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Shares of Frontier Biotechnologies declined today, wiping out yesterday’s significant gains, after the Chinese pharmaceutical company announced it had granted global exclusive rights to a major British drugmaker for two of its small interfering RNA (siRNA) drug candidates in a deal valued at over USD 1 billion.
The company’s stock closed lower by 4 percent, ending the day at CNY 23.69 (USD 3.45), after dropping as much as 16.7 percent earlier. The previous day, the stock surged 20 percent—the maximum allowed by the exchange—and finished up 9.3 percent.
The biotech firm revealed it had granted the UK-based pharmaceutical giant exclusive rights to develop, manufacture, and commercialize two of its siRNA-based treatments. These treatments are designed to silence specific genes linked to certain diseases, leveraging gene-silencing technology, as announced on February 23.
Frontier Biotech will receive an upfront payment of USD 40 million, along with a milestone payment of USD 13 million in the near term, and potential payments totaling up to USD 950 million as the drugs reach various development milestones.
One of these drug candidates has already entered clinical trial application, while the other remains in pre-clinical development. The company will continue overseeing the initial phases of development for both treatments; however, the UK company’s team will take over global clinical trials, regulatory submissions, and commercialization efforts moving forward.
Founded in 2013, Frontier Biotech currently has only one product on the market—Aikening, also known as Albuvirtide for injection. This long-acting HIV medication was approved in China in 2018. The company has approximately ten other products in research stages, targeting areas such as cancer, cardiovascular conditions, hepatitis, and more.
Since its initial public offering on the Shanghai Stock Exchange in 2020, the company has yet to turn a profit. It is projecting a net loss between CNY 255 million (USD 37.1 million) and CNY 290 million for the past year, a significantly larger deficit compared to last year’s CNY 201 million, according to its earnings forecast released in January. Meanwhile, revenue is expected to grow between 8 and 12 percent, reaching between CNY 140 million and CNY 145 million.
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