(Yicai) Aug. 27 -- Fosun Pharmaceutical Group has granted the overseas rights to an innovative drug the Chinese drugmaker is developing to UK biotechnology company Sitala Bio for a total of up to USD675 million.

Sitala will pay Fosun Pharma a USD25 million upfront payment and, based on the progress of clinical trials, milestone payments of up to USD165 million for the development and commercialization of FXS6837 and other drugs with the same active ingredients outside China, the Shanghai-based firm announced later yesterday.

Once the drug is approved, Sitala will pay additional USD480 million in sales milestone payments, based on the annual net sales of the product in overseas markets, as well as double-digit percentage royalties on the net sales, Fosun Pharma noted.

FXS6837 is a small-molecule inhibitor independently developed by Fosun Pharma for the treatment of immune regulatory disorders. It is in Phase II clinical trials in China. As of July 31, the company's cumulative research and development investment in FXS6837 totaled CNY120 million (USD16.8 million).

The deal also requires Sitala to transfer an up to 10 percent stake worth USD5 million to a subsidiary of Fosun Pharma.

The collaboration with Sitala is expected to further accelerate the clinical development and commercialization process of FXS6837 globally and continuously expand Fosun Pharma's portfolio of innovative products in overseas markets, the firm added.

Founded in 2021, Sitala develops innovative drugs in the field of inflammatory and autoimmune diseases. Its investors include several well-known investment institutions from Europe and the United States.

Fosun Pharma reported revenue of CNY19.5 billion (USD2.7 billion) in the first half of the year, down 4.6 percent from a year earlier, according to its semiannual earnings report also released last night. Revenue from the innovative drug business surged 14 percent to CNY4.3 billion (USD600 million), accounting for nearly 29 percent of the total pharmaceutical business revenue. Net profit widened 39 percent to CNY1.7 billion in the period.

Shares of Fosun Pharma [SHA: 600196] closed unchanged at CNY28.56 (USD3.99) in Shanghai today, after earlier gaining as much as 4 percent.

Editor: Futura Costaglione