Fosun Pharma Deepens Cell Therapy Commitment Through Enhanced Collaboration with Kite Pharma and Full Acquisition of Fosun Kite

On September 13, 2024, Fosun Pharmaceutical (600196.SH, 02196) announced that its holding subsidiary, Fosun Pharmaceutical Industry, plans to acquire a 50% stake in Fosun Kite from Kite Pharma for US$27 million in cash. After the completion of this transfer, Fosun Pharmaceutical will hold 100% of Fosun Kite's shares and intends to increase Fosun Kite’s capital by contributing US$10 million or an equivalent amount in RMB as the sole shareholder.

On the same day as the signing of the "Equity Transfer Agreement," Fosun Kite and Kite Pharma comprehensively amended and restated the original license agreement, reaching the "Amended and Restated License Agreement." According to this agreement, Fosun Kite obtained exclusive rights from Kite Pharma to develop, manufacture, and commercialize Yikaida® and Brexu-Cel (Fosun Kite's R&D project FKC889) within the territory (mainland China, Hong Kong, and Macao) and the field (cancer treatment).

The announcement shows that Fosun Kite should pay an accumulated milestone of 10 million US dollars to Kite Pharma for this license. According to the achievement of the licensed product's annual net sales, Fosun Kite should pay up to 25 million US dollars in sales milestones to Kite Pharma as per the agreement. Fosun Kite should pay royalties to Kite Pharma at varying rates of 7%-13% on the annual net sales of all licensed products within the licensed territory.

In addition, Fosun Pharmaceutical's wholly-owned subsidiary, Fosun Kite, is proposed to be renamed as Fosun Kite Biotechnology Co., Ltd., and will serve as Fosun Pharmaceutical's core platform for cell therapy technology. It will continue to focus on the field of tumor immunotherapy, promote CAR-T cell therapy products to benefit more patients, and meet unmet clinical needs. In the future, Fosun Pharmaceutical and Kite Pharma will maintain a long-term strategic partnership through a licensing cooperation model.

Wu Yifang, Chairman of Fosun Pharmaceutical, stated: "Since establishing a strategic partnership with Kite Pharma in 2017, both parties have worked closely together to advance the rapid development of CAR-T technology and the cellular therapy product Yikaida® in China. Fosun Pharmaceutical remains firmly optimistic about the future of cellular therapy and continues to promote the construction of world-leading technology platforms. Moving forward, we will further expand the application of cell therapies in areas such as oncology and autoimmune diseases, focusing on unmet clinical needs, fulfilling our commitment to patients, and allowing the fruits of scientific innovation to benefit more patients."