(Yicai) Aug. 12 -- Shares of Fosun Pharmaceutical Group jumped after the Chinese drugmaker said a subsidiary has agreed to sell the rights outside of the Chinese mainland, excluding Hong Kong and Macao, to an innovative treatment being developed for chronic lung diseases for up to USD645 million.

After surging by as much as 5.6 percent in Shanghai trading earlier today, Fosun Pharma [SHA: 600196] ended 3.4 percent higher at CNY27.70 (USD3.85) a share.

Fosun Pharmaceutical Industry Development inked a deal for the global market development, production, and commercialization rights outside of China for XH-S004 with US biotech firm Expedition, its Shanghai-based parent company announced late yesterday.

Under the deal, Expedition will pay Fosun Pharmaceutical Industry as much as USD120 million in phased non-refundable down payments and up to USD525 million in milestone payments after the drug launches based on net sales and performance.

The Delaware-based firm company will also pay franchise fees at percentages agreed by both parties based on XH-S004 annual net sales in the licensed markets.

The potential indications of XH-S004, a small-molecule oral dipeptidyl peptidase 1 inhibitor, include non-cystic fibrosis bronchiectasis and chronic obstructive pulmonary disease, Fosun Pharma said, adding that there is no other drug with the same treatment mechanism approved worldwide.

XH-S004 is in the Phase II clinical trial for non-CF bronchiectasis and Phase Ib clinical trial for COPD in the Chinese mainland. Fosun Pharma has invested CNY72 million (USD10 million) in its research and development as of the end of last month, it said.

Editor: Martin Kadiev