Novartis has signed a licensing agreement with Chinese biotech Abogen Biosciences to develop an mRNA-encoded therapy for autoimmune diseases, in a deal worth up to $7.8 billion.
Abogen will receive $575 million upfront and could receive up to $7.2 billion more if the treatment meets development, regulatory and commercial milestones. Novartis has secured global rights to the therapy, known as ABO2203, and exclusive options to license further programmes based on Abogen’s RNA platform.
The agreement, announced on Friday, gives Novartis access to an experimental treatment aimed at B-cell-mediated autoimmune diseases, including lupus and rheumatoid arthritis. ABO2203 uses messenger RNA, or mRNA, to direct a patient’s cells to make a molecule that destroys disease-causing B cells.
Abogen says ABO2203 is the first mRNA-encoded T-cell engager to enter clinical evaluation for autoimmune diseases. The arrangement puts the Chinese company’s technology at the centre of a major development programme for a global pharmaceutical group.
The deal follows a difficult period for Novartis. Two late-stage clinical failures became known in September and cost the company roughly $30 billion in market capitalisation. At least one major shareholder subsequently pressed for tighter board-level review of future acquisitions.
Novartis shares fell last month by their largest amount since 1987 after several clinical trial setbacks. Its stock slipped 0.5% during Friday’s European session following the Abogen announcement.
For Novartis, the agreement provides a route into a treatment approach that targets disease-causing B cells through mRNA technology. The company is committing a relatively modest upfront payment while leaving most of the potential $7.8 billion price dependent on the therapy’s progress through development, regulatory review and commercial milestones.
Fiona Marshall is president of biomedical research at Novartis. Bo Ying is chief executive officer of Abogen.
The transaction also adds to a wider flow of licensing agreements between global pharmaceutical companies and Chinese biotechnology groups. ING has estimated that China will account for about a third of all new molecules in pharma companies’ pipelines globally in 2026, up from 4% in 2014.
ING expects the value of Chinese biotech outlicensing deals to surpass $250 billion in 2026. Such arrangements allow larger drugmakers to obtain rights to programmes and technologies developed by Chinese companies.
Novo Nordisk announced earlier this week an exclusive licensing agreement with Hengrui Pharma for an early-stage, once-weekly GLP-1/GIP pill for as much as $2.6 billion. GSK said in mid-September that it was acquiring a blood cancer medicine from Chinese Chimagen Biosciences for up to $750 million.
AstraZeneca has committed to investing $15 billion in China through 2030. The Novartis agreement places Abogen alongside other Chinese companies whose drug candidates and platforms are becoming part of global pharmaceutical groups’ development pipelines.
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