Merck on a Chinese roll!

In the fourth major deal with a Chinese biotech in just a few months (link), Merck (MSD) is paying Hengrui Pharma $200m upfront (and up to $1.77bn on milestones plus royalties on net sales if approved) for a clinical Lipoprotein(a) inhibitor, HRS-5346, currently in Phase 2 trials in China. Under the agreement, Hengrui Pharma grants Merck exclusive rights to develop, manufacture and commercialize HRS-5346 worldwide, excluding the Greater China region. Read Merck's statement: link

Lp(a) is one type of "bad cholesterol". Elevated Lp(a) is a documented risk factor for atherosclerotic cardiovascular disease, affecting approximately 1 in 5 adults globally. Lipoprotein(a) is produced in the liver and can accumulate in blood vessel walls, forming atherosclerotic plaques that limit blood flow and potentially cause heart attacks, strokes, and other cardiovascular diseases. Elevated Lp(a) is genetically determined and an independent risk factor for cardiovascular disease.

So big market, and again, a very typical price for this asset, not cheap, not expensive. The rapid emergence (or awareness by "Western" industry observers) of Chinese biotechs on the global deals stage is not, for now, pushing deal prices downward. And, frankly, if I were a Chinese biotech, why would I discount my high-quality research and development? The sheer, increasing number of biotechs with Chinese bases of operation might eventually put pressure on deal value. In the meantime, "Western" biotechs should continue to leverage the Chinese CRO ecosystem for cost and quality, and compete with their Chinese counterparts on patient value.

Luke Timmerman, Andrii Buvailo, Ph.D., Simon Birksø Larsen, Andrew Dunn

Scary image from link