Beijing Tiantan Biological Products Corp. Ltd.

Gilead’s Kite Pharma is separating from its cell therapy joint venture with Fosun Pharma in China, handing Fosun the reins for its CAR-T therapy Yescarta in the region. Other foreign drugmakers have made recent China divestitures, including UCB and CSL Behring. Kite’s decision in particular reflects the challenges of securing reimbursement for more complex medicines in the country. Fosun is spending $27 million on Kite’s 50% share in the venture, known as Fosun Kite Biotechnology, according to a Sept. 13 securities filing in Chinese. Fosun will get the China rights to Yescarta and a related treatment called Tecartus. Kite will still be responsible for providing the viral vectors needed to continue making the two cell therapies. The Gilead subsidiary will also get tiered royalties on product sales ranging from 7% to 13%. The two drugmakers first inked their partnership in 2017, with Fosun paying Kite $40 million upfront and offering $35 million more in milestones for the China rights to Yescarta. The B cell lymphoma treatment was the first CAR-T to secure China approval in 2021. But since then, access and reimbursement for the CAR-T therapy have seen serious hurdles. Last year, Yescarta made sales of just 242 million Chinese yuan ($34 million), according to the filing. In the US, Yescarta made $186 million in the second quarter of this year. The treatment’s 1.2 million yuan ($170,000) price tag in China means it’s not affordable for many Chinese patients and likely ineligible for coverage under China’s state insurance program. In the US, Gilead initially set its list price at $373,000, but it has since increased to around $424,000. Fosun said it has tried to tap into various commercial coverage opportunities, including a scheme in Shanghai. Under that policy , insured patients can get a 100% claim payment for CAR-T therapy with a maximum coverage of 500,000 yuan. Several other companies besides Kite have also left China’s commercial activities to local drugmakers. Last month, CSL Behring sold a China subsidiary to Beijing Tiantan Biological Products for $185 million, according to a securities filing in Chinese. Just a few days before that, Belgium-based UCB sold a portfolio of its “mature products” to CBC Group and Abu Dhabi sovereign wealth fund Mubadala Investment Company for $680 million. Editor’s note: This article was updated to add further context.

Fosun Pharma plans to pay $27 million to buy Gilead Sciences' Kite Pharma out of its 50% stake in their Chinese joint venture. Gilead Sciences’ Kite Pharma will sell its stake in China’s Fosun Kite Biotechnology nearly eight years after forming the 50-50 cell-therapy-focused joint venture with Fosun Pharma.Fosun plans to pay $27 million to buy Kite out of its 50% share in Fosun Kite, the Chinese company said in a securities filing (PDF) to the Shanghai Stock Exchange on Sept. 13.The transaction will give Fosun full control in China over Yescarta, the star CD19-directed blood cancer therapy that was the first CAR-T therapy approved in China, plus its sister med Tecartus, which is undergoing bridging studies in the country.Kite’s exit from the Fosun JV comes as CAR-T meds continue to navigate patient access and reimbursement dynamics in China. In 2023, Fosun Kite recorded 242 million Chinese yuan ($34 million) in revenue, according to the filing. Relma-cel, a rival CD19 CAR-T drug, brought in 174 million yuan ($25 million) in sales last year.The list price for Yescarta in China is 1.2 million yuan (about $170,000). Although much cheaper than in the U.S., the cost is still astronomical for most Chinese families; China’s annual per capita disposable income last year was about one-thirtieth of that price. Since its approval in June 2021, Yescarta has treated more than 700 large B-cell lymphoma patients in China, according to Fosun Kite’s Website.CAR-T therapies’ high prices make them unlikely to qualify for national coverage under China's state-run insurance scheme.To help with access, Fosun Kite has over the years explored commercial insurance coverage, including a government-devised supplemental insurance program in Shanghai. Such policies have been able to cover up to 42% of the drug's cost, according to the company.And, in January, Fosun Kite worked with (Chinese) a subsidiary of state-run Sinopharm Group to roll out an outcomes-based payment program, offering half of a patient’s out-of-pocket cost back if Yescarta doesn’t induce a complete response by three months. To form the Chinese JV in early 2017, Fosun offered Kite $40 million in an upfront payment and committed $35 million in milestones for Yescarta’s rights in China, plus committed $20 million in initial funding for the new firm. The JV at the time had the option to license additional Kite candidates, including TCR therapies KITE-439 and KITE-718, both of which have since been discontinued at Kite.Now, Fosun said it will invest an additional $10 million in the cell therapy company.After the separation, Kite still grants Fosun rights to Yescarta and Tecartus in China and will supply the viral vectors used to manufacture the products. Kite will also get tiered royalties ranging from 7% to 13% of the drugs’ sales. For Fosun Kite’s pipeline assets, Kite is entitled to 2% to 4% of sales-based royalties if any ever reach the market. Kite’s decision to back out of the JV also follows a recent trend in which foreign pharmas are increasingly leaving management of their products—mostly established medicines—to local companies. Just last month, UCB said it will divest its mature neurology and allergy business in mainland China to local healthcare asset manager CBC Group and Abu Dhabi-based investment firm Mubadala. Days later, Sinopharm’s blood products subsidiary Beijing Tiantan Biological Products disclosed (PDF) that it’s buying a CSL Behring subsidiary in China for $185 million to obtain several albumin and human globulin products.

Chengdu Rongsheng Pharmaceutical Co., Ltd. entered into an agreement to acquire RUIDE OPERATIONS of CSL Limited from CSL Limited (ASX:CSL) for approximately $190 million on August 30, 2024. The transaction is subject to approval by relevant government authorities. The transaction is expected to close by the end of calendar year 2024.