(Yicai Global) Dec. 7 -- Shares in Akeso surged as much as 40 percent today after the Chinese biopharma firm said it has granted US drugmaker Summit Therapeutics exclusive rights to develop and commercialize a tumor-inhibiting drug in major markets outside China in a deal that could be worth as much as USD5 billion.

Akeso’s share price [HKG:9926] closed up 18.7 percent today at HKD37 (USD4.75). Earlier in the day it jumped to HKD43.60.

Summit will be given exclusive rights to develop and market Akeso’s bispecific antibody drug ivonescimab, which can be used to treat renal cell carcinoma, non-small cell lung cancer and hepatocellular carcinoma, in the US, Canada and Japan, Akeso said in a filing to the Hong Kong Stock Exchange yesterday, citing the deal that the two parties entered into the same day.

In return, Summit will make an upfront payment of USD500 million which will be followed by a number of other regulatory and commercial milestone payments, Akeso said. The Zhongshan, southern Guangdong province-based firm will also receive a low double-digit percentage of ivonescimab sales as royalties.

This could push the value of the deal to a maximum of USD5 billion, which would be the highest amount offered for a Chinese-developed drug in a single overseas licensing deal, eclipsing Beigene’s USD2.9 billion agreement with Swiss pharma giant Novartis in December last year to develop and market its experimental oncology drug tislelizumab outside China.

The deal provides an expedited and clear pathway to develop and commercialize ivonescimab globally, Akeso said. California-based Summit has a top-notch pharmaceutical development team and was able to push its first-in-class treatment ibrutinib to market quickly.

In addition, Akeso Chairwoman Xia Yu will be appointed to Summit’s board. Akeso has the right to co-brand the drug in Summit's licensed territories. And it reserves the right to license ivonescimab in regions other than the US, Canada and Japan.

It will be welcome news for investors. Although Akeso has raised over CNY3.8 billion (USD544.3 million) since April 2020 through its initial public offering followed by two new share issuances, the firm remains loss making due to the vast sums needed for new drug research and commercialization. It racked up losses of CNY630 million (USD90.2 million) in the first half on revenue of just CNY160 million.

And Akeso is now planning a secondary listing on the Shanghai Stock Exchange’s Nasdaq-style stock market, the company said in a separate filing yesterday.

Editor: Kim Taylor