Hengrui Pharma Secures €15M Upfront from Merck for Oral GnRH Antagonist SHR7280

On April 7, Hengrui Pharma and Merck Group (Merck) jointly announced a collaboration.Hengrui Pharma Grants Merck the Exclusive Commercialization Rights in China (excluding Hong Kong, Macao, and Taiwan) for SHR7280, a Self-developed Class 1 New Drug and Oral Small Molecule Gonadotropin-releasing Hormone (GnRH) Receptor Antagonist (with indications covering medically assisted reproduction and gynecology).

According to the terms of the agreement, Hengrui Pharma will receive an upfront payment of 15 million euros (approximately 120 million RMB). On this basis, Hengrui Pharma is entitled to receive milestone payments for the licensed product and a double-digit percentage royalty on annual net sales in the licensed region. The agreement also includes the right of first negotiation for expanding global cooperation for this product.

SHR7280 is the world's first orally administered GnRH antagonist developed for assisted reproductive research by Hengrui Pharma. This drug features convenient administration and high patient compliance, and is expected to become the world’s first approved oral GnRH receptor antagonist in the field of assisted reproduction.

In the second half of 2023, a multi-center, positive drug-controlled double-blind study (SHR7280-302 study) was initiated to evaluate the efficacy, safety, and tolerability of orally administered SHR7280 tablets in female subjects undergoing assisted reproductive technology (ART) treatment during the controlled ovarian hyperstimulation (COH) process. The main part of this clinical trial is expected to be completed by the end of 2024, with continued follow-up on the neonatal study endpoints.

In fact, this is Hengrui Pharma's second collaboration with Merck Group in the innovative drug field.

The first innovative drug collaboration between the two parties was reached in October 2023, when Hengrui Pharma and Merck Group entered into an exclusive licensing agreement for Hengrui's self-developed PARP1 inhibitor, HRS-1167. The agreement also includes the exclusive option for Hengrui's self-developed Claudin-18.2 antibody-drug conjugate (ADC) SHR-A1904. According to the terms of the agreement, Hengrui will receive an upfront payment of 160 million euros, a technology transfer fee and option exercise fee of 90 million euros, as well as research and development milestone payments and sales milestone payments. The total potential payments could reach up to 1.4 billion euros. In addition, Merck will also pay Hengrui sales royalties of up to double-digit percentages.

In recent years, with the return of founder Piaoyang Sun and the addition of Dr. Ningjun Jiang, former CEO of CStone Pharmaceuticals, Hengrui Pharma has been increasing its R&D investment in innovative drugs and has achieved multiple overseas licensing deals for its innovative drugs. According to incomplete statistics from VCBeat, since 2023, Hengrui has completed nine out-licensing deals with a potential total transaction value exceeding 10 billion US dollars, while also acquiring equity stakes in several partner companies.

According to incomplete statistics from VCBeat, Hengrui Pharma's outbound licensing cooperation since 2023

Hengrui's Achievements Through Outward Licensing Reflected in Annual ReportAccording to Hengrui Pharma's 2024 annual report, during the reporting period, Hengrui achieved a revenue of 27.985 billion yuan, representing a year-on-year increase of 22.63%. Of this, innovative drug sales revenue reached 13.892 billion yuan (tax-inclusive, excluding outward licensing income), marking a year-on-year growth of 30.60%, accounting for more than half of total sales revenue (excluding outward licensing income). Licensing income exceeded 2.7 billion yuan, accounting for nearly 10% of operating revenue, becoming the second growth driver. Hengrui Pharma, which started as a generic drug company, has successfully transformed into the "leading innovator in innovative drugs."

The other party to this cooperation, Merck KGaA, is a multinational chemical, pharmaceutical, and life sciences group founded in 1668, with its headquarters in Darmstadt, Germany. Merck has over 90 years of development history in China and currently employs nearly 4,500 people. It has 21 registered companies in Beijing, Shanghai, Wuxi, Suzhou, Nantong, Hong Kong, and other locations. According to Merck's 2024 annual report, the group achieved annual revenue of 21.2 billion euros, with a net profit of 2.79 billion euros.

Perhaps Merck inherently possesses the cautious and conservative traits typical of German enterprises. Regarding its 2024 business revenue, Belén Garijo, CEO of Merck Group, has publicly stated,The recovery of sales growth in its existing business means that Merck can take a cautious approach to acquiring other expensive companies.Belen Garijo also revealed that Merck currently has no plans for any transformative deals in the pharmaceutical sector but is considering smaller deals with late-stage pipelines.

With this "cautious" approach, compared to other MNCs, Merck has not engaged in frequent BD and acquisitions in the past year, revealing only one clear acquisition deal: In December 2024, HUB Organoids, the pioneer in organoid technology, announced on its official website that Merck had signed a definitive agreement to acquire HUB Organoids. The terms of the transaction were not disclosed.

Another Merck acquisition was disclosed by Reuters: In February 2025, Merck entered into deep negotiations with SpringWorks, intending to acquire the company. It is reported that SpringWorks has a market value of approximately $3 billion. After the news broke, SpringWorks declined to comment, citing "no response to market speculation," and the Merck Group also did not immediately respond to media inquiries, only stating that it would continue to evaluate various business development options.

Although Merck has been cautious about spending on acquisition projects, it has made several trips to the Chinese market for "shopping sprees." Among the three BD deals completed in 2023, two were from China, with Hengrui Pharma and Abbisko Therapeutics as its partner companies.

Among them, the collaboration with Hengrui Pharma occurred in October 2023, as mentioned earlier. The partnership with Abbisko Therapeutics took place in December 2023, where both parties entered into an exclusive licensing agreement for the small molecule CSF-1R inhibitor, Pimicotinib. According to the agreement terms, Merck Group initially obtained the exclusive rights to commercialize Pimicotinib in mainland China, Hong Kong, Macao, and Taiwan for all indications, along with the exclusive option for global commercialization rights. Additionally, under certain conditions, Merck can also opt to co-develop other indications for Pimicotinib.

According to the terms of the agreement, Abbisko Therapeutics can receive up to $605.5 million, including upfront payments, development and commercialization milestone payments, as well as double-digit percentage royalties based on actual annual net sales. In February 2024, Abbisko Therapeutics received a one-time, non-refundable upfront payment of $70 million. Recently, this collaboration has made new progress: On April 1, Abbisko Therapeutics announced that Merck had exercised the global commercialization option for Pimitespib (ABSK021) under the licensing agreement signed by both parties in December 2023, with an exercise fee of $85 million.

Regarding Merck's "buying spree" in China, Merck Group stated in its 2023 earnings report that China is a strategic market for Merck, and the company is willing to continue investing and developing in China. As Willy Merck (Willy Merck), the first member of the Merck family to visit China, wrote in his 1888 travel diary during his world tour: "I am convinced that China can become stronger than any other country if it so desires" (Source: *Willy Merck's Memoirs of Travelling Around the World*, collected and published by Mathilde Merck, Darmstadt, 1934). We look forward to more collaborations between Merck and Chinese pharmaceutical companies, achieving mutual benefits, accelerating innovation, and bringing new medicines to patients worldwide.