The deal allows Celgene to accelerate its immuno-oncology portfolio, while BeiGene is set to acquire Celgene's commercial operations in China. 

In a significant deal with Chinese biotech BeiGene Ltd., Celgene Corp has gained exclusive rights to the latter’s PD-1 inhibitor BGB-A317 for non-hematological indications in countries outside of Asia plus Japan. The deal is important to Celgene because it does not yet have its own PD-1 inhibitor candidate. With the deal, the company will have access to a PD-1 inhibitor for testing in combination treatments with a range of candidates targeting solid tumors.

As an exchange for the rights to BGB-A317, Celgene will pay BeiGene an upfront payment of $263 million in licensing fees and up to $980 million in additional milestone payments, as well as royalties. Celgene is also investing $150 million in the company, which will equal a 5.9% equity stake. Additionally, BeiGene acquired Celgene’s commercial production operations in China along with the exclusive rights in China to Celgene’s drugs Abraxane (nab-paclitaxel), Vidaza (azacitidine) and Revlind (lendilomide) and candidate CC-122, a pleiotropic pathway modifier in Phase I/II testing for various cancer indications for the next 10 years.

BGB-A317 is a monoclonal antibody that is designed to eliminate Fc gamma receptor I (FCGR1; CD64) binding. According to BeiGene’s Chief Financial and Strategy Officer Howard Liang, it has unique engineering that differentiates it from other PD-1 inhibitors; preclinical data suggests that it does not attract immunosuppressive cells that can reduce the activity of cytotoxic T-cells. The drug has been initially tested in more than 500 patients and found to exhibit anti-tumor activity in “a range of solid tumor types” and to be well tolerated overall.

Currently, two Chinese clinical trials with BGB-A317 are underway to evaluate its effectiveness against urothelial cancer and classical Hodgkin's lymphoma. Celgene and BeiGene will begin global trials in solid tumors in 2018. Celgene has agreed to spend at least $100 million on a total of eight registrational basket studies of BGB-A317.

Celgene’s Chinese operations earned sales totaling $65 million in 2016, according to Liang. In China, Vidaza recently received approval for the treatment of myelodysplastic syndrome (MDS) and has yet to be launched. BeiGene is in negotiations with China’s Ministry of Human Resources and Social Security (MoHRSS) on the pricing of Revlimid so that it can be included on the updated national reimbursement drug list (NRDL). Celgene, meanwhile, has retained activities in China to support its clinical development and regulatory affairs efforts there.