(Yicai) July 8 -- Sino Biopharmaceutical has struck a potentially USD1.9 billion licensing deal with AstraZeneca for the Chinese drugmaker’s experimental treatment for chronic obstructive pulmonary disease, an inflammatory lung condition that makes breathing difficult.

Sino Biopharm's unit Chia Tai Tianqing Pharmaceutical Group will grant AstraZeneca the rights to develop, produce, and commercialize TQC3721, an inhaled dual phosphodiesterase 3/4 inhibitor, its Beijing-based parent firm announced yesterday. The UK-Swedish drug giant will also be given a global exclusive license, including for China, for certain development programs related to TQC3721.

Sino Biopharm is entitled to a USD200 million upfront payment, up to USD1.7 billion in development, regulatory, and sales milestone payments, and tiered royalties based on annual net sales that could reach double-digit percentages. The deal remains subject to regulatory approval.

The company is one of China's most deeply entrenched in the respiratory disease field and has already achieved domestic substitution of budesonide suspension, generating annual sales of more than CNY500 million (USD73.6 million).

With AstraZeneca's experience in clinical development and Sino Biopharm's own innovation capabilities, it can accelerate the global development of TQC3721, the company pointed out.

AstraZeneca is the world's largest producer of respiratory and immune disease drugs by revenue, with over 15 respiratory products in its pipeline and four blockbuster products generating annual sales of more than USD1 billion each.

Sino Biopharm’s shares [HKG: 1177] closed unchanged at HKD4.82 (61 US cents) apiece in Hong Kong today, after earlier jumping by as much as 6.8 percent. The benchmark Hang Seng Index climbed 3 percent.

By achieving balanced inhibition of both PDE3 and PDE4 enzymes, TQC3721 is designed to provide synergistic bronchodilatory and anti-inflammatory effects. It has the potential to improve lung function, reduce the risk of acute exacerbations, and effectively lessen the long-term burden faced by patients with chronic respiratory illnesses.

A nebulized inhalation suspension of TQC3721 is undergoing Phase III clinical trials for COPD in China, while a dry inhalation powder has advanced into Phase II studies. The drug could become China's first domestically developed inhaled dual PDE3/4 inhibitor to win regulatory approval, Sino Biopharm noted.

Verona Pharma's Ensifentrine is the only drug on the global market similar to TQC3721. Merck, which is known as Merck Sharp & Dohme outside of the United States and Canada, agreed to acquire Verona for USD10 billion in July last year, drawing much attention to the therapeutic category. The deal is expected to complete this October.

Jiangsu Hengrui Pharmaceuticals and Haisco Pharmaceutical Group are two other Chinese players in the COPD category. The pair licensed their PDE3/4 innovative drugs to the UK's GSK and US' AirNexis Therapeutics, respectively, last July and this January.

Editor: Martin Kadiev