ReNeuron soars after partnering with Chinese pharma giant

ReNeuron's shares soared on Tuesday after it signed an exclusive licence agreement with Shanghai Fosun Pharmaceutical Industrial Development (SFPID) for the development, manufacture and commercialisation of ReNeuron's cell therapy programmes in China.

Under the terms of the agreement, SFPID will fully fund the development of ReNeuron's CTX and hRPC cell therapy programmes in China, including clinical development and subsequent commercialisation activities.

ReNeuron will receive £6.0m on entering into the agreement, as well as up to £6.0m in near-term operational milestones and up to £8.0m in future regulatory milestone payments.

In addition, post-launch profit threshold milestone payments are due at a rate of 5% of annual net profits derived from the licensed products in the year the relevant net profit milestones are exceeded, leading to total estimated milestone payments of £80.0m provided all milestones and profit thresholds are successfully met.

ReNeuron will also receive tiered royalties at rates between 12% and 14% on sales of the licensed products in the Chinese market.

Olav Hellebø, chief executive of ReNeuron, said: "We are delighted to partner our cell therapy programmes with Fosun Pharma, one of China's largest and most distinguished healthcare companies. This agreement furthers our core strategy to build shareholder value through the clinical development and commercialisation of our cell therapy programmes. China represents a significant market opportunity for our products."

Fosun Pharma has also been granted rights to manufacture the licensed products in China, though the AIM traded company will be responsible for supplying CTX and hRPC cells to Fosun until technical transfer activities have been completed.

SFPID is a subsidiary of Shanghai Fosun Pharmaceutical Group, a leading healthcare group in China with extensive healthcare business interests worldwide that is listed on both the Shanghai Stock Exchange and the Hong Kong Stock Exchange.

Yifang Wu, president & chief executive of Fosun, said: "We are very honored to collaborate with ReNeuron, one of the leading cell-based therapeutics companies worldwide at clinical stage. The licensed products and unique stem cell platforms will bring a lot of strategic synergies with our current business, addressing huge unmet needs in the Chinese market. Regenerative Medicine is one of the most advanced areas with various cutting-edge technologies."

ReNeuron's shares were up 28.65% at 220.00p at 1649 BST.