SHANGHAI – Zai Lab Ltd., located in the well-known Zhangjiang Hi-tech Park, has inked a deal with UCB SA, of Brussels, licensing global rights to its first large molecule asset, set to go into phase I trials in 2016.

The agreement marks another milestone for Zai, a local biotech on the move.

"This is a very interesting target for us – our first large molecule; it has potential for both oncology and autoimmune diseases," Samantha Du, CEO of Zai told BioWorld Today. "The data package was very compelling; our global advisors were very pleased we can go for this target."

Du added that it was a competitive process, though specific details of the deal terms remain undisclosed. UCB will receive from Zai an up-front payment with milestones hinged upon future clinical development, regulatory activities and commercialization. Zai has exclusive rights and will be responsible for the global development of the candidate.

"We are excited to partner with UCB, a leader in developing drugs to treat immunological diseases," Du said. "We wish to accelerate the development of new treatments that can potentially cure or slow the progression of devastating autoimmune diseases such as graft-vs.-host disease and inflammatory bowel disease.

The deal fits well with Zai's ambitious in-licensing strategy. The firm already has four global assets and one with China rights. And its impressive network and reputation has enabled it to nab candidates from big pharma players such as Sanofi SA, of Paris, for chronic obstructive pulmonary disorder, and a multikinase inhibitor for non-small-cell lung cancer as well Brivanib for liver disease from Bristol-Myers Squibb Co. (See BioWorld Today, March 25, 2014, and Aug. 24, 2015.)

Zai was established a year ago and received $30 million in venture capital not long after. (See BioWorld Today, Sept. 2, 2014.)

As Zai's founder, Du in particular has earned the confidence of big pharma players willing to release their candidates, in part given her 10-year tenure as CEO of Chinese biotech pioneer Hutchison Medipharma as well as serving as a venture partner at Sequoia Capital.

UCB, on the other hand, has not recently announced any deals with China biotechs, so the Zai agreement marks an interesting departure. UCB is known for Cimzia (certolizumab pegol) for Crohn's disease, rheumatoid arthritis and psoriatic arthritis; Vimpat (lacosamide) for epilepsy; and Neupro (rotigotine transdermal patch) for Parkinson's disease and restless leg syndrome.

UCB does not break down numbers for China, but its emerging market segment – covering Brazil, India, Russia, China (also known as the BRIC nations), Mexico and Turkey – accounts for 10 percent of net sales, or $192 million in revenues in 2014. The majority, or 80 percent of UCB revenues, is almost evenly split between the U.S. and Europe.

The deal with Zai offers UCB a chance to work with a Chinese biotech and navigate the local regulatory system, but it also risks the local company's ability to navigate global clinical trials.

"Through a long-term interaction between us and UCB, they see us as a partner of choice," said Du. "We believe together we can bring this product to global approval but also together they can learn more about China's approval process."

According to Du, in those indications, China is going to be the number one market globally. Du said the candidate has the potential to be first in class

Although China's authorities have made comments that the clinical trial approval backlog would be cleared, Du said Zai is considering where to take the trials to obtain the global data required.

Given the still considerable wait times on the mainland, it is unlikely the studies will be slated for China. Also, the indications sought for the candidate do not appear to require special considerations for ethnically Chinese patients, often a factor with regulators when recruiting patients.

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