Dive Brief:
- Zenas BioPharma is beefing up its pipeline with three experimental autoimmune medicines from China’s InnoCare Pharma, including a treatment for multiple sclerosis that has already begun Phase 3 testing.
- InnoCare will receive as much as $100 million in upfront and near-term cash payments, including for goals expected to be achieved in 2026, Zenas said Wednesday. The Chinese company may also receive as many as 7 million shares of Zenas common stock. All told, the deal could be worth more than $2 billion for InnoCare, which is also eligible for royalties.
- Separately, Zenas said it’s entered into an agreement for a private placement of stock worth about $120 million. The financing will ensure that Zenas has enough cash to operate into the fourth quarter of 2026 and potentially early 2027, assuming a $75 million milestone payment comes due from Royalty Pharma, the company said.
Dive Insight:
The Zenas deal is part of a growing trend of U.S. pharmaceutical companies looking for innovation from China. Biotechnology startups in the country are benefiting from lower costs and more regulatory flexibility, allowing them to move faster than their U.S. rivals to develop new medicines.
The growing pipeline of drugs from China has sparked concern among U.S. biotech companies and their investors, with a bipartisan commission established by Congress warning that the U.S. may lose its edge. The perceived threat prompted the White House to explore ways to clamp down on the practice of licensing Chinese drugs, the New York Times reported.
Even some of the top pharmaceutical executives who have benefited from Chinese drug purchases – including Pfizer CEO Albert Bourla – are sounding an alarm and asking the government to help prop up the U.S. biotech industry. But if anything, the pace of licensing has picked up, with four deals announced last month alone, according to data compiled by BioPharma Dive.
With its transaction, Zenas is acquiring orelabrutinib, a drug in a class known as BTK inhibitors that have attracted a fair amount of attention in the industry, with mixed results. Orelabrutinib was previously licensed to Biogen in 2021, but returned to InnoCare two years later. A global Phase 3 study of orelabrutinib in primary progressive multiple sclerosis has since started, and Zenas plans to kick off a second Phase 3 trial next year in patients with the secondary progressive form of the disease.
The agreement with InnoCare will also give Zenas two other autoimmune treatment candidates that are much earlier in development. Both are oral drugs, with one targeting IL-17 cytokines and another aimed at the TYK2 protein. Zenas said it expects both medicines to enter Phase 1 testing next year.
