4 hours ago - Business

Novartis signs $7.8 billion drug deal with Chinese startup

Dan Primack

Illustration of a pill, with one side featuring a Chinese flag and a much smaller side featuring an American flag — Illustration: Sarah Grillo/Axios

Novartis on Friday signed a drug licensing deal with China's Abogen Biosciences that could be worth up to $7.8 billion.

Why it matters: This is the latest example of a Western pharma giant partnering with a Chinese biotech — a trend that could presage China rivaling America as the world's top drugmaker.

If so, it could create both economic and national security concerns.

Zoom in: Novartis will pay $575 million upfront for an mRNA-encoded T-cell engager that it believes could be applied to autoimmune diseases. The agreement also includes up to $7.2 billion in earnouts.

Abogen has raised over $1 billion from firms like SoftBank, 5Y Capital, Mirae Asset Management, Lilly Asia Ventures, Loyal Valley Capital, Hillhouse, PICC Capital, Qiming Ventures, and SDIC Venture Capital.

The bottom line, per Axios' Caitlin Owens: "China has gotten really good at making new drugs, a huge government-designed shift from its history as a supplier of pharmaceutical ingredients and generics."

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Novartis signs $7.8 billion drug deal with Chinese startup

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