Shares in Hutchmed (China) Ltd jumped 6.5% after it announced a licensing deal with Takeda Pharmaceutical worth US$1.13bn.
With an upfront payment of US$400mln plus milestones, the agreement allows the Japanese group to develop Hutchmed’s cancer treatment, fruquintinib, outside China.
Fruquintinib is a highly selective and potent inhibitor of vascular endothelial growth factor receptors (VEGFR) -1, -2 and -3.
This oral treatment has the potential to be used across subtypes of metastatic colorectal cancer, regardless of biomarker status.
Positive results from the global phase III multi-regional clinical trial, FRESCO-2, were presented at the European Society for Medical Oncology Congress in September last year.
The trial met its primary endpoint of improving overall survival in patients with metastatic colorectal cancer and was well tolerated.
The plan is to move for marketing approval in the US, Europe and Japan later this year.
The partnership with Takeda will accelerate Hutchmed's global ambitions, providing the company with more bandwidth and an extended cash runway to advance other opportunities, the company told investors.
Chief executive Dr Weiguo Su stated that this transaction is consistent with the company's strategic shift to focus on innovative medicines in its pipeline that are most likely to generate near-term value.
The shares rose 18.54p to 305.4p, valuing the business at £2.6bn.