American drug giant Pfizer (PFE) has entered into a $6 billion exclusive licensing deal with China’s 3SBio Inc. (HK:1530) for its experimental cancer drug, SSGJ-707. According to the terms of the deal, Pfizer will pay an upfront fee of $1.25 billion and another $4.8 billion on meeting certain development milestones. Plus, Pfizer will receive double-digit royalties on sales of SSGJ-707. The transaction is expected to close in the third quarter of 2025, pending customary closing conditions and 3SBio shareholder approval.
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That’s not all, Pfizer is also planning to take a minority stake in 3SBio by making a $100 million equity investment in the company after the current transaction closes. Shares of the Chinese biopharmaceutical company jumped nearly 36% on the Hong Kong Stock Exchange following the news this morning.
Here’s Why Pfizer is Betting on 3SBio
3SBio’s lead drug candidate, SSGJ-707, is being tested for treatment of non-small cell lung cancer, metastatic colorectal cancer, and gynaecological tumors. The drug has shown initial efficacy and safety data in these trials to date and is set to begin the first Phase III clinical trial in China later this year. The company also announced that it has received approval from the U.S. Food and Drug Administration (FDA) for its Investigational New Drug (IND) application for SSGJ-707. The drug is being developed as a monotherapy for the first-line treatment of Programmed Death Ligand 1 (PD-L1)-positive advanced non-small cell lung cancer.
Pfizer’s licensing deal with 3SBio includes the drug’s development, manufacturing, and commercialization aspects. Pfizer has also obtained a global license (excluding China) and the possibility of obtaining commercialization rights in the mainland. The drug substance for SSGJ-707 will be manufactured at Pfizer’s Sanford, North Carolina facility, and the drug product will be manufactured at McPherson, Kansas.
Is Pfizer a Good Stock to Buy?
Analysts remain divided on Pfizer’s long-term stock trajectory. On TipRanks, PFE stock has a Moderate Buy consensus rating based on five Buys and 13 Hold ratings. Also, the average Pfizer price target of $27.94 implies 21.5% upside potential from current levels. Year-to-date, PFE stock has lost 10.2%.
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