Quick Take: China’s Xiangxue Partners With U.S. Firm for Cancer Therapy

Chinese drugmaker Xiangxue Pharmaceutical Co. Ltd. said it will develop a cutting-edge cancer therapy with American biotech firm Athenex Inc.

The Shenzhen-listed company said (link in Chinese) that Xiangxue Life Sciences, a subsidiary of the company, will form a joint venture in Hong Kong with Athenex to develop and commercialize a cell-based cancer treatment for a global market.

The new company, Axis Therapeutics Ltd., will have a registered capital of more than $54 million. The Chinese side will own a 45% stake and grant the joint venture the therapy rights outside the Chinese mainland. The American firm will invest $30 million and have 55% ownership.

The key technology that the two sides are working on are T-cell receptor-engineered T cells (TCR-T), a cancer immunotherapy. It is a type of adoptive cell transfer (ACT) treatment that is considered the “fifth pillar” of cancer treatment, along with drugs, surgery, chemotherapy and radiation. The treatment collects and uses patients’ own immunity to treat their cancer.

The cancer therapy is still in pre-clinical trials and the joint project is pending regulatory approval. The joint venture will handle clinical trials in China, U.S., Japan and the European Union.

The new joint venture may seek an initial public offering in the future, Xiangxue said in the filing. The pair are long-term partners. In 2012, Athenex licensed Xiangxue the rights of a cancer drug in China.

Shares of Shenzhen-listed Xiangxue rose 7.5% to 7.61 yuan on Tuesday when the deal was announced, while Nasdaq-listed Athenex saw its shares grow 1.54% to $19.81.

Contact reporter Coco Feng (renkefeng@caixin.com)