(Yicai) Jan. 12 -- Haisco Pharmaceutical Group has granted US' AirNexis Therapeutics the rights to a treatment targeting chronic obstructive pulmonary disease, a persistent inflammatory lung condition that makes it difficult to breathe, for up to USD1.1 billion, continuing the strong momentum for Chinese innovative drugs going global.

Delaware-based AirNexis will develop, produce, and commercialize HSK39004, a dual inhibitor that can improve airflow limitation and airway inflammation by dilating the bronchi and reducing the release of inflammatory factors, outside China, Haisco announced on Jan. 9.

HSK39004 comes in two forms: inhalation suspension and inhalation powder, both undergoing Phase II clinical trials in China, Shannan-based Haisco said, adding that it has invested about CNY70 million (USD10 million) in the research and development of the drug as of Dec. 31.

Under the deal, AirNexis will make an upfront payment of USD108 million -- USD40 million in cash and a 19.9 percent stake in the company worth USD68 million -- followed by potential milestone payments and royalties of up to USD955 million, Haisco pointed out.

Established by US biomedical investment firm Frazier Life Sciences, AirNexis has received investments from OrbiMed, Life Sciences at Goldman Sachs Alternatives, Longitude Capital, and other institutions, Haisco said, adding that its Chairman Wang Junmin has also invested USD5 million for a 1.4 percent stake in the US company.

The business model where investment institutions form a new firm to acquire the rights to drugs in the R&D pipelines is known as NewCo and has become an important way for innovative Chinese products to enter overseas markets. China saw nine out-licensing agreements under this model last year, according to statistics from pharma data service platform Pharmcube.

The number of out-licensing deals for innovative drugs in China jumped 67 percent to 157 last year from 2024, with their worth soaring 161 percent to USD135.7 billion, both figures reaching record highs, according to Pharmcube.

Founded in 2000, Haisco's products cover anesthesia and analgesia, endocrinology, cardiovascular diseases, oncology, and other areas. Its net profit shrank 23 percent to CNY295 million (USD42.3 million) in the first nine months of last year from a year earlier, while its operating revenue rose 20 percent to CNY3.3 billion (USD473.1 million).

Shares of Haisco [SHE: 002653] closed 0.2 percent lower at CNY56.09 (USD8.04) apiece today, after earlier tumbling by as much as 7.4 percent. The broader Shenzhen market rose 1.8 percent. 

Editors: Dou Shicong, Martin Kadiev