(Yicai) July 3 -- Shares of CSPC Pharmaceutical Group rose after the Chinese drugmaker said it had penned a kidney disease drug discovery deal with European peer AstraZeneca that could be worth as much as USD1.8 billion, the latest sign of growing global interest in Chinese biotech innovation.

CSPC [HKG: 1093] closed 5.8 percent higher at HKD7.99 (USD1.02) per share in Hong Kong today, after earlier gaining by as much as 7 percent. The stock jumped 8.3 percent yesterday.

Under the collaboration, the pair will jointly identify two therapeutic targets and develop novel small nucleic acid drug candidates with the potential to treat multiple kidney disease indications, Shijiazhuang-based CSPC said in a statement released yesterday.

The preclinical research program will use CSPC's proprietary small interfering ribonucleic acid (siRNA) drug discovery platform and extrahepatic targeted delivery platform. The former identifies highly potent nucleic acid therapeutics tailored to defined targets, while the other delivers them to diseased tissues outside the liver.

The siRNA drug discovery platform integrates a proprietary artificial intelligence-powered molecular design engine with a fully automated high-throughput screening system, enabling the rapid identification and optimization of promising candidates, CSPC said.

The extrahepatic targeted delivery platform is engineered to transport therapeutic agents to major organs beyond the liver, providing a technological foundation for the development of next-generation treatments for diseases affecting the kidneys and other extrahepatic tissues, the company said.

For each preclinical candidate, AstraZeneca will have the option to secure the exclusive rights to develop, produce, and commercialize it globally or in territories outside China. CSPC will retain the development, manufacturing, and commercialization rights in China for one of the candidates.

The deal includes a USD30 million upfront payment to CSPC, along with up to USD540 million in development milestones and as much as USD1.2 billion in sales milestones. CSPC will also be eligible to receive tiered royalties at a single-digit percentage of annual net sales should any products reach the market.

The tie-up is expected to speed the global development and commercialization of CSPC’s unit CSPC Innovation Pharmaceutical's drug pipeline while shortening the payback period on investments in early-stage research and development to provide stable financial support for future R&D projects, CSPC Innovation said in a separate statement on the same day.

CSCP Innovation [SHE: 300765] finished up 6.4 percent at CNY36.71 (USD5.41) in Shenzhen today, after adding over 12 percent yesterday.

Besides developing and producing biological drugs and functionally active pharmaceutical ingredients, CSPC Innovation is also the largest caffeine supplier to global beverage giants Coca-Cola, PepsiCo, and Red Bull. It has filed for a secondary listing in Hong Kong, according to a document released by the city’s stock exchange on June 17.

Editor: Futura Costaglione