(Yicai) Feb. 25 -- Shares in Frontier Biotechnologies slumped today, erasing yesterday’s substantial rally, after the Chinese drugmaker said it has granted British pharmaceutical giant Glaxosmithkline exclusive global rights to develop and commercialize two of its small interfering RNA-based drug candidates in a deal worth over USD1 billion.

Frontier Biotech’s share price [SHA:688221] closed down 4 percent today at CNY23.69 (USD3.45), after sinking as low as 16.7 percent earlier in the day. Yesterday, the stock surged by the exchange-imposed limit of 20 percent and went on to close up 9.3 percent.

Frontier Biotech has granted GSK the exclusive rights to develop, produce and commercialize two of its siRNAs, which have a gene-silencing effect, allowing them to target and silence genes involved in causing certain diseases, the Nanjing-based firm said on Feb. 23.

Frontier Biotech will pocket an upfront payment of USD40 million, followed by a USD13 million milestone payment in the near future, and up to USD950 million as the drugs hit additional milestones, it said.

One of the two products has already applied to start clinical trials, while the other is still a pre-clinical candidate drug, Frontier Biotech said. The company will continue to handle the early development for both, but, moving forward, London-based GSK will take charge of global clinical trials, regulatory filings and commercialization.

Founded in 2013, Frontier Biotech has only one product on the market so far, namely Aikening or Albuvirtide for injection. This is a long-acting human immunodeficiency virus drug that was given the greenlight in China in 2018. The company has around 10 other products in the research stage, targeting cancer, cardiovascular diseases, hepatitis and other areas.

Since going public on the Shanghai Stock Exchange in 2020, Frontier Biotech has yet to turn a profit. The company is bracing for a net loss of between CNY255 million (USD37.1 million) and CNY290 million last year, a much bigger loss than last year’s CNY201 million, according to the firm’s earnings forecast released in January. However, revenue is expected to jump between 8 percent and 12 percent, reaching somewhere between CNY140 million and CNY145 million.

Editors: Dou Shicong, Kim Taylor