Blue Whale Finance Tu Jun
On May 16, Hengrui Pharmaceutical (SH600276) announced that it will license the company's exclusive rights to develop, produce and commercialize HRS-7535, HRS9531, and HRS-4729 GLP-1 innovative drugs with independent intellectual property rights on a global scale other than Greater China to Hercules of the United States for a fee.
It is worth noting that Hercules of the United States is a new company established in Delaware in May 2024. The famous investment institution Bain Capital Life Sciences Fund jointly invested 400 million US dollars with Atlas Ventures, RTW Capital, and Lyra Capital.
According to the terms of the agreement, Hercules of the United States will pay Hengrui Pharmaceutical a total of 110 million US dollars in down payment and recent milestone payments, no more than 200 million US dollars in clinical development and supervision milestone payments, no more than 5.725 billion US dollars in cumulative sales, and sales commissions that reach a low single-digit to low double-digit ratio of actual annual net sales. As part of the consideration for the foreign licensing deal, Hengrui Pharmaceutical will acquire 19.9% of the shares of Hercules in the United States.
In other words, this is a super deal with a total transaction value of over $6 billion.
Some industry insiders pointed out that this kind of external licensing has created a new model. It is similar to Hengrui Pharmaceutical's three GLP-1 pipeline overseas businesses by cooperating with several investment institutions and companies leaving the pipeline and paying capital.
According to public information, shareholders of Hercules in the US include: Bain Capital Life Sciences Fund (investing US$225 million, accounting for 39.4% of the shares), RTW Capital (investing US$110 million, accounting for 19.3% of the shares), Atlas Ventures (investing US$50 million, accounting for 8.8% of the shares), and Sino Investments (investing US$15 million, accounting for 2.6% of the shares). The above four investors invested a total of 400 million US dollars and held 70.1% of the shares of Hercules in the United States.
Jiang Ningjun, Director and Chief Strategy Officer of Hengrui Pharmaceutical, said, “This cooperation is another milestone in Hengrui Pharmaceutical's continued deepening internationalization. It also represents the international market's high recognition of Hengrui Pharmaceutical's innovative quality. Cooperation with top investment funds such as Bain Capital, Atlas Ventures, RTW Capital, and Lyra Capital is a new model exploration for Hengrui Pharmaceutical.”
In terms of products involved, HRS-7535 tablets are a novel oral small molecule glucagon-like peptide-1 receptor (GLP-1R) agonist independently developed by Hengrui Pharmaceutical to treat type 2 diabetes (T2DM) and lose weight. There are no oral small molecule GLP-1R agonists on the market worldwide.
HRS9531 injection is a dual agonist targeting gastric inhibitory peptide receptor (GIPR) and glucagon-like peptide-1 receptor (GLP-1R) independently developed by Hengrui Pharmaceutical.
HRS-4729 injection is a next-generation intestinal insulin product independently developed by Hengrui Pharmaceutical. By activating multiple targets, it can protect the pancreas while increasing insulin secretion and controlling blood sugar. It is expected to achieve better weight loss effects and treatment of diseases related to metabolic dysfunction. It is currently in the pre-clinical development stage.
Hengrui's overseas strategy and style of play seem to be evolving.