We are advising GSK on the transaction

Davis Polk is advising GSK plc in connection with its agreements with Hengrui Pharma to develop up to 12 innovative medicines. The agreements include an exclusive worldwide license (excluding mainland China, Hong Kong, Macau and Taiwan) for HRS-9821, a potential best-in-class PDE3/4 inhibitor in clinical development for the treatment of chronic obstructive pulmonary disease (COPD) as an add-on maintenance treatment, irrespective of background therapy.

The agreements also include a pioneering scaled collaboration to generate up to 11 programs in addition to HRS-9821. Hengrui Pharma will lead the development of these programs up to completion of Phase I trials. GSK will have the exclusive option to further develop and commercialize each program worldwide (excluding mainland China, Hong Kong, Macau and Taiwan) at the end of Phase I or earlier at GSK’s election, as well as certain program substitution rights.

GSK will pay $500 million in upfront fees across the agreements, and each program under these agreements will have its own financial structure. The potential total value of future success-based development, regulatory and commercial milestone payments to Hengrui Pharma is approximately $12 billion if all programs are optioned and all milestones are achieved. In addition, Hengrui Pharma will be eligible to receive tiered royalties on GSK’s product net sales.

The license to HRS-9821 is subject to customary conditions, including applicable regulatory agency clearances under the Hart-Scott-Rodino Act.

GSK is a global biopharma company with a purpose to unite science, technology and talent to get ahead of disease together.

Hengrui Pharma is an innovative, global pharmaceutical company dedicated to the research, development and commercialization of high-quality medicines to address unmet clinical needs.

The Davis Polk IP and commercial transactions team includes partner David R. Bauer and counsel Samantha Lefland. The antitrust and competition team includes partners Howard Shelanski, Jesse Solomon and Matthew Yeowart, counsel Meytal McCoy and associate Andrew Bentivoglio. Partner Dominic Foulkes and associate Patrick O’Donovan are providing tax advice. Partner Paul D. Marquardt is providing regulatory advice. Members of the Davis Polk team are based in the New York, Washington DC and London offices.

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