Sanofi, JHL Biotech strike Rituxan biosimilar pact worth up to $236M

JHL Biotech will produce a biosimilar of Roche’s Rituxan at its plant Wuhan, China, which Sanofi intends to commercialize in the country.

Sanofi is jumping into the China biosimilars fray in a deal with Taiwan's JHL Biotech. Focused first on JHL's Rituxan biosim, the partnership could be worth up to $236 million in upfront and milestone payments.

The deal will put Sanofi's commercial prowess behind JHL's in-development Rituxan copycat and, potentially, other drug candidates from the company. And it will put JHL's new manufacturing plant in Wuhan, China, into action.

Sanofi will make an upfront payment of $21 million for exclusive Chinese rights to the proposed biosimilar of Roche’s Rituxan and options to some other JHL pipeline products. The French drugmaker also will invest $80 million in newly issued JHL shares at 90 New Taiwan dollars ($2.81) per share.

JHL will handle development, manufacturing and registration of the products, and Sanofi will take on commercialization in China. If all goes well, JHL could earn up to $236 million in milestone payments and royalties, the two said today.

“In our alliance with Sanofi, we are combining JHL's development and manufacturing expertise with Sanofi's strengths in commercialization,” JHL CEO and co-founder Racho Jordanov said in a statement. “Together, we will make high-quality medicines affordable to more patients in China."

JHL was founded by U.S. biotech veterans with the intent of tapping the Chinese biosimilars market, which is expected to grow significantly in coming years. It turned to GE to build one of its biologics plants, which are mass-produced at a facility in Germany and then shipped and assembled on site. GE had already installed one of the biomanufacturing facilities at JHL’s research center and manufacturing plant in Hsinchu, Taiwan.

Several other drugmakers are developing Rituxan biosimilars, including South Korea’s Celltrion, which in October announced its candidate had cleared a Phase 3 trial showing it works as well as the originator drug in rheumatoid arthritis. Celltrion and partner Hospira, now owned by Pfizer, have already had success in Europe with a biosimilar of Johnson & Johnson's arthritis fighter Remicade. The two are now launching the drug now in the U.S.