Pfizer has agreed to acquire a 9.9% stake in the Hong Kong-listed biopharmaceutical firm CStone Pharmaceuticals for $200m.

The transaction is part of a strategic collaboration between CStone and Pfizer’s subsidiaries Pfizer Investment Pfizer Corporation Hong Kong.

Under the terms of the deal, Pfizer agreed to buy 115,928,803 of CStone’s shares, priced at $1.725 per share. The transaction has secured the required internal approvals of both companies.

Pfizer will also obtain exclusive rights to develop and commercialise CStone’s cancer drug sugemalimab in mainland China.

CStone retains the rights to develop and commercialise the drug outside mainland China, and carry out clinical development and seek regulatory approvals for five selected indications.

The company is entitled to receive additional milestone payments of up to $280m, along with tiered royalties on the sales of sugemalimab.

Pfizer Biopharmaceuticals China acting president Pierre Gaudreault said: “Our company has an extensive and proud history of bringing innovative medicines to patients in 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.”

Pfizer and CStone will co-develop and market oncology assets in Greater China

The Chinese biopharmaceutical firm said that the deal with Pfizer is expected to offer financing support for its sugemalimab development programme.

Sugemalimab is an investigational anti-PD-L1 human monoclonal antibody, intended to treat high-incidence cancer indications in China, including lung, gastric and esophageal cancers, others.

Both the companies are expected to jointly develop and commercialise select late-stage oncology assets in the Greater China market, which may either belongs to Pfizer’s portfolio or acquired through joint in-licensing.

For the transaction, Goldman Sachs & Co. is serving as financial advisor and Cooley as legal advisor to CStone, while Clifford Chance is serving as legal advisor to Pfizer.

CStone chairman and CEO Frank Jiang said: “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.

“In addition, we have advanced our transformation into a full-fledged biopharmaceutical company by forging a collaboration that will enable us to accelerate development and commercialization of globally innovative therapies for Chinese patients.”