(Yicai) Sept. 29 -- Global pharmaceutical giant MSD will make a USD400 million upfront payment to China’s SciBrunch Therapeutics for the exclusive worldwide rights to SPR2015, an experimental cancer drug.

SciBrunch is also eligible for milestone payments tied to development, commercialization, and other activities across multiple indications for SPR2015, bringing the deal’s total potential value to as much as USD2.13 billion, the two companies announced late yesterday.

SPR2015, an oral KRAS G12D (ON) inhibitor, which is a type of rat sarcoma-targeted therapy, demonstrated significant anti-tumor activity across multiple in vivo cell-derived and patient-derived xenograft (CDX/PDX) models, according to preclinical data presented by Shanghai-based SciBrunch at this year’s meeting of the American Association of Cancer Research.

Multinational drug companies are increasingly willing to pay a premium for project certainty, Cui Cui, managing director and head of Asia healthcare research at Jefferies Group, told Yicai. Industry resources are consequently becoming concentrated at two ends of the spectrum: mature assets supported by robust Phase III data and highly innovative, early-stage programs, Cui said.

Both the number and value of licensing-out deals by Chinese innovative drugmakers have grown rapidly over the past three years, said Li Jia'an, a partner at venture capital firm LongRiver Investment, which joined in SciBrunch’s angel fundraiser last June and its pre-A financing round earlier this year. Multinational pharmaceutical firms are also sourcing an increasing share of their new drug assets from China, he said.

Li said the next challenge for Chinese innovative drugmakers is no longer simply discovering promising drug candidates, but successfully advancing them into globally competitive products.

Chinese biopharma companies should take a more proactive approach to building globally competitive, and potentially best-in-class, pipelines, ultimately integrating into the global drugs value chain and unlocking value through multiple channels, including licensing-out deals, Li added.

Editor: Tom Litting