The Zhitong Finance App learned that Citi released a research report stating that Chia Tai Tianqing, a subsidiary of China Biopharmaceuticals (01177), reached a strategic cooperation on biosimilar drugs, granted STADA an exclusive license to commercialize pabolizumab biosimilar drugs (TQB3570, anti-PD-1 monoclonal antibodies) in the European Union, Switzerland, the United Kingdom and the Commonwealth of Independent States, and can choose to expand into the US and Gulf Cooperation Council (GCC) markets. The bank believed that the cooperation was a surprise, and maintained the “buy” rating of Zhongsheng Pharmaceuticals, with a target price of HK$10.8.
According to the agreement, Chia Tai Tianqing will receive a down payment and development, supervision and sales milestone payments of up to 53 million euros, and enjoy a double-digit profit share; Chia Tai Tianqing is still responsible for the development, production and commercial supply, and the cooperation also includes the right to select up to three additional biosimilar molecules in the field of oncology and immunology.
The bank pointed out that this cooperation confirms that Zhongsheng Pharmaceuticals' biosimilar production platform is of commercial quality. In the future, it will be possible to share the profits of authorized drugs through production and supply, and benefit from the expansion of the global biosimilar market driven by the expiration of 118 US biopharmaceutical patents and total sales of more than 230 billion US dollars from 2025 to 2034. Zhongsheng Pharmaceutical revealed that the total down payment and recent milestone payments for authorized foreign transactions during the year reached US$355 million, and the total potential transaction amount reached US$3.4 billion.