Restructuring seems to be the name of the game for many large drugmakers these days, and Belgium-based UCB is no exception.
Early Monday, UCB revealed that it’s selling off its mature neurology and allergy business in mainland China to local healthcare asset manager CBC Group and Abu Dhabi-based investment firm Mubadala.
UCB is in line to receive $680 million from the transaction, which covers the seizure drugs Keppra and Vimpat, Neupro for Parkinson’s disease and restless leg syndrome, and the allergy meds Zyrtec and Xyzal.
UCB is also pawning off a manufacturing site in the city of Zhuhai in China’s Guangdong Province as part of the divestment deal, the company said in a release.
UCB says the deal will help more patients benefit from the company’s past innovations, noting that CBC and Mubadala are partnering to develop and operate a “new leading neurology” company at scale in China leveraging UCB’s drug portfolio and factory.
"In the short term, UCB is exploring the launch of novel medicines in immunology, neurology, and rare diseases in China," the company’s CEO, Jean-Christophe Tellier, said in a statement. “Building on our 28-year presence in the country, we are committed to driving patient outcomes through continued collaboration with local partners and fostering innovation.”
The deal is expected to close in the fourth quarter and will not weigh on UCB’s 2024 financial guidance, the company added.
UCB’s divestment follows a similar trend in which large pharmas have recently opted to enlist local partners to help commercialize their medicines in China.
Pfizer in November inked a deal with Keyuan Pharma, granting the Shanghai drugmaker exclusive Chinese rights to distribute and promote its pneumococcal vaccine Prevenar 13, which goes by the name Prevnar 13 in the United States.
Prior to that, GSK tapped Chongqing Zhifei Biological Products—the China marketer of Merck’s HPV short Gardasil—to distribute its shingles vaccine Shingrix in the country.
Biogen and Sanofi have also reworked parts of their China businesses in recent months.
Leveraging local partners in China has been on the upswing lately, partly because “there is increasing pricing and competitive pressure in the market, especially for mature products, leaving reduced [return on investment] for in-house commercial resources,” Justin Wang, head of L.E.K Consulting’s China practice, told Fierce Pharma last year.
Meanwhile, certain drugmakers—especially in the U.S.—are considering shying away from Chinese partners in the wake of the BIOSECURE Act, which aims to block certain Chinese biotech equipment and service providers from the U.S. market over national security concerns.
Among U.S.-based life sciences companies, confidence in working with Chinese companies has plunged, according to a L.E.K. survey released earlier this summer. The issue is less pronounced with companies outside the U.S., where L.E.K. reported a milder decrease in confidence levels.