Haisco Grants COPD Drug License to AirNexis Worth Up to $1.1B

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Haisco Pharmaceutical Group has licensed rights to a treatment for chronic obstructive pulmonary disease (COPD), a persistent lung inflammation that hampers breathing, to a U.S.-based company for up to $1.1 billion. This move underscores the increasing international reach of Chinese innovative pharmaceuticals.

The American company, based in Delaware, will be responsible for developing, manufacturing, and marketing HSK39004—a dual-action inhibitor that improves airflow and reduces airway inflammation by dilating bronchi and lowering inflammatory factor release outside of China. The drug is available in two formats, inhalation suspension and inhalation powder, both currently in Phase II clinical trials within China. As of December 31, the Chinese firm has invested approximately CNY 70 million (around $10 million) in its R&D.

According to the agreement, the U.S. firm will make an upfront payment of $108 million—comprising $40 million in cash and a 19.9% ownership stake valued at $68 million. Additional milestone payments and royalties could reach up to $955 million based on future development and sales achievements.

The U.S. company was established by a biomedical investment firm and has received funding from notable financial institutions such as OrbiMed, Goldman Sachs’ Life Sciences division, and Longitude Capital. The Chinese company’s chairman has personally invested $5 million for a 1.4% stake in the U.S. firm.

This partnership exemplifies the ‘NewCo’ model, where investment firms create new entities to acquire rights to promising drug candidates still in development. This strategy has become a key pathway for innovative Chinese drugs to access international markets. Last year alone, China executed nine licensing agreements under this model, reflecting its growing presence in global pharmaceutical licensing.

In 2022, the number of licensing deals for innovative Chinese drugs increased by 67% to 157, with total deal value soaring by 161% to $135.7 billion, both hitting record highs.

Founded in 2000, the Chinese pharmaceutical company offers products across various therapeutic areas, including anesthesia, endocrinology, cardiology, and oncology. Its net profit declined 23% in the first nine months of the previous year to CNY 295 million ($42.3 million), even as its operating revenue increased 20% to CNY 3.3 billion ($473.1 million).

Recently, the company’s shares closed slightly lower at CNY 56.09 ($8.04), after experiencing a sharp decline of up to 7.4% earlier in the day. Meanwhile, the broader Shenzhen market gained 1.8%.