Pfizer inks $1.25 billion deal with 3SBio for cancer drug

NEW YORK - Pfizer Inc. (NYSE:PFE), a pharmaceutical giant with $62.46 billion in revenue and a market capitalization of $130.76 billion, has secured an exclusive licensing agreement with Chinese biopharmaceutical firm 3SBio Inc. (01530.HK) for the development and commercialization of a novel cancer therapy, SSGJ-707, outside of China. This bispecific antibody, which targets PD-1 and VEGF, is currently being tested in China for various cancers including non-small cell lung cancer, metastatic colorectal cancer, and gynecological tumors. According to InvestingPro analysis, Pfizer maintains a GOOD financial health score, positioning it well for such strategic investments.

The deal, which excludes China but provides Pfizer with an option for commercialization rights within the country, involves an upfront payment of $1.25 billion to 3SBio. Additional milestone payments could reach up to $4.8 billion, alongside tiered double-digit royalties on future sales if the drug receives approval. With a strong dividend yield of 7.48% and a history of maintaining dividend payments for 55 consecutive years, Pfizer demonstrates robust financial stability for such significant investments. InvestingPro’s Fair Value analysis suggests the stock is currently undervalued, presenting a potential opportunity for investors interested in the company’s growth initiatives.

Pfizer’s commitment includes a $100 million equity investment in 3SBio, contingent on the closure of the transaction and a securities subscription agreement. The expected closure is set for the third quarter, pending regulatory and 3SBio shareholder approvals.

The agreement leverages Pfizer’s manufacturing capabilities, with plans to produce the drug substance in Sanford, North Carolina, and the drug product in McPherson, Kansas. Meanwhile, 3SBio is gearing up to initiate the first Phase 3 study in China in 2025.

Pfizer Oncology, known for its extensive portfolio and pipeline, aims to deliver transformative therapies for common cancers. This new agreement with 3SBio represents a significant expansion of Pfizer’s bispecific antibody and immuno-oncology offerings.

This strategic partnership is subject to various risks and uncertainties, including regulatory and shareholder approvals, integration of the asset, and the realization of expected benefits within the proposed timeframe. The companies have not disclosed further financial planning details or potential impacts on Pfizer’s stock price.

The information in this article is based on a press release statement from Pfizer Inc.

In other recent news, Pfizer Inc. reported its first-quarter 2025 financial results, revealing an adjusted diluted earnings per share (EPS) of $0.92, which surpassed analyst expectations of $0.68. However, the company’s revenue fell slightly short of forecasts, reaching $13.7 billion compared to the anticipated $14.09 billion. Meanwhile, JPMorgan maintained its Neutral rating on Pfizer with a $30 price target following the earnings report, highlighting that while sales were underwhelming, EPS exceeded expectations due to effective expense management.

Moody’s has assigned an A2 rating with a stable outlook to Pfizer Netherlands International Finance B.V., a subsidiary of Pfizer, reflecting the company’s strong cash flow and high margins. The rating considers Pfizer’s promising pipeline in oncology, immunology, and rare diseases, despite facing a potential patent cliff and industry-wide pricing challenges. Additionally, the Department of Health and Human Services is expected to announce changes to Covid-19 vaccination recommendations, potentially affecting vaccine producers like Pfizer.

Pfizer’s ongoing focus on oncology and vaccines was emphasized, with significant investments in research and development. The company is also progressing with its cost restructuring program, aiming for $1.2 billion in savings, as noted by analysts. Furthermore, President Donald Trump is anticipated to announce a drug pricing initiative that could impact Pfizer’s operations, as the government considers tying drug costs to international prices.

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