Business02 October, 20262 min read
Novartis Licenses Abogen mRNA Autoimmune Drug In Up To $7.8 Billion Deal
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Novartis pays $575 million upfront for worldwide rights to Abogen's ABO2203 mRNA autoimmune therapy. Total potential up to $7.8 billion with milestones; exclusive option for more assets.
Novartis pays for Abogen
Novartis signed a licensing deal with China-based Abogen Biosciences worth up to $7.8 billion, with Abogen describing it as an agreement for its lead asset, an early-stage experimental treatment for autoimmune disease. Novartis will pay $575 million upfront for the global rights to Abogen's messenger RNA therapy, and the company said it could owe an additional $7.2 billion in milestone payments if development, regulatory, and commercial milestones are met.
Abogen said the transaction centers on ABO2203, an experimental drug candidate designed to treat B-cell-mediated autoimmune diseases such as lupus and rheumatoid arthritis. Fiona Marshall, president of biomedical research at Novartis, said in a statement, "mRNA-encoded T-cell engagers represent an innovative approach that could complement existing therapeutic modalities by enabling in vivo production of these molecules."
Licensing seen as lower risk
Sidley partner Ruchun Ji told CNBC that licensing agreements can reduce risk for Big Pharma because licenses can be terminated if a drug disappoints or development priorities change. Ji said, "The speed of innovation, speed of clinical trials in China is really, really fast," attributing the development largely to regulatory reform by China's drug regulator NMPA.
The deal also arrived as Novartis faced investor scrutiny after it disclosed two late-stage clinical failures in September that wiped nearly $30 billion from its market value. Gillian Hollenstein, lead manager at Point Capital Navigator Fund, said, "This deal has a better risk profile, as they pay a smaller amount upfront to secure the rights."
Big Pharma China tie-ups
The Abogen deal sits within a broader pattern of Big Pharma tie-ups with Chinese biotechs, with Novo having earlier this week struck an exclusive license with Hengrui Pharma for an early-stage once-weekly GLP-1/GIP pill valued at up to $2.6 billion. GSK said in mid-September that it was acquiring a blood cancer medicine from China's Chimagen Biosciences for as much as $750 million, and AstraZeneca announced an oncology partnership with Summit Therapeutics to test its cancer therapy Datroway with Summit's ivonescimab.
ING forecast that China will account for about a third of all new molecules in pharma companies' pipelines globally in 2026, up from 4% in 2014, and the bank expected Chinese biotech outlicensing deal values to surpass $250 billion in 2026. AstraZeneca committed to investing $15 billion in China through 2030 to expand both manufacturing and research and development there, as multiple China-focused licensing agreements carried potential deal sizes exceeding $1 billion.