AstraZeneca has not lost hope of entering the race for leadership in the obesity drug market. And it is willing to pay for it. The company has struck a deal with one of China’s largest pharmaceutical companies, CSPC, worth $18.5 billion for licenses to weight-loss drugs.
As a result of the deal, AstraZeneca will receive a license for experimental drugs to treat obesity and overweight-related diseases from the CSPC pharmaceutical group and will also collaborate with it on other projects, paying $1.2 billion upfront and up to $17.3 billion upon achieving certain milestones, the Chinese pharma company reported on January 30, 2025.
This is not AstraZeneca’s first investment in China. A day earlier, the Anglo-Swedish company had already announced that it would invest $15 billion in the Chinese pharmaceutical market by 2030 “to expand drug manufacturing as well as research and development.” AstraZeneca has been operating in China for over 30 years and is the largest foreign drug manufacturer there. China accounts for about 12% of its revenue. But the announced deal will be the largest in these years.
AstraZeneca already obtained a license for experimental weight-loss pills from the Chinese company EccoGene two years ago.
AstraZeneca’s CEO, Sharon Barr, stated that investments in China are key to the company achieving its goal of launching 20 new drugs by 2030.
According to analysts at Macquarie Capital, this is the largest licensing out-licensing deal in CSPC’s history. Under the agreement, CSPC is entitled to receive up to $3.5 billion in payments related to achieving research and development milestones and up to $13.8 billion for achieving certain sales results. The agreement covers eight drug development programs.
In its statement, CSPC said that any future royalties based on annual net sales of the licensed products will be paid in addition to these payments.
However, after the announcement, CSPC shares fell by about 12% in Hong Kong, although they had risen by 26% since January 2. AstraZeneca shares, traded on the London Stock Exchange, rose by 0.3% on January 30. “This reflects the classic ‘buy the rumor, sell the news’ phenomenon,” said Tony Ren, Head of Asia Healthcare Research at Macquarie Capital.
The newly licensed drugs from CSPC include injectable weight-control drugs, one of which is ready for clinical trials and intended for once-monthly administration, with three others in the preclinical research stage, the Chinese company said in a filing to the Hong Kong Stock Exchange.
The agreement covers the development, manufacturing, and commercialization of the investigational drugs. AstraZeneca received a global license, excluding Taiwan, Hong Kong, Macao, and mainland China.