Pfizer funnels $200M into CStone, licenses late-stage cancer med in China

CStone Pharmaceuticals has seen a $200 million investment from U.S. Big Pharma Pfizer and nabbed a China license for its PD-L1 asset sugemalimab.

It’s been a cash-heavy few years for the Chinese startup: CStone set up shop back in 2016 with a $150 million series A round to advance a pipeline that would “meet the most pressing needs of Chinese patients.”

At the time, the company named five areas of interest: oncology, cardiovascular diseases, rheumatoid arthritis, hematology and autoimmune diseases, with a special focus on immuno-oncology. Since its launch, CStone has worked on a pipeline of more than a dozen candidates, including treatments targeting PD-L1, IDH1 and CTLA-4.

Two years later, the Suzhou, China-based biotech raised another $260 million in its B round, which helped advance its clinical-stage assets, including lead program CS1001, aka sugemalimab, an anti-PD-L1 antibody. The proceeds were also tapped for expanding CStone’s pipeline both organically through in-house R&D as well as via partnerships.

Then, in February last year, the biotech picked up another HK$2.1 billion ($266 million) when it went public on the Hong Kong Stock Exchange, which relaxed its rules for early-stage, pre-revenue biotechs a year earlier.

Now, Pfizer wants in, paying $200 million for sugemalimab, now in the latter stages of testing, with $280 million also on the table for the drug in biobucks. Under the deal, it gains a near 10% stake in the company.

This deal also creates “a framework” between CStone and Pfizer to “bring additional oncology assets to the Greater China market.” The pair will select late-stage (i.e., post proof-of-concept) oncology assets for co-development in the greater China market. “These assets may come either from Pfizer’s pipeline or through joint in-licensing,” the duo said in a statement.

This allows Pfizer deeper access into China, a potentially lucractive market but one with many pitfalls for Western companies. Piggy-backing in off a local company appears to be a favored path for many U.S. companies, and the CStone deal allows Pfizer both an R&D and sales partner, with future pipeline deals added to the mix making the pact potentially a long-term thing.

The PD-L1 is being tested for high-incidence cancer indications in China, including lung, gastric and esophageal cancers, among others, across early, middle and late stages of testing. Pfizer will in-license and exclusively lead commercialization of sugemalimab in China.

This builds on Pfizer's own checkpoint inhibitor Bavencio, developed by partner Merck KGaA, although this came late to the U.S. market, and has also suffered from several cancer study flops in recent years.

“Pfizer’s investment in CStone is a statement of its confidence in the potential of our anti-PD-L1 treatment and recognition of our research and development capabilities,” said Frank Jiang, M.D., Ph.D., chairman and chief of CStone. “By joining forces with Pfizer and leveraging its commercialization infrastructure, we will ensure that patients across a vastly expanded number of markets in China have quicker access to our highly differentiated PD-L1 treatment.”

“Our company has an extensive and proud history of bringing innovative medicines to patients in China,” added Pierre Gaudreault, acting president of Pfizer Biopharmaceuticals Group China. “This collaboration with CStone builds on that history by helping to develop a potential best-in-class PD-L1 treatment that we can commercialize upon approval. It also fosters our collaboration with a partner that has exceptional clinical development capabilities that can help us meet the clear need for novel oncology treatments in China.”