Gilead’s Kite Pharma is separating from its cell therapy joint venture with Fosun Pharma in China, handing Fosun the reins for its CAR-T therapy Yescarta in the region.
Other foreign drugmakers have made recent China divestitures, including UCB and CSL Behring. Kite’s decision in particular reflects the challenges of securing reimbursement for more complex medicines in the country.
Fosun is spending $27 million on Kite’s 50% share in the venture, known as Fosun Kite Biotechnology, according to a Sept. 13 securities filing in Chinese. Fosun will get the China rights to Yescarta and a related treatment called Tecartus.
Kite will still be responsible for providing the viral vectors needed to continue making the two cell therapies. The Gilead subsidiary will also get tiered royalties on product sales ranging from 7% to 13%.
The two drugmakers first inked their partnership in 2017, with Fosun paying Kite $40 million upfront and offering $35 million more in milestones for the China rights to Yescarta. The B cell lymphoma treatment was the first CAR-T to secure China approval in 2021.
But since then, access and reimbursement for the CAR-T therapy have seen serious hurdles. Last year, Yescarta made sales of just 242 million Chinese yuan ($34 million), according to the filing. In the US, Yescarta made $186 million in the second quarter of this year.
The treatment’s 1.2 million yuan ($170,000) price tag in China means it’s not affordable for many Chinese patients and likely ineligible for coverage under China’s state insurance program. In the US, Gilead initially set its list price at $373,000, but it has since increased to around $424,000.
Fosun said it has tried to tap into various commercial coverage opportunities, including a scheme in Shanghai. Under that policy, insured patients can get a 100% claim payment for CAR-T therapy with a maximum coverage of 500,000 yuan.
Several other companies besides Kite have also left China’s commercial activities to local drugmakers. Last month, CSL Behring sold a China subsidiary to Beijing Tiantan Biological Products for $185 million, according to a securities filing in Chinese. Just a few days before that, Belgium-based UCB sold a portfolio of its “mature products” to CBC Group and Abu Dhabi sovereign wealth fund Mubadala Investment Company for $680 million.
Editor’s note: This article was updated to add further context.