Fosun Pharma has outlicensed a second inflammatory disease candidate to a Western biotech startup right on the heels of a similar deal unveiled earlier this month.
For up to $670 million, Fosun is granting Britain’s Sitala Bio ex-China rights to its drug coded FXS6837, the Shanghai company said in an Aug. 26 securities filing (PDF, Chinese).
Little is shared about the candidate other than that it’s a small molecule currently in phase 2 development in China for an immune-modulated disease. Existing drugs targeting the indication generated $3.8 billion in global revenue last year, Fosun said, citing IQVIA data.
Founded in England in 2021, Sitala counts Forbion and OrbiMed among its investors. Matt Cooper, a Forbion venture partner and a co-founder of Sitala, serves as the biotech's CEO. The company is focused on blocking harmful inflammation to treat neurodegenerative and inflammatory diseases, according to its website.
The Fosun deal features a $25 million upfront payment, plus up to $165 million in development and commercialization milestones and up to $480 million in sales milestones. In addition, Fosun gains $5 million worth of Sitala shares, representing fewer than 10% of the biotech’s total outstanding shares on a fully diluted basis.
This is the second inflammatory-disease-focused transaction for Fosun this month. About two weeks ago, the Chinese company announced a deal with Expedition Therapeutics worth up to $645 million centered on its DPP-1 inhibitor XH-S004. The oral drug is in clinical development in China for non-cystic fibrosis bronchiectasis and chronic obstructive pulmonary disease.
The Expedition pact was unveiled shortly before the FDA’s approval of Insmed’s Brinsupri (brensocatib), the first DPP-1 inhibitor to reach the market.
Fosun has put an increased emphasis on innovative drugs lately as older medicines drag on the company’s business performance. Aug. 26, Fosun also revealed its half-year results, reporting a 4.7% revenue drop to 19.4 billion Chinese yuan ($2.7 billion) during the period thanks to headwinds from local governments’ volume-based procurement initiatives targeting off-patent drugs.