsidiary, Chengdu Rongsheng Pharmaceutical Co., Ltd., plans to acquire CSL Behring for a total amount of 1.85 billion US dollars.(Asia-Pacific Region)Co., Ltd.（CSL BEHRING ASIA PACIFIC LIMITED）Wuhan Zhongyuan Ruide Biological Products Co., Ltd., a wholly-owned subsidiary, 100% equity.
August 26, 2024, UCB（UCB）Announced that it will sell its mature business in China for $680 million(Including 5 drugs and Zhuhai production base)Sold to CBC Group and Mubadala, an investment company from Abu Dhabi.

References:

1.Official Websites of Various Companies

2. Other Public Information

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