Celgene collaborates with a Chinese partner in a landmark deal. It agreed to buy a 5.9% interest in Chinese biotechnology firm, BeiGene for US$150 million.
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BeiGene will receive a US$263 million payment in the form of upfront license fees as the two companies collaborate on developing experimental cancer therapies. BeiGene will also acquire Celgene’s commercial operations in China and an exclusive license to Celgene’s cancel portfolio including its blockbuster drug, Revlimid.
BeiGene will be entitled to receive as much as US$980 million in milestone payments on potential future sales of the experimental therapy, called BGB-A317, which is significant given BeiGene currently has a market value of US$2.5 billion. BeiGene’s shares were up 27% on the announcement and are up 62% since the beginning of July.
BeiGene is developing new treatments for cancer as demand for cancer treatments continues to rise in China, with the incidence of the disease growing in a country known for its high smoking rates and air pollution. For Celgene, the transaction expands its oncology pipeline and gives it a partner to make deeper inroads into the Chinese market over the long term.
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