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MarketScreener Homepage  >  Equities  >  Hong Kong Stock Exchange  >  CStone Pharmaceuticals    2616   KYG2588M1006

CSTONE PHARMACEUTICALS

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Novartis, once wary of Chinese M&A, dives into BeiGene's cancer immunotherapy

01/12/2021 | 11:03am EST
People enter a building of biotechnology firm BeiGene Ltd at the Suzhou Industrial Park in Suzhou

(Reuters) - Swiss drugmaker Novartis paid $650 million to snag an immuno-oncology drug from BeiGene Ltd, the latest Western drugmaker turning to China for must-have assets to fill holes in their cancer portfolios.

Novartis Chief Executive Vas Narasimhan's move, which could bring $1.55 billion in milestone payments and royalties for BeiGene, is also an about-face from comments two years ago when he raised data quality and innovation worries as barriers to Big Pharma's Chinese M&A dreams.

Novartis will co-develop BeiGene's tislelizumab, an anti-PD-1 antibody similar to Keytruda from Merck and Opdivo from Bristol-Myers Squibb which help the immune system attack cancer and which have reaped billions of dollars in sales.

Pfizer's $200 million investment in China's CStone Pharmaceuticals in September, also targeting an immuno-oncology asset, is another such a deal.

Like Pfizer, Novartis has been tardy in developing cancer immunotherapy assets, with home-grown spartalizumab failing in a trial against skin cancer last year. That boosted urgency to scoop up BeiGene's asset that Novartis hopes to pair with other medicines.

Susanne Schaffert, Novartis's cancer area head, pledged to use tislelizumab "to develop transformative combination therapies for patients", she said.

BeiGene's drug has long been coveted by Western drugmakers: Celgene bought tislelizumab rights in 2017 for $263 million, but returned them when the U.S. company was bought by Bristol-Myers Squibb for $74 billion in 2019.

"DATA QUALITY"

In May 2019, Novartis's Narasimhan struck a dour tone about Chinese M&A targets, telling investors "you don't see real fundamental new target discovery leading to novel drugs" and that "data quality needs to go up".

With gaps to fill, however, Narasimhan is now adding BeiGen's tislelizumab, also because the drug may have properties that could overcome problems that compromise other immuno-oncology drugs' anti-tumour activity.

Novartis will promote tislelizumab in North America, the European Union and Japan.

Tislelizumab is approved in China for lymphoma and bladder cancer.

(Reporting by Derek Francis in Bengaluru, John Miller in Zurich and Roxanne Liu in Beijing; editing by Richard Pullin and Michael Shields)

By John Miller


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
BEIGENE, LTD. 1.83% 223 End-of-day quote.42.04%
CSTONE PHARMACEUTICALS 2.45% 10.86 End-of-day quote.7.74%
NOVARTIS AG 0.37% 85.93 Delayed Quote.2.73%
PFIZER INC. 0.19% 36.55 Delayed Quote.-0.71%
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Financials
Sales 2020 14,2 M 2,19 M 2,19 M
Net income 2020 -1 257 M -194 M -194 M
Net cash 2020 2 114 M 326 M 326 M
P/E ratio 2020 -10,4x
Yield 2020 -
Capitalization 10 445 M 1 612 M 1 612 M
EV / Sales 2020 588x
EV / Sales 2021 29,6x
Nbr of Employees 325
Free-Float 73,9%
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Mean consensus OUTPERFORM
Number of Analysts 5
Average target price 14,40 CNY
Last Close Price 9,08 CNY
Spread / Highest target 107%
Spread / Average Target 58,6%
Spread / Lowest Target 4,82%
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Managers and Directors
NameTitle
Ning Jun Jiang Chairman & Chief Executive Officer
Richard Yeh Chief Financial Officer
Jian Xin Yang Chief Medical Officer & Senior Vice President
Xin Zhong Wang Chief Scientific Officer & Senior Vice President
Wei Li Non-Executive Director
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