Prime Highlights:
Merck signs a $2 billion licensing agreement with Jiangsu Hengrui Pharmaceuticals for the experimental heart disease drug, HRS-5346.
The deal grants Merck exclusive global rights (excluding Greater China) to develop, manufacture, and sell HRS-5346, which is currently in mid-stage trials in China.
Key Background:
Merck (MRK.N) has entered into a licensing agreement with Jiangsu Hengrui Pharmaceuticals (600276.SS) for an experimental heart disease drug, marking the latest in a series of strategic deals between U.S. drugmakers and Chinese biopharmaceutical firms. The agreement, valued at up to $2 billion, grants Merck exclusive global rights to develop, manufacture, and sell HRS-5346, an oral drug currently undergoing mid-stage trials in China.
The drug belongs to a class of treatments designed to prevent the formation of cholesterol, fats, and proteins in the blood, thereby reducing the risk of heart attack, stroke, and other cardiovascular diseases. Jiangsu Hengrui will receive an upfront payment of $200 million, with the potential for an additional $1.77 billion in milestone payments contingent on the drug’s development, regulatory approval, and commercial success. Additionally, the company will receive royalties on net sales if the drug is approved.
This move continues a trend where large pharmaceutical companies, including Merck and Eli Lilly (LLY.N), have turned to Chinese biotech firms to access promising drugs at lower costs. For instance, Merck had previously signed a similar deal worth up to $2 billion for Hansoh Pharma’s experimental obesity treatment and purchased rights to a cancer drug from China’s LaNova in a deal valued at up to $3.3 billion.
The Hengrui agreement reflects Merck’s strategy to expand its cardiovascular drug portfolio and enhance its global market presence. The deal is expected to close by the second quarter of 2025, further solidifying the increasing collaboration between Western pharmaceutical giants and Chinese biopharmaceutical innovators.
