Swiss pharmaceutical giant Novartis has signed a licensing and option deal worth up to $7.8 billion with Chinese biotech company Abogen Biosciences to develop mRNA-based treatments for autoimmune diseases. According to reports from Reuters, under the agreement, Novartis gains exclusive worldwide rights to Abogen's experimental drug ABO2203 and also has the option to license additional therapies developed using the Chinese company's RNA delivery platform. The deal comes as global drugmakers increasingly turn to China for pipeline assets as the industry prepares for major patent expirations in the early 2030s.
As reported by Reuters, Abogen will receive $575 million upfront in cash, along with the potential to earn up to $7.2 billion in milestone payments linked to clinical development, regulatory approvals and commercial milestones, as well as tiered royalties on future global sales. The transaction remains subject to customary closing conditions and regulatory approvals before it can be completed. The deal follows recent clinical trial setbacks at Novartis, with the company's shares falling by the most since 1987 after several setbacks, adding to investor concerns over its ability to replace revenue as key drug patents approach expiry.
According to Reuters, ABO2203 represents an application of mRNA technology beyond its better-known use in vaccines. The experimental therapy is being developed for autoimmune diseases including lupus and rheumatoid arthritis, with the aim of using mRNA to help the body's cells produce molecules that direct T cells to identify and eliminate disease-causing B cells. Unlike existing B-cell therapies that rely on engineered monoclonal antibodies or personalised CAR-T cell treatments, Abogen is developing an in vivo approach, meaning the treatment is designed to work inside the patient's body rather than requiring cells to be extracted and modified outside it.
The agreement reflects China's rising importance in global drug discovery, with ING projecting Chinese outlicensing deals to exceed $250 billion in 2024 and one-third of global pipeline molecules by 2026. As reported by ING, China will account for about a third of all new molecules in pharma pipelines globally in 2026, up from 4% in 2014. Large drugmakers are increasingly folding China-originated treatments into worldwide development programs, with AstraZeneca also announcing a partnership with Summit Therapeutics to test oncology drugs. The broader shift reflects China's growing role in global biotech innovation as overseas demand for Chinese assets increases.
