Pfizer partner CStone explores sale as US path blocked, Chinese competition heats up: Bloomberg

A Pfizer cancer drug partner in China is considering a sale as the biotech’s commercial path in the U.S. looks uncertain and competition in its home country intensifies.

CStone Pharmaceuticals is exploring strategic options including a sale, Bloomberg reports, citing people familiar with the company.

The news comes just one month after the company’s Pfizer-partnered PD-L1 inhibitor Cejemly (sugemalimab) got an expanded approval in China for unresectable stage 3 non-small cell lung cancer (NSCLC) that hasn’t progressed following chemoradiotherapy. The drug earned its initial go-ahead late December for use alongside chemotherapy in newly diagnosed metastatic NSCLC.

Pfizer had signed on to help develop and lead marketing of Cejemly in China back in 2020. The deal saw the drugmaker make a $200 million equity investment to take a 9.9% stake in CStone. The pair also set up a strategic partnership to bring additional oncology assets to the Chinese market.

Shortly after that China agreement, CStone transferred ex-China rights to Cejemly and its PD-1 inhibitor nofazinlimab, or CS1003, to U.S. firm EQRx.

Besides those PD-1/L1 deals, CStone also serves as Blueprint Medicines’ partner in China for RET inhibitor Gavreto and KIT inhibitor Ayvakit as well as the Chinese seller of Servier’s IDH inhibitor Tibsovo.

Now, CStone has tapped Goldman Sachs to help gauge buyer interest, according to Bloomberg's report. Besides a full-on takeover, a sale of a controlling stake is also on the table, and the company could eventually decide against any deal, the people reportedly said.

CStone’s stock price has taken a beating lately, having slid about 70% in the past 12 months. An overall biotech bear market aside, the FDA’s recent clampdown on cancer drugs with China-only data also played a part.

In March, the FDA snubbed Eli Lilly and Innovent Biologics’ Tyvyt (sintilimab) in newly diagnosed NSCLC because the application was based on China-only pivotal data comparing the drug with an outdated therapy. Before that, Chinese PD-1/L1 developers had counted on using China-only trials to pursue U.S. approvals based on some comments FDA oncology chief Richard Pazdur, M.D., made during a 2019 event.

The FDA’s tough stance against single-country data and repetitive PD-1/L1 studies from China affects CStone as well. The phase 3 GEMSTONE-301 and GEMSTONE-302 trials that got Cejemly its current two China approvals are both conducted solely in China.

Meanwhile, in China, the PD-1/L1 competition is getting bloody as companies offer huge discounts trying to secure market share through national reimbursement. In the first quarter, Lilly reported a 22% Tyvyt sales decline to $85.5 million.

As of today, Chinese authorities have cleared altogether 14 PD-1/L1 drugs, including the world’s first under-the-skin PD-L1 inhibitor, envafolimab, and, most recently, cadonilimab, the first PD-1/CTLA-4 bispecific approved anywhere.

CStone represents the latest prominent Chinese biotech reportedly exploring a sale. In April, Bloomberg reported that Nasdaq-listed I-Mab, which has a potentially $2 billion CD47 deal with AbbVie, was also eyeing a possible sale amid takeover interest from large global drugmakers.