Kite Pharma and Shanghai Fosun Pharmaceutical have announced a joint venture, Fosun Pharma Kite Biotechnology (company name subject to the approval of relevant registration authorities) to develop, manufacture and commercialize axicabtagene ciloleucel in China with the option to include additional products, including two T cell receptor (TCR) product candidates from Kite. Axicabtagene ciloleucel (KTE-C19), Kite’s lead product candidate, is an investigational chimeric antigen receptor (CAR) T-cell therapy under development for the treatment of B-cell lymphomas and leukemias.

The joint venture will be registered in Shanghai and owned equally between Kite Pharma, a pioneer in the field of engineered T-cell therapy for cancer, and Fosun Pharma, a leading healthcare group in China.

Under the terms of the agreement, Fosun Pharma will provide the RMB equivalent of $20 million in funding to support clinical development and manufacturing activities and Kite will provide certain technical transfer services to the joint venture. Each party will share in any profits from the joint venture with Kite Pharma receiving 40% and Fosun Pharma receiving 60 percent. Kite will also receive an upfront fee of $40 million from the joint venture, funded by Fosun Pharma, regulatory and commercial milestones totaling $35 million and mid-single digit sales royalties for axicabtagene ciloleucel (KTE-C19).

“We are committed to bring engineered T-cell therapy to patients in China who are suffering from cancer,” said Arie Belldegrun, M.D., FACS, chairman, president and chief executive officer of Kite. “This joint venture allows us to access a critically important market and meet a major objective of expanding our global reach. Fosun Pharma is an innovator and market-maker, which makes them an ideal partner to develop and commercialize axicabtagene ciloleucel in China. Together, we look forward to addressing significant unmet need in China.”

The joint venture will initially focus on axicabtagene ciloleucel, Kite’s lead CAR product candidate for the treatment of B-cell lymphomas and leukemias. The joint venture will also have the option to license additional product candidates including KITE-439, a TCR therapy directed against the human papillomavirus type 16 E7 oncoprotein and KITE-718, a TCR therapy directed against MAGE A3 and MAGE A6, antigens frequently found in solid tumors including bladder, esophageal, head and neck, lung and ovarian cancers. Opt-in and milestone payments for KITE-439 and KITE-718 could total $140 million plus profit sharing and mid-single digit sales royalties.

“Today’s announcement with a global industry leader in CAR-T and TCR therapy such as Kite, is an important and strategic step to build a long-term foundation for T cell therapy in China,” said Qiyu Chen, chairman of Fosun Pharma. "This partnership, which leverages each company’s respective strengths, will help us bring novel cancer treatments to patients in need.”

China is the second largest pharmaceutical market in the world after the US. With increasing incidence and mortality, cancer is the leading cause of death in China with over 4 million new cases per year. According to recent estimates, there are approximately 73,000 newly diagnosed cases of non-Hodgkin lymphoma (NHL) in China each year.

Kite announced in December 2016 that it has initiated the rolling submission to the FDA of the Biologics License Application (BLA) for KTE-C19 as a treatment for patients with refractory aggressive B-cell NHL.