Fosun, Treehill launch joint investment business to fund drugs angling for US market

A new collaboration between Fosun Pharma’s U.S. branch and consulting firm Treehill Partners will provide additional resources to help businesses survive the biotech winter.

The two companies have formed a “jointly operating vehicle” to invest in mid- to late-stage clinical programs that aim to enter the U.S. market. The newly established business will initially focus on innovative cancer drugs, with a potential to look into other therapeutic areas in the future.

“We do see over the last couple of years a significant downturn on the biotech side—a lot of companies with very interesting technology, want to work, get stranded, either because of the funding issue or because of just a lack of capability,” Fosun Pharma USA CEO Rong Yang said in an interview with Fierce Biotech. “We feel, together with Treehill, that could be an area we should explore.”

As to whether this “vehicle” is structured as a joint venture or a fund, Yang said the partners deliberately chose to keep the concept “pretty loose at the high level” at the moment.

Rong Yang,
Fosun Pharma USA CEO
(Fosun Pharma)

Like a pharma company’s venture arm, the new business will offer funding for drug programs, with the first tranche expected in 2024, although Yang declined to comment on the size of investments it may offer. And the two firms will utilize their capabilities, including corporate and clinical development expertise, to “add value” to selective assets that target unmet medical needs, Yang added.

The formation of the partnership comes as Fosun Pharma USA is preparing to bring its first innovative product to the country.

Established in 2017, the Fosun subsidiary currently has a portfolio of generic drugs. Through a licensing deal signed in January 2023, the New Jersey-based unit will be responsible for U.S. commercialization of the PD-1 inhibitor serplulimab, which is developed by another Fosun firm, Shanghai Henlius Biotech. Serplulimab is approved in China and is being tested against Roche’s Tecentriq in a U.S. phase 3 trial for extensive-stage small cell lung cancer. Yang said the drug could reach the U.S. market in 2025 if everything goes to plan.


Henlius CEO scouts for US PD-1 partner amid Fosun unit's pivot to innovative drugs from biosimilars

A PD-1 drug is considered a “fundamental platform” for potential combinations in various cancer types, Yang said. “We’re asking ourselves, ‘How do we build a more sustainable portfolio?’”

That doesn’t mean the candidate identified under the Treehill partnership has to be a potential partner with serplulimab, Yang said, and Fosun won’t necessarily internalize the asset, either. The arrangement also doesn’t preclude each company from pursuing their own opportunities.

“I want you to see that announcement in the context of, first and foremost, a U.S. journey by itself, rather than we’re binding everything with a partner,” Yang said. He added that Fosun sees the partnership as “one important piece of the journey puzzle.”

Although there’s a “high degree of focus” on non-U.S. clinical-stage drugs, the partners won’t exclude assets originating from the U.S., Yang said. It comes down to unmet need, the science and how the partners can add more value.

Many drug developers do need money to advance their clinical programs during a slowdown of overall investment in biotech. For oncology drug makers, the situation seems even worse thanks to an increased interest in metabolic diseases such as obesity. But good candidates with promising proof-of-concept data—which Fosun and Treehill are targeting—remain hot items. That means the two will need to compete with Big Pharmas and their venture arms. Even though Fosun Pharma is one of the largest pharma players in China, it’s a rather small operation in the U.S.

Yang acknowledged that many small companies want to partner with major pharma companies.

“But when you look at the reality, there are so many exciting technologies out there worldwide. Not everything will be picked up by Big Pharma,” Yang said.

Large pharma companies have their own strategic priorities, and some may not be cash-rich themselves, the Fosun exec said. Besides, large companies may not be nimble in decision-making when it comes to striking deals.

“In a way, I feel there is a need we should be able to explore,” the Fosun exec said.

In a statement, Treehill co-founder and CEO Ali Pashazadeh said the advisory firm picked Fosun as a “preeminent global partner” because of its shared “work ethos and vision for novel pathways of biopharma product development.”